Confused where funds go on withdraw

smithmark02
smithmark02 Member
edited October 6 in Savings Goals
Hello!  I have a savings goal and used the "withdraw for another purpose".  However, I don't know where those funds go in my spending plan to allocate to a category?  I thought maybe it would go to either my income or goals, but don't see it there.

My understanding is if for some reason my planned spending of utilities is higher than I planned, I could "withdraw" funds from a goal to apply to my utilities.  Is that correct?

Thanks!
Mark

Best Answers

  • Coach Natalie
    Coach Natalie Administrator, Moderator admin
    Answer ✓
    Hello @smithmark02,

    Thanks for posting your inquiry to the Community!

    It sounds like there may be some confusion on how Savings Goals work in Simplifi. Savings Goals are designed to be a mock scenario -- when u contribute to a Goal, the money will be deducted from the 'Available' balance of the account you contributed from, which lets you know how much money you'd have left in that account after the Goal money is set aside. 

    When it comes to Savings Goals in the Spending Plan, you can elect to have your 'monthly contribution' amount included in the Spending Plan, which just helps keep you accountable. Any additional contributions made in a month will also be deducted from your Spending Plan funds. When you withdraw from the Goal, withdrawing to spend for the Goal doesn't impact the Spending Plan in any way, as you've already saved that money to spend from. However, withdrawing for another purpose will remove those funds from the Spending Plan up to the standard 'monthly contribution' amount. 

    Although there are some tricks to using Savings Goals for items in the Spending Plan, such as using a Savings Goal to break down annual or bi-annual expenses to a monthly amount in the Spending Plan (please see here), I'm not personally coming up with a way to use a Savings Goal to cover overages in Planned Spending; instead, you would just adjust the amount of the Planned Spending expense to cover the extra amount.

    Please be sure to check out our Support Article here for more details on using Savings Goals in Simplifi, and our Support Article here for more details on using the Spending Plan. 

    I hope this helps, but please be sure to let us know if you have any further questions!

    -Coach Natalie
  • DannyB
    DannyB Superuser ✭✭✭✭
    Answer ✓
    @smithmark02,

    Hi Mark, this can be a little tricky until you get your head wrapped around it.  @Coach Natalie is way more qualified to work you through your auto repair scenario to help with understanding how Savings goals work.  I will take a stab at your question about overspending in your Spending Plan.

    ”My understanding is if for some reason my planned spending of utilities is higher than I planned, I could "withdraw" funds from a goal to apply to my utilities.  Is that correct?”

    That’s not how the Spending Plan works. The Spending Plan ONLY takes into account the current months income and expenses.  In the case of having a higher then planned for expense in your spending plan for utilities and thus being overspent, to cover this over spending and keep your spending plan within your overall limits you will need to increase the amount allocated for utilities for the current month.  There are two possible sources for the increase and both lead to a reduction elsewhere in your spending plan.  The first and easiest is to tap into your “Available” after all planned spending, if you have any and it is enough to cover the overage.  The second source for extra funds in the Spending plan are your other planned spending categories.  You can reduce the amount allocated for one or more of your other planned spending categories and reallocate that to your utilities for this month.

    The reason for this is, again, the way Simplifi works - The Simplifi Spending Plan is a month-to-month planning tool and works only with the current months income and expenses and that is the only money you have to work with in the spending plan.

    As far as using “Savings Goals” money to cover an overage elsewhere in this months spending plan would be to not make a contribution for this month to one or more of your savings goals, thus increasing your Available for the month and then using that “extra” available to increase your allocation for whatever category you have an overage.
    Danny 
    Simplifi user since 01/22
     Budget: a mathematical confirmation of your suspicions.” ~A.A. Latimer

Answers

  • smithmark02
    smithmark02 Member
    Apologies, I'm still confused.  Probably just not clicking for me   :)  I'll walk through a scenario.

    I have an emergency fund goal of $40,000 with a $200 monthly contribution.  One month we have some unexpected car repairs ($500) and need to tap into the emergency fund.  In the planned spending I would increase my auto service category by an additional $500.  When the car repair transaction comes in i'd set the category to auto service.  Now, my available funds would show -$500.  I would think if I went to my goal and choose withdraw for another purpose, and withdrew $500, it would set my available funds back to $0?

    If that isn't possible, how would you suggest I handle this situation?

    Thanks and love the community!!




  • Coach Natalie
    Coach Natalie Administrator, Moderator admin
    Thank you for providing a scenario, @smithmark02!

    I just have one question to fully understand the scenario -- are your monthly contributions of $200 being deducted in the Spending Plan? If so, since you've already saved that money and had it set aside by way of contributions, I'd suggest withdrawing to spend for the Goal instead of withdrawing for another purpose, and I'd also suggest ignoring the actual car repair transaction from the Spending Plan.

    The key is whether you've been contributing to the Savings Goal out of your Spending Plan funds already. If you have, you won't want to count the expense as well since you've already saved up for it.

    Let us know if this helps clear things up! :smile:

    -Coach Natalie
  • smithmark02
    smithmark02 Member
    Okay, I think this is all making sense now.  Thank you for your patience!  

    Now I need to put it in practice and see if I truly do understand it and if it works for us.

    Thanks again!
  • DannyB
    DannyB Superuser ✭✭✭✭
    Don’t hesitate to let the community know if you have more questions.
    Danny 
    Simplifi user since 01/22
     Budget: a mathematical confirmation of your suspicions.” ~A.A. Latimer
  • Flopbot
    Flopbot Superuser ✭✭✭✭✭
    This is a great discussion! Thanks for your detailed responses.  They help us all learn!
    DannyB said:
    @smithmark02,

    There are two possible sources for the increase and both lead to a reduction elsewhere in your spending plan.  The first and easiest is to tap into your “Available” after all planned spending, if you have any and it is enough to cover the overage.  The second source for extra funds in the Spending plan are your other planned spending categories.  You can reduce the amount allocated for one or more of your other planned spending categories and reallocate that to your utilities for this month.

    @DannyB... for the FIRST, just to confirm, you are referencing this box...correct?



    I understand that for the SECOND, you are saying that if there's unspent money, I could click "Release available for spending" for my "Diapers & Wipes" category in "Planned Spending" - for example - and put it towards an unexpected car repair.


    Chris
    Quicken Desktop user since 2014.
    Brand new to Simplifi in 2021.
  • DannyB
    DannyB Superuser ✭✭✭✭
    Hi Chris, @Flopbot

    If you wanted to use funds that are still available in the current month to pay for the unplanned for auto repair then, yes, I suppose this would be one way to make those funds available and then you could allocate those newly available funds to whatever category you will use to cover the expense.

    Since I anticipate auto maintenance and repairs as part of my cost of living, I have a savings goal for planned and unplanned auto maintenance and repairs including such things as new tires, battery replacement, oil changes, routine periodic maintenance and unplanned breakdowns.  That way, when it comes time to take care of these things the funds are already sitting in my savings account and in Simplifi in my Auto Savings Goal.  

    As far as unusually high spending in one of my planned spending categories I would move money around in spending plan either the way you describe above or by making adjustments in (an)other category/categories equal to what I need in the overspent category.  

    The ability to make these types of adjustment is indeed a feature request we have both contributed to!
    Danny 
    Simplifi user since 01/22
     Budget: a mathematical confirmation of your suspicions.” ~A.A. Latimer
  • For this part,

    "Since I anticipate auto maintenance and repairs as part of my cost of living, I have a savings goal for planned and unplanned auto maintenance and repairs including such things as new tires, battery replacement, oil changes, routine periodic maintenance and unplanned breakdowns.  That way, when it comes time to take care of these things the funds are already sitting in my savings account and in Simplifi in my Auto Savings Goal."  

    When you get to a month you need to use the funds in your goal, do you increase the auto maintenance category in Planned Spending and then decrease your auto savings goal by the same amount?
  • DannyB
    DannyB Superuser ✭✭✭✭
    edited September 6
    @smithmark02

    Hi Mark,

    No, there is no need to make a change in my spending plan for this expense.  I've already accounted for these expenses through my contributions to my Auto maintenance and repair savings goal in Simplifi.  When it comes time to to cover one of these expenses I make a withdraw to spend on goal from the appropriate savings goal and mark the transaction as Ignore in Spending plan since I'm using money accumulated from previous months of savings.

    Here is an example that may clarify this.  Let's say I have a deal with my auto repair shop where I agree to pay them $50 each month and they agree to fix my car whenever needed including routine preventative maintenance.  When my radiator springs a leak I take it to the shop and they repair it.  There is no charge for this repair since I've already been paying for it with my monthly payments.  The repair has no impact on that month's budget other than that month's already budgeted $50 payment.

    Does that help?
    Danny 
    Simplifi user since 01/22
     Budget: a mathematical confirmation of your suspicions.” ~A.A. Latimer
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