Using a Savings Goal to Track "Left at end of month"

DannyB

This is a "just for fun" post.

I have wondered about what to do with the Spending Plan's "left at end of month" (laeom) amounts off and on pretty much form when I first started using QS. My most recent experiment with tracking these funds is via a Savings Goal.

Assumptions:

• There is a correlation between the Spending Plan and my actual real-world bank accounts.
• The amount shown as laeom is located in my main cash account (for me that is a checking account) if they exist at all outside of the Spending Plan.
• The laeom EXCLUDES all unspent Planned Spending rollover funds.
• I will by-and-large have a positive laeom amount month-to-month.

Process:

• Create a Savings Goal specifically for "capturing" surplus laeom funds.
  • In my case:
    • Name: LAEOM
    • Goal Amount: [a significant amount]
    • Amount already saved: $0.00 (or amount of previous month's laeom amount and "Saved in" will be my checking account.
    • Target goal date: Don't set
    • Start Date: current month
    • Include planned contribution in spending plan: No, don't set aside
• Finalize current month's Spending Plan
• After a few days into the new month go to LAEOM SG and make a contribution equal to the amount of previous month's laeom funds.
  • Example:
    • August '24 laeom = $500; Contribution to LAEOM SG = $500
    • September "24 laeom = $750; Contribution to LAEOM SG = $750
    • Checking Account in the accounts list shows:
      • Line 1: Checking Account = [$3000.00] (A fictional number for illustrative purposes.)
      • Line 2: Savings Goal = $1250.00
      • Line 3: Available = [$1750]

Observations:

• My Spending Plan is completely based on any given month's expected income and expected expenses, and, in my planning, I work to ensure that I have a positive "Available" that I monitor through the month. If I have a negative "Available" at any given point in the month, I will make necessary adjustments to my spending.
• My budget is stable and has been for the past decade or so.
• My budget has a built-in cushion to allow for spontaneity and some splurging (this is where a certain amount of the laeom comes from).
• The "Available" amount showing in my Account balance should be sufficient to cover current expected/anticipate/planned expenses even if those expenses are paid through a credit card. The reason for this is because 1.) the available is based on actual cash in my checking account; 2.) All charges to my credit card are already planned for in my Spending Plan for the month under recurring bills, subscriptions, savings contributions and money set aside for Planned Spending. If I have planned honestly and accurately, I will have sufficient funds in my cash account to cover my credit card balance when time comes to pay it. I believe this will remain true even if I make a purchase not included anywhere in my Spending Plan since that purchase will land in "Other Spending" and the amount of the purchase will be deducted from that month's Spending Plan "Available" reducing both the "Available" and once the month closes the laeom amounts.
• Moving funds in and out of the LAEOM SG WILL NOT affect the current months Spending Plan since these funds are no longer visible to the Spending Plan for any other month and contributions to this SG is "off the books" so to speak as far as the Spending Plan is concerned (if I understand how excluded SGs work). This is simply an attempt at accounting for the laeom moneys from previous Spending Plans as these unused funds seem to me to still exist somewhere, presumably in my primary cash account.
• I haven't given any thought to the impact of a negative laeom number would mean or how one would account for such a scenario. Off the top of my head, it seems that a negative laeom would lead to an increase in debt if it wasn't addressed by reducing expenses or dipping into a reserve/contingency/emergency fund.

That's it. This is my current means for accounting for "left at end of moth" surplus.

SRC54

Well, @DannyB it sounds good. I've fooled around with similar scenarios because I do the same thing as you. I try to end up with a surplus every month and don't set a Savings Goal or actually move money to a Savings Account. I figure the surplus is "accounted for" as it is in my main bank account, my savings accounts (interest), cash accounts and brokerage account.

I keep a pretty high balance in my checking account that receives bonus interest so I even reclassified that as a Savings Account so that in Reports the money leftover adds to Savings.

Thanks for sharing.

DannyB

@SRC54 I don't move the supposed laeom out of my checking account either… just let it ride as a cushion for the "in arears" payments to my CCs.