What happens to extra income, or when I overspend on my budget?

spal255

I am coming over from a zero-based budget approach, YNAB, and now that I'm debt free and looking toward bigger goals, I've decided to pay a little less attention to small transactions and more to the over-all picture and investing. In YNAB I was forced to constantly balance my budget and income. If I overspent I was prompted to take money from another category. What happens in Simplifi if I over spend. Also, if I make more money then project for the month does that income get applied to the next month? This questions seems simple to me but I have not seem the answer anywhere. Thanks.

DannyB

Hi @spal255

Welcome to Quicke Simplifi!

First, and this is important and causes a bit of confusion?, stress?, frustration?, if not taken into account from the get-go - Quicken Simplifi takes a different approach to personal money management then other apps and is certainly a different animal from YNAB.

I'll try to speak to each of your questions as a fellow user:

• "…a zero-based budget approach…" QS IS NOT set up as a "zero-based" system and as it is set up is not, IMHO, easily manipulated to be so. Since it is not, at least as I have understood it, a zero-based system, you will not be "forced" to account for every penny in QS. Infact, QS will show you month-to-month, what you have available (undesignated) during the month and leave your unspent/undesignated cash in a sort of limbo at the end of each month. What you do with that unspent/undesignated cash is up to you, but that left at end of month will NOT "rollover" into the next month.
• "…pay a little less attention to small transactions and more to the over-all picture…" QS will sort out your expenses differently from the other guys. Recurring bills/subscriptions planned savings goals and even recurring transfers that you want visible in your monthly spending are all accounted for in the "Income after bills and savings" section of The Plan. I think of these as my "fixed" expenses. You don't "budget" these expenses the same way you would in something like YNAB. These are fixed monthly recurring expenses that are not going to vary (I know - some utility bills vary by month and season, but these are still fixed monthly bills/expenses) and are paid to set vendors on set days month-in and month-out. In QS these expenses are built into the plan before you start planning your recurring flexible expenses.
• "…forced to constantly balance my budget and income…." The second section of the Spending Plan is Planned Spending, and this section comes closer to what is traditionally thought of as "budgeting", and I think as such causes a bit of confusion for more traditional budgeters. You (supposedly?, theoretically?, should?) have a certain amount of your income that is available AFTER you have accounted for all your fixed expenses. This is the pool of cash that you use to plan how much you want/need to spend on you monthly variable expenses - groceries, transportation, entertainment, shopping, etc.
• "…If I overspent I was prompted to take money from another category. What happens in Simplifi if I over spend…" Once you set a spending "goal/limit" for your flexible expenses, QS will track your spending in your selected categories and let you know if you go over in any one category. BUT, you are not "forced" to do anything about it. If you want to rebalance your Planned Spending, you have two choices. 1.) You can reduce the amount in one or more of your other Planned Spending categories and increase your goal amount in the "overspent" category or, 2.) If you have any "available" undesignated cash, you can simply increase the goal amount in the "overspent" category, and it will deduct that amount from you available. Another option, you can simply leave the category "overspent" so you know you went over and can decide if you need to make any changes to your monthly goal/limit for that category going forward or if this month's overspend is a one-off situation. A final option, QS recently added "rollover" for Planned Spending categories for users who want surplus/deficit to be brought forward into the next month.
• "…if I make more money than project for the month does that income get applied to the next month?" I've already mentioned this, but NO, QS will not apply any extra cash left at the end of the month toward the next month. Also, as mentioned above, it's up to you to do with that left at end of month what you will - Invest it?
• "…over-all picture and investing…" I use the Personal Capital - now Empower - free dashboard to track my "over-all" picture and have worked with Personal Capital - now Empower. - investment advisors for managing my portfolios. I use QS for my "street level" planning and tracking. QS does have an investment module that is nice to have, but I don't use it beyond keeping my current balances up to date in QS for net worth purposes.

I would recommend that you take advantage of the various support articles available here for more detailed info and the how-to's.

https://help.simplifimoney.com/en/

Hope this helps.

Wedo778

Simplifi does not force you to allocate every penny, and does not actively prevent you from spending more than you make. It tells you what you are doing, and shows you when you over or under spend. What you do about that is up to you. And I think this is a good thing. I never used YNAB because of their approach to this. For example my car insurance, home insurance, federal taxes and property taxes were all due in April and May. Those items comprise a very large percentage of my monthly income. I am inherently going to go over budget those months. I am not living paycheck to paycheck and have the cushion for it so long as I underspend other months and stick to a sensible annual budgeting plan. It would not be possible for me to "take away from other categories" those two months enough even if I sat in the dark all day every day with the lights and heat off eating top ramen every meal.

Simplifi does not act as a check register to ensure you do not spend money you do not have. If you want to reconcile each month in the same way, you'll want to create some buckets of Planned Spending which account for every penny you make, and then manually adjust them on the last day of each month to zero out.

spal255

Thank you for the excellent answers to my questions! I agree on YNAB, it was great but as my budget loosened and my debt went away it was almost as if it was forcing me to spend extra income instead of leave it where it is/invest it! Anyway, I'm enjoying Quicken so far. You both helped me with my confusion.

EL1234

I just thought of a way to float some extra income from one month to the next (I wouldn't want this to be automatic necessarily, I'm not sure how often I'll use it but I wanted to use it now because my April income was a lot higher than May due to tax refunds).

I created a manual bank account (I used the Other type so it would show at the end of the list, but Checking or Savings should also work) and called it Income Float. I also created a custom Income category called Float. Then I created two transactions using the new account and category - a negative number on April 30 and a positive number (same amount) on May 1. That left my custom / dummy account balance at zero, didn't fudge any numbers in my real bank accounts, and transferred that amount of income from my "left at end of month" in April to my "available" amount in May.

So far so good!

It was also a nice way to fix income that I allocated towards a specific bill that was supposed to be paid in April but for some reason the company only charged my credit card in May.