Spending Plan versus Traditional Category Budgeting Poll

UrsulaA

As a community user, I have seen numerous requests of people requesting rollover for spending categories. I like seeing my net income left at the end of the month once I close out the spending plan using the release available for spending feature in planned spending. I also like seeing my bills and subscriptions on top, it helps me identify the recurring expenses quickly. For one off expenses, I am just changing the planned spending amount for the month in which the bill occurs or entering a recurring bill. If I spend less than I planned for eating out, I prefer to save the funds and not increase my eating out budget in the following month most times.

So, which one do you prefer using?

1. Spending plan approach
2. Traditional budget with categories stated and rollover

I am trying to find if I am in the minority with option 1 in this forum.

Thanks!

ajbopp

+1 for the Spending Plan approach.

By definition, a budget should be static, not changing month-to-month based on spending habits. One of the most attractive features of Q-Simplilfi is that enforces true budgeting techniques. Changing your budget willy-nilly every month or even more frequently only encourages unhealthy spending habits.

laurel616

I like both - there are certain budgets for me (like groceries or eating out, for example) that I want to have targeted goals for each month that I am trying to stay under, without rolling anything over into another month.

But I would also love to be able to roll over my leftover entertainment budget. I personally want to manage my entertainment spending by having a cap to what I am willing spend for it at a given time. But I also don't want to deprive myself unnecessarily so carry over unused spending month over month (something I did automatically in Mint and am doing manually now with monthly budget adjustments).

I think that having very static budgets can work for many people (especially those that have predictable income from an employer) - but I also think it's very reasonable to edit budgets month over month (or even within a month). For example, on a month that I knew I was traveling a lot, I would adjust my grocery budget down and my eating out budget up to reflect the reality of where I expected my money to go. And as we approach the holidays, my gift budget increases, and I decrease other budgets to accommodate for that growth.

DannyB

Another +1 for the Spending Plan approach.

Ditto @ajbopp for month-to-month budgeting.

The "rollover" I would like to see would be for those non-monthly fixed and flexible expenses that I need to be prepared for. I don't even particularly want this to be part of the current Spending Plan if instead we could have something like an Annual Expenses Spending Plan or simply making Savings Goals more robust and flexible.

ajbopp

I would expect the gift budget to be a savings goal so that the money is there when I need it.

Irecently bought a $70 video game (Entertainment) when I only have $40 a month budgeted for Entertainment. My expectation is that Q-Simplifi will show me that I have overspent my budget this month, and will show that I underspent next month when I spend nothing at all.

I certainly don't want it to adjust things dynamically to account for occasional variations.

nanoviking

The Simplifi spending plan approach is useful as a planning / forecasting tool, but that's about the limit of its usefulness.

Where the spending plan fails is telling a user exactly how much money is available to spend for any given category at any given moment. Using the video game example from @ajbopp@ajbopp - if I have $50 budgeted for entertainment but spend $70 on a video game, Simplifi has no way of telling me whether I actually have the extra $20 in my account - has my paycheck hit yet? Did I go over budget last month and drain my account? Is that extra $20 going incur overdraft penalties? And then the following month, Simplifi just expects the user to know that they overspent the previous month and generate a category surplus? Any indicator that requires the user to independently know the fundamental state of the system being measured isn't a useful indicator at all.

Furthermore, Simplifi's insistence on monthly spending plans just doesn't work for income streams that don't align with a monthly periodicity - bi-weekly paychecks or quarterly payments for example. It's not a useful tool when one month a user is told they'll have a several thousand dollar spend shortage, followed by a several thousand dollar spend surplus the next month simply because of the date of a paycheck.

Ideally, Simplifi would allow a user to build spending plans but then use some sort of zero-based accounting system to track fund availability in parallel. This could be based on an annual budget, with customizable spending plan sample windows (bi-weekly, monthly, quarterly etc.) based on income stream periodicity.

My assumption is that the lack of this capability is where most of the frustration around savings goals and lack of rollover stems from.

UrsulaA

Progress indicators with the spending plan will be useful, like @DannyB 's post.

https://community.simplifimoney.com/discussion/comment/14204#Comment_14204

EL1234

I think that allowing rollover on a per-category basis would make it easy to keep variable spending to a monthly average on any given year, rather than having us manually update the spending plan on months where we expect to spend more or less in that category than the average month.

For example, if I want to keep my restaurant spending under $120/year (arbitrary number chosen because it divides by 12), I could budget $10/month on the spending plan, and rollover the extra funds on the months I don't eat out at all until I have enough to spend the amount I want to spend on one meal.

This would make sticking to a yearly budget much easier than, say, budgeting $40/month (if that was the price of a meal) and then manually keeping track of what I'm up to for the year and releasing the extra funds when there are, or the reverse, budgeting only $10/month and then raising it when I do spend, or going with neither and just letting that category land, unexpected, in the Other Spending section.

UrsulaA

@EL1234 - you described a rollover feature I will use. I need an annual limit and then use funds as needed. This will be awesome if implemented.

EL1234

https://community.simplifimoney.com/discussion/comment/25460#Comment_25460

If only it was up to me!

While we're dreaming, ideally it should show me how much I have left for the year, and how much I should use for this month if I expect to spend around the same each month.

Oh, and let us choose which month to start the year from :)

But seriously, I'll take it even without those extras!

@Coach Natalie wondering what you think about this idea (rollover for a category with an annual limit).

UrsulaA

In the meantime, I am modifying the spending plan by month showing the annual expense in the month it occurs. I am keeping enough in my savings to make the payment.

Coach Natalie

@EL1234, I honestly don't have an opinion one way or the other on rollover. I'm a month-to-month budgeter and was long before Quicken Simplifi; I write my "leftovers" or "overspent" amount in a notebook each month and have also done this for years. 🙂

https://community.simplifimoney.com/discussion/comment/11846#Comment_11846

-Coach Natalie

UrsulaA

Sounds like the notebook keeps you accountable @Coach Natalie. Something sticks in the brain when writing stuff down.

I like looking at the Net Income report to see how I am doing month to month. I like that I can make the spending plan reconcile with net income when releasing funds. When I spend from savings, I see an overspent bar in net income from my past history. Only used Simplifi fully since last month. I may try the transfer from savings and showing one side as income for the next time I use savings for a large expense.

RobWilk

+1 for the spending plan approach from me as well.

That's part of the reason I chose Simplifi (now Quicken Simplifi, or in Play Store, Quicken).

I feel like if a traditional budget says I'm allowed $100 for entertainment, I have to spend that $100 in that category, so if it's the end of the month and there's money left, I'm obligated to spend it on something I don't need "because the money was set aside." The spending plan lets me only hold aside money for categories i know i have planned spending in, while allowing me to not spend like a robot. I think if I were more 'anal retentive' I would prefer a budget.

UrsulaA

Check out the Reddit post by simplifiDev, a moderator for the SimplifiMoney Reddit sub dedicated to Simplifi. This adds some color as to how to think about the spending plan. I bolded some items.

The comment echos what @RobWilk stated above. I find my spending plan to be simpler than my Mint budget, with fewer lines to track. I like seeing the bills and subscriptions separate, I even cancelled some I forgot I had.

simplifiDev post

First of all, thanks for your comments! They’re very insightful into how people think about Spending Plan when first entering the product. That said, Spending Plan is not intended to be a Mint-like budget. It is intended to be an overview of your finances for the month. We intentionally have not put limits on your income and spending and instead wanted to allow you to see things from a holistic level. The question to ask is how much will I spend this month? And hopefully, we will help you find the answer. If you go back to the previous month, we will hopefully answer the question of how much did I spend last month? Your 'left over' spending should be the same as your 'Available to spend' in spending plan.

Again, the lack of limits in income and spending is intentional in Spending Plan. If you do want to set limits, I'd recommend (as others have) using watchlists to set limits. We will even notify you if you are approaching your limit there!

Thanks again for posting, hoping I added some clarity.

https://www.reddit.com/r/simplifimoney/comments/183hl8b/comment/kb6fr72/?utm_source=share&utm_medium=web2x&context=3

UrsulaA

Another useful comment in Reddit about the spending plan from simplifiDev

First of all, thanks for your comments! They’re very insightful into how people think about Spending Plan when first entering the product. That said, Spending Plan is not intended to be a Mint-like budget. It is intended to be an overview of your finances for the month. We intentionally have not put limits on your income and spending and instead wanted to allow you to see things from a holistic level. Your “other spending” is intended to be your “everything else” spending. Planned spending is the closest thing we have to a budget, but we try to accommodate you if you do go over. I agree, we could redesign planned spending to allow for more planned items on the screen.

We also automatically take out your planned items from your overall budget because we want to show you how your planned items fit into your overall spending for the month. Starting from 0 will not happen because that isn’t the intent of planned spending. We want to allow you to think about your plan before you have actually spent anything.

If you want to have something akin to a traditional budget, you can definitely use watchlist and track your spending in your category, tag, or payee, including income. But yea, Spending Plan is not a budget, it’s a plan!

https://www.reddit.com/r/simplifimoney/comments/184izwk/comment/kb5qrkh/?utm_source=share&utm_medium=web2x&context=3

Flopbot

@UrsulaA

Great idea!

+1 for Spending Plan.

Unless I miscounted, that brings the vote total to 6 for Spending Plan and 2 for Traditional Budget.

UrsulaA

I think you are right, @Flopbot. Did you count the "I like both" post in both spending plan and traditional budget or left that one out?

Flopbot

I counted it as a vote for each @UrsulaA .

UrsulaA

Sounds good, there is a vocal rollover cheer group at the rollover budget feature request. I thought I needed rollover, but now that I am learning to use Simplifi and keeping an open mind, I am not sure I need that feature anymore. Hope Simplifi implements rollover in a way that makes it optional for us using the spending plan approach without major disruption.

DannyB

The "rollover" idea has been discussed, dare I say, ad nauseum, in the two years I've been using Simplifi. The longest sustained discussion is probably in response to the "We want your feedback on the Spending Plan" first posted July 2022 where the community is specifically asked about roll over.

I agree. I wouldn't want the Spending Plan which, IMHO, is the crown jewel of Simplifi to be disrupted by whatever the team comes up with and implements.

Rather than roll over in the existing SP I would like to see a distinct unit that is designed specifically for non-monthly/annual expenses. It would be, in essence, built on the existing Spending Plan but "annualized."

UrsulaA

@DannyB I agree with you. The spending plan is Simplifi's differentatior and I hope is kept. A separate module for non monthly expenses will be nice.

Wedo778

I don't think there really is as much difference as is implied, nor do I think adding a rollover stops anyone from doing what they are doing today.

I like the layout of the spending plan better than what I had in Mint with the way it categorizes all the different areas of income and expenses. Its not more or less functional, but laid out better and easier to quickly consume. It also handles single payment, annual expenses (license plate renewal for example) better. But in the end its the same budget items.

Rollovers are always optional, adding it isnt hurting anyone unless it is implemented very poorly. If you don't want to roll over your dining out, don't. I didn't and wouldn't want to roll over every category. But some categories are more fluid than others. Like groceries or gasoline. I gas up when my car needs it, I can't really just stop driving anywhere and stop eating when I hit my limit. But if I happen to need gas or groceries on the 1st of the next month, having rolled over my leftover budget from last month makes a lot of sense. "month" is somewhat an arbitrary boundary for these kinds of items, unlike other things that are billed exactly once a month or that I can use self control to stop doing if I have reached my budget.

The watchlist handles these things better, and so I wind up tracking them there. But its hard to track some things in the spending plan, others in the watchlist, and feel like I have a good total picture of my spending.

I guess this isn't a vote either way.

UrsulaA

If it was up to me, rollovers will work as follows:

Add an option to this menu to add available to next month. The adding will sum a positive (money left) or negative value (money overspent) to the corresponding expense category in the following month. Sometimes I want to know if I can cook less and eat out more in the next month if I have money left from months prior. Other times, releasing available for spending can be used if I do not want to rollover (current system).

Also, for those who do not want to use it, keep the release available for spending button to show money left for the month stay there.

Wedo778

I would go one step further and when setting up the spending category, you have a setting on whether to automatically roll it over, automatically release it, or leave it for manual consideration (which then has both of those options too).

But you already know my opinions on having to do all of this manually each month.

UrsulaA

https://community.simplifimoney.com/discussion/comment/26211#Comment_26211

That will be ideal, @Wedo778. I like your ideas. Simplifi already has a way to modify a given month's expense, so the manual part seems covered.

More automation will be great.

On another topic, I added a feature request requesting the release of planned spending to be optional. We can see our actual numbers under net income, no need to reconcile the spending plan against net income if the user does not want to. You inspired this idea.

https://community.simplifimoney.com/discussion/7230/make-releasing-planned-spending-funds-optional-edited

oldit51

I would like to be able to use both methods depending on the category. I have a few monthly bills that are the same or relatively the same each month and I can be fine with identical budget each month.

I have others like water and electric that I prefer to budget an annual number since the usage fluctuates seasonally and I'd prefer to have unspent budgeted from one month to roll forward to the next etc.

I'm still getting used to the Bills vs Spending Plans on Simplifi and in hindsight I'm not sure I see any benefit to me in the few Bills that I have set up. The reminders are nice, but not seeing the spending from those bills in the Spending Plan takes some getting used to.

New to Simplifi Dec 2023

Minter 2015-2023

UrsulaA

Agreed on getting used to not seeing the bills allocated to categories. I got around it by setting up a watchlist that adds all the planned spending and bills. I also created a target that equals planned spending + bill amount.

I like how the tile and the chart tell me how am I tracking.

Bar chart pre-dates the tile, not a bug.

oldit51

I am also utilizing watchlist for my important categories. I Think I'm just going to kill what I put into the "Bills" and fill the numbers for those in my spending plan so I can have everything in one place. The only thing I'll lose is reminding me of upcoming bills, but i haven't needed those before anyway.

RobWilk

You lose the cash flow chart benefits as well. Not saying you should or shouldn't do it, but i just wanted you to be aware of that.