Correcting a month where you over spent - permanently negative until new month?

GCA

New month and I had a pristine spending plan, however I found myself needing two whole house humidifiers and that was $550 outside of the spending plan.

Currently I have, let's say, $10,000 available in my savings account that's not been assigned to a goal.

Certainly I can cover the $550 with my savings, but alas I am "-$300" available in funds according to my spending plan which only permits $200/mo of "Other spending".

How do I make an adjustment for this month to get my available funds back to the $200 baseline?

These are the options that come to mind, but which is better?

1. Hide the 2x humidifier transaction of $550 so it does not affect spending plan, but remind myself to transfer $550 from savings to keep my checking account buffer in-tact
2. Transfer $550 from savings, but do not exclude the "Money in" to my checking account from the savings plan, therefore increasing my available funds for the month? Maybe?
3. Third option I hadn't considered?

Thanks!

ajbopp

I may not be fully understanding the ccomplexities here, but from I can tell, I don't see anything to correct.

You have a spending plan established,, and circumstances caused you to have to exceed the plan. It happens. Trying to hide that this happened (even though you can afford it) is part of your financial history. Over time you might see patterns emerging from overspending (time of year, appliance replacement occuring on a fairly regular basis, etc.) that will help you further refine your spending plan going forward.

In other words, use this situation as input to help your spennding plan, rather than looking for ways to workaround this to make it look pretty when you open the app.

DannyB

Hi @GCA

Ah the nuances of Simplifi…

I have a Savings Goal for home maintenance/repair that I contribute $xxx.xx to monthly exactly for this kind of situation. Since I have accounted for these types of expenses in my monthly spending plan through that SG contribution when I do spend the money I can exclude the purchase or outlay from this month's Spending Plan. This is not the same a hiding or ignoring the expense since I anticipated it and set money aside month-by-month to cover it.

In your case, you could either do as @ajbopp suggests and just live with an overspent month. Or you could in clear conscience exclude the expense and cover it with your savings you already have. Moving forward you may want to set up a SG for you home maintenance/repairs/replacement (any description that works for you) with a monthly contribution equal to what you current budget for home maintenance/repairs/replacement.

For me the SG is the best option for these types of non-monthly expenses in the current manifestation of Simplifi. You will of course need to do the "footwork" of moving the money from whatever account it is in to whatever account you spent the money out of, but that would be the case no matter what especially if you made the purchase on a credit card.

nanoviking

Enable budget rollover in Simplifi and then create emergency fund monthly goal which can be drawn from in these circumstances (and will otherwise accumulate in value until needed or transfered to another account )

GCA

I don’t see any articles from Googling on how to do budget rollovers?

GCA

https://community.simplifimoney.com/discussion/comment/18765#Comment_18765

What’s an example of how one would have a spending plan that can handle these sorts of one off transactions?

ajbopp

What I typically do is manually add a transaction on the Transactions page and link it to the downloaded transaction.

For instance, I know that this weekend I'm going to spend about $50 for gasoline that my SP doesn't account for. I added the transaction manually (I'll adjust it when I know specially what the amount turns out to be), and when the transaction is downloaded from my bank it will automatically link to the manual transaction I entered.

Depending on how I categorize it, the transaction will show up under Planned Spending or Other Spending.

GCA

https://community.simplifimoney.com/discussion/comment/18779#Comment_18779

I see. What I mean is currently it sounds like you’re saying Simplifi only accounts for planned spending. It also only seems to operate off of monthly income.

What about a month were you spend more than your monthly income on say a medical bill? Is the only way to handle this elegantly to use goals and a withdraw feature? If you keep Other spending negative from the start of the month or time of transaction, it makes it much harder to understand the rest of your spend when the limits already exceeded and there’s no new boundary to stay within.

Does Simplifi offer a native way to supply funds from existing account balances for unexpected expenses?

@Coach Natalie

ajbopp

If you spend more than you make in a given month, you have - by definition - blown your budget, annd in my view the software should report it that way.

One option to account for the unexpected is to create a Savings Goal for unplanned expenses (say, build it up to $10000 using your example above) and then withdraw from it when you need to buy a major appliance.

This won't make the graph turn from orange, but it is a way to track unplanned expenses.

DannyB

https://community.simplifimoney.com/discussion/comment/18780#Comment_18780

Yes. This is very important to remember. the Simplifi Spending Plan is current month only focused. This month you anticipate $X in income and $X in spending with $X available to spend through the end of the month. "Other spending" is a way to capture any spending not specifically covered in the rest of your Spending Plan. If you have a negative number Available, as talked about elsewhere, that means your plan has more in your various expenses then you have in planned income. Here is my current (November) Spending Plan summary:

Right now I am overspent if I don't make any corrections to my plan. For me this is a known problem that I need to figure out how to fix. But this is a example of an out of balance Spending plan that has nothing to do with actual inflow an outflow for November since it's only the 3rd. In order to get rid of the negative Available I need to either increase the income side of my plan or decrease the expense side of my plan. The goal of the Spending Plan is to allow me to make a plan for each month and to make necessary adjustments to bring "Available" to either zero (for a zero based budget) or into the positive range (for those of us who just can't figure out or simply don't want to live within the "confines" of a zero based budget 🤑😏).

GCA

https://community.simplifimoney.com/discussion/comment/18791#Comment_18791

Thanks!

This raises a couple more questions:

• I was using the "Available" as a final parent category for all frivolous spending or otherwise unexpected spending, but since it does not rollover, that means $450 available at the start of the month is always the case, and one $600 charge will send it negative
• If I budget explicitly for frivolous spending in my planned section, then that means anything under Other spending would be unanticipated or outside of my budget, is this the better way to do it?
• You mentioned that the only way to fix negative is to increase income or decrease expense sides. I can't invent income, but I can definitely cover with savings… does that mean I count a savings transfer as income? Also, I understand I could decrease expenses in the future months, but realistically if this is a one-off purchase and not a trend, then there's nothing to really change in future months

DannyB

@GCA

Responding in point:

• I believe you are right to think of "Available" as funds that are available for whatever "frivolous" spending you want and, yes, if you end up with a $600 expense and your available for the month is $450 (or anything less than $600) your spending plan will go negative.
• I have a planned spending category I call General Expenses and one I call Other Fun Stuff. While there are specific expenses I know I will incur during the month that go into one of these two categories, the amount I allot to these two categories is enough to cover much of our "frivolous" spending in any given month. In essence I plan to spend a goodly portion of my Available and have it set aside in my Spending Plan by using these two categories. As a result I seldom have anything in "Other spending" at the end of any given month. But, whatever does end up in "Other spending" that expense will be covered by whatever is in my Available for that month. Now, to cover that expense that goes over whatever my Available might be in a given month, I have a Savings Goal called Surprise & Miscellaneous that I contribute to monthly. Someday I will figure out how to capture my Left at end of month in this SG, but for now I make a monthly contribution and if I have an expense that is not covered by my maintenance/repair/replace accounts then I will dip into this Surprise & Miscellaneous fund to cover that expense and exclude the expense from my spending plan. Hope that makes sense.
• Indeed you can't invent income! You can increase income over time in a variety of ways, but making it appear out of nowhere is… well it's not ethical or legal anyway. So that leaves you with managing expenses to fit within your current regular and recurring income and any extraordinary, unexpected expense will throw things off - thus the long advised "emergency fund." With Simplifi, I beleive there is a way to add a transfer from savings to the Spending Plan as income, but I haven't found it useful the couple of times I've tried it. Instead, as I've mentioned, if I use savings to cover an expense, I then exclude that expense from my current month's Spending Plan. I have no problem doing this since all my savings have already been accounted for in my previous months' spending plans through my Savings Goals contributions. I know I will have extraordinary expenses. I also know I have annual and semi-annual expenses that will come due in given months. Simplifi doesn't currently have a way to incorporate those recurring annual and semi-annual expenses outside of using Savings Goals to set aside money to cover them when they come due. But something like having to replace a couple of whole house humidifiers is a bit of another animal ye still can be planned for but setting aside money month-by-month specifically to cover the unexpected. And one more time, you have accounted for this money in your monthly spending plans and if/when you have to dip into these savings, you can safely exclude the expense from your current month spending plan and keep your spending plan in balance.

I apologize for my wordiness but hope some of this makes sense. Like you, I'm a user and not a designer so take my ramblings with some since of "this guy is an armature not a pro." 😎