October Wrap-up: No Tricks, Mostly Treats (A Just for Fun Post)

DannyB

It's been a while since I did one of these wrap-ups, but since October ended with my "left at end of month" in the red(!) I thought it might be a good exercise to do a wrap-up review. This is a "just for fun post" so take it for what it's worth. 😎

As noted above, October was the first time in 34 months of using Quicken Simplifi (QS) that I ended the month "in the red." This is especially curious due to the extra income we have received via my spouses consulting gig since April this year, so, here we go…

Income after bills & savings

• Income: All our expected income was received with ONE EXCEPTION. Due to an oversite one of our income streams did not pay out until after the end of the month (we received the expected payment November 1. The payment we received today (11/1) includes October's and November's payment. I'm not going to try and figure out how to put the October portion back into October… wait, give me a minute, I'm going to try something… OK, never mind. What I ended up doing was deleting the "late" October reminder for this income event which of course reduced my overall expected/actual income for the month.
• Bills (non-discretionary fixed expenses): The only "surprise" here was a "double" payment to the water district. My water district pulled our last period usage payment on October 30 instead of the usual 2nd or 3rd of the month following the billing date (in this case, November). As a result, we made two payments to the water district in October instead of one and thus my fixed expense total was higher than the Spending Plan originally called for.
• Subscriptions (discretionary fixed expenses): No surprises here. All planned expenses were paid in amounts equal or close to what was expected.
• Transfers & Credit Card Payments: This category of "expense" comes in at a big fat zero. My credit card payments and transfers to savings accounts are excluded from my Spending Plan since they don't reflect any change in my net worth - all transfers are simply moving money around.
• Savings Goals: I have 3 SGs that I contribute to monthly and include in my Spending Plan. All contributions for the planned amount were completed. However, one of my SGs will typically receive contributions above the planned monthly amount as I move "excess" income into that SG for future use. Still, this is something I've been doing since my wife has been engaged in her consulting gig, so these extra contributions wouldn't seem to contribute to the October Spending Plan deficit.

At this point the missing income and the additional payment would seem to be at least part of the reason for the deficit for October, but I will press on.

Planned Spending

• Our Planned Spending came in about 30% higher than originally planned for.
• We ended up overspending in 4 out of our 10 planned spending categories definitely impacting the bottom line!

Other Spending

• I had "other spending" in four categories: Auto & Transportation, Charitable Giving, Housing and Uncategorized. There is some oddness to my Other spending due to several factors, but the final result is an additional out of plan spending of $177, again impacting the bottom line.

Observations

I did review all the actuals that make up October's income and expenses to make sure everything was accounted for correctly. That process did turn up some issues that needed correcting and adjustment.

When I combine our Income after bills and savings results with our Planned Spending results and factor in the out of plan Other spending, it seems obvious why we have a Spending Plan deficit (less income then planned for, and more expenses then planned for resulting in a deficit).

However, there are a couple of factors to consider.

First, I have a Savings Goal that is not included in my Spending Plan. That is, I don't have it set up so that contributions are deducted from my monthly income. I use the SG to "capture" left at end of month surplus in an attempt to show the accumulation of the left at end of month amounts as separate from funds that are designated to be spent for some planned expense.

Since there is no direct correlation between the numbers in the Spending Plan and the numbers reported in my account balances, this is at best a tricky proposition and must be treated with a bit of skepticism. But it does give me a general idea of what is immediately available and what is possible surplus in my main cash account balance. I've been using this idea for a few months now but what I did differently in October was to move some of my anticipated surplus into the savings goal before the month had ended thus reducing my Spending Plan available amount. Remember, SG contributions are virtual, and no funds were removed from my actual cash account - the designation of those funds changed but the funds still remain in my actual account.

Second, I made an additional contribution to one of my included SGs as I have been doing over the past several months. However, this contribution comes from a real-world savings account that this particular SG tracks exactly. That is, all the funds in the actual saving account are also contributed to and tracked in my Spending Plan and in QS with this one SG. In the real world, I make transfers from my main cash account into the savings account and when those transfers are completed, I make the contribution to the SG in QS. The transfers are excluded from the Spending Plan but the contributions to the SG are included in the Spending Plan. I suspect that the movement of these funds and the early contribution to my LAEOM SG are somehow complicit in my deficit.

Finally, the deficit in my Spending Plan for October is a virtual deficit only and not a real-world deficit. Still, the deficit is there and reminds me I need to pay attention to the plan if I'm going to be successful in my personal financial management dance. Also, I can account for the deficit in my Spending Plan based on the actuals for the month without having to hang too much if any responsibility on what I noted above. And finally, this is a reminder of the need to build into my finances and my planning some kind of contingency funds. I treat contingency funds separately from emergency funds though the contingency funds may be part of the emergency funds.

OK, that's it for this run down of my October Spending Plan outcomes. If you read this far, well, wow, thanks. If you have any thoughts about the whole process, let me know.

Onward to November!