Bills vs. Subscriptions

System

This discussion was created from comments split from: We want your feedback on the Spending Plan!.

SRC54

OK, now I'll move on to Bills versus Subscriptions.  Like others, I have had a hard time deciding what to do with them.  Currently, I am placing as bills the things I pay myself and have to actively send a check or electronic payment, eg., Power, Phone, etc.  Subscriptions are those things that get paid automatically every month without my input, eg., Streaming services, tennis membership, insurance premiums.  I can look at a glance to make sure what's coming up and make sure I am not missing anything.

Of course, I could pay all utilities by automatic payment, but I remind myself of the guy in Canada who was dead for way over a year before anyone realized it as his pension was deposited automatically and all his bills were paid the same way.  No one seemed to notice he hadn't been seen!  Also, I like to make sure the amount seems plausible before I authorize the payment.

I almost think we need a third designation for taxes, since I don't really think of taxes as spending money as we HAVE to pay them.  Property Taxes and Vehicle Taxes are bills.  Payroll withholdings are subscriptions right now, but not happy with that.  But maybe the Spending Plan would not count that spending and only use Net Income minus expenses = Savings.  I still would want it to count contributions to retirement as savings as well as insurance payments as an expense.

I know I could just list net pay (amount after taxes), but I like to keep up with that as I can double-check at tax time.  Simply excluding the withholdings from Spending Plan doesn't work as then it looks like I saved a lot more than I did at the end of the month.  I could exclude the withholdings and that same amount of income, but that messes up tithing.  I guess I could use the income amount in Reports for tithing but I exclude non-taxable income from the spending plan that I include in Reports, eg., cash rewards, Retirement Fund dividends, mileage reimbursement, etc.

I could do income taxes as transfers or transfer them to an escrow account, which is actually what we do when we have them withheld, but seems needlessly complicated and would erroneously add to net worth until I file the taxes.  Besides, I already use an escrow account for my paycheck since Spending Plan's recurring transactions won't accept splits/transfers, etc.

This is probably not fixable from Simplifi's point of view.

DannyB

Wow @SRC54 !

What you describe above is quite energetic.  Up until December 2021, I used Quicken which had the kind of features that would cover a lot of what you describe with some work... I think. A big reason I switched to Simplifi was to get away from that depth of usage... and our personal finances have become less complex.

In the support article "What's the Difference Between 'Bills' and 'Subscriptions'?" @Coach Natalie makes this suggestion, "We recommend using 'Bill' for items such as your phone bill, utility bills, mortgage or rent payment, etc., whereas 'Subscription' is a great option for items that don't incur a late fee if not paid on time, such as streaming services, Amazon Prime, magazine or audiobook subscriptions, memberships, etc."

If I followed this suggestion, I would need to make changes for a number of expenses I now include under Bills.  I may do that at some point... or may not since it would not make any real difference overall in my spending plan and the same article points out how one classifies recurring monthly expenses is at the users discretion.

Even with tracking all our deductions in Quicken, I still depended on W-2s, 1099s of various kinds and annual giving reports from the organizations we contribute to.  The one category of expenses I need to track and isn't reported 1099s or end-of-year statements, is our annual housing costs.  I can still do this easily in Simplifi with either a watchlist based on a tag or based on certain categories that capture qualified housing costs.  I have to have receipts for these costs and they include utilities, repairs, maintenance and upkeep, furnishings, mortgage or rent payments and a few other allowables.

Starting in February, I expect to see the real benefit of Simplifi as our personal financial planning and tracking tool as our income will transition to a "just-in-time" mode from our current income producing mode.  With the ability to work with the next 12 months spending plan I am able to build our non-monthly fixed expensed right into the spending plan for the month an expense is due.  In those months we will plan to take an increase draw to cover these expenses rather than taking extra money each month and then putting it into savings until a non-monthly fixed expense is due.  I'll have to figure out how to set up those income variations in the spending plan but have no doubt I'll figure something out... or not  

While I'm setting this up, it might be a good time to realign my monthly recurring expenses between Bills and Subscriptions.  (I threw that last sentence in so that this post can remain on topic!)

SRC54

Hi @DannyB

When I used Quicken for Windows, it had all of that for taxes; Quicken Mac is not as full featured.  But that being said, I too prefer it simpler, which is why I prefer the Spending Plan over Quicken budgeting.

Budgeting is like losing weight.  I don't care so much for the details as seeing the results.  I like the gratification.

My main desire in a financial app like Simplifi is to see how much I am spending versus saving.   I don't want to use the Savings Goals.  I just like to see what is leftover. I have the discipline not to spend. The Savings Report in Simplifi does that over time but the visual representation hardly satisfies.  I would just like to see the Leftover at the end of the month be shown as Savings because that is what it is. And I would like to see a graph of how it is growing.  A Net Worth report would be nice but until we pull out of the stock market uncertainty, it doesn't work too well.  Way down.

Mainly I try to use the features to suit my needs.  As I said at the outset, one reason I didn't contribute to this topic sooner is that I AM an atypical user.  But really every user is different so the more we can tailor the program within its parameters, the better.

But I do agree, we don't want to go overboard and create a slow overburdened behemoth.  I don't care for Simplifi to do my taxes as Quicken/Windows almost used to do.  But I want a nice print out of the year to use as I file my taxes and to double check W-2s, 1099s, etc.  I want to see my savings grow in a nice satisfying graph.  

Thanks for commenting.

DannyB

@SRC54 if the title to this post means anything we are getting way off topic!

The "Left at end of month" has been one of my topics for discussion in this forum!  It would be nice to see that number carried over somewhere... perhaps as you suggest, a great place would be a report that track that number over time.  Such a report could show each months leftover amount and an accumulative graph over time.

SRC54

@DannyB

Good suggestion.  As to being afield (they moved it), the only place where Bills and Subscriptions are separated is the Spending Plan.  Otherwise, there just recurring and there is no other distinction.

SRC54

@DannyB @Coach Natalie

This past weekend, I redid all of my Spending Plans from the beginning going back to Nov 2021.

First, I got rid of my Manual Account from which I split taxes, salary and deposit, and redid the splits on the Bank deposit.  This took a while since the Transaction Modal is broken on the Web.  I used the mobile app instead.  I then linked them to my recurring paycheck each month.  

I decided I should put taxes as planned spending.  These are really withholdings but I call them taxes and set it.  It excludes Property Tax and Vehicle Tax since I have recurring for them.  I then evened up the amounts each month for what I actually spent since really taxes cannot be budgeted.  They are what they are.  But I now have it set so I can forget it.  I did the same with the Tithe because it is what it is too.  Kind of like a church tax.  So I don't do recurring for them; just planned spending.  I finally realized that Planned Spending is really budgeting.

Coming from so many different programs over the years, I admit I never fully understood the Spending Plan, its mission so to speak.

So we have income including my recurring income all in one spot.  Out of income come the recurring expenses like utilities, subscriptions, club dues, monthly stuff.

Then Planned Spending (things like essentials, taxes, tithe, gasoline, home supplies, spending money).

Other Spending are the especial stuff that don't happen every month such as durable goods, dr. visits, oil changes, presents.

So now I have conformed.  LOL.  Yeah, I still wish the recurring could show the splits, but I can live with the net cash amount being what is shown once you link it.  Before it is linked, it shows the Gross Pay Amount.

So I am happy.

DannyB

Wow, Steve, ( @SRC54 )!  That's amazing.  Thanks for the update.  Simplifi does have a unique setup and for me the Spending Plan is a great tool and has given me a more refreshing way to look at and manage my finances.  I haven't included any withholding which I used to track in Quicken.  Instead I have worked only with our net income after all deductions.  We do have some passive income and I have included quarterly tax payments in my Spending Plan to cover taxes on that income.  

However, now that we are both retired, we will now be working with what I'm calling "just in time" spending and I beleive Simplifi's Spending Plan is a near perfect tool to help us track and manage our retirement income and spending.  We'll see

Flopbot

@SRC54, welcome ‘again’ to Simplifi.

For the last few months, I’ve been really focusing on better understanding Savings Goals.  After months of banging my head against the proverbial wall, I just created two real world savings accounts in order to better align/conform my approach to Simplifi’s current design [limitations] with Savings Goals.  It’s surprising how much better the app seems to work now that I’ve finally done it.

Wishing you continued success with Simplifi @SRC54

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