Status Report: Using Savings Goals

Flopbot
Flopbot Superuser ✭✭✭✭✭
edited October 20 in Savings Goals
Here it goes,

Full disclosure, I have yet to understand Savings Goals on a functional level.  While I understand them in theory - and certainly understand what they're trying to do - I've had a bugger of a time getting them set up properly in the Spending Plan.  I'm doing this post as much for myself as for anyone else by trying to document where I currently stand.

What I Know:
  • Savings Goals = Represent a non-real transfer of money into an imaginary sub-account of the same exact account.  Money never actually leaves your real-world Savings Account, it just appears as if it does in the Simpifi app.
  • The Math = If your Savings Account has $1,000 in it and you have two Savings Goals: A ($200) & B ($500), this would leave $300 yet to allot.

  • Contributing Funds = Best done here.  Can only contribute up to the amount of the Available Balance in the above screenshot.

  • Withdrawing Funds = Best done with the "Withdraw from goal" button.  When you click it, you have two options which I don't fully understand. So far, I've used the bottom one since the purple spent color confuses me when I use the other button.

What I Suspect:
  • What Confuses Me = The biggest reason I'm struggling is structural, I believe.  For years, we do most of our daily purchases on a CC that gets paid off each month...doesn't carry a balance.  This means the CC payments are pretty dang high.  To cover those payments, I've found it necessary to consistently withdraw $1,000 - $2,000 each month from our Savings Account which gets us through till the next paycheck.  Then, after the paycheck clears, I redeposit the same amount $1,000 - $2,000 into the same Savings Account.  So far, every time there's a withdraw, there's a corresponding deposit in my Savings Account so - at least - I know there isn't a snowball building.  However, I acknowledge that this isn't the ideal situation.
  • Why It Confuses Me = For my Savings Account 100% of the balance is assigned to my various Savings Goals.  When I do these monthly transfers from the account, I'm doing them from the account's transaction register...not from Savings Goals.  No corresponding withdrawal/contribution occurs in any Savings Goals which means I get something like this.  I just don't know what to think about that -$ amount.


What I Still Have to Learn:
  • How Savings Goal contributions/withdrawals show up in the Spending Plan.
  • What visibility settings I need to use for the real-world transactions that are "Eligible to be Paid by Savings Goal".
  • The ramifications of the two "Withdraw from goal" buttons in the screenshot above.
  • Monthly, how to easily track and monitor all the transactions that are marked as "Eligible to be Paid by Savings Goal" (potentially 25-50) and then - once a month - actually do a transfer of money to cover them so my Checking Account doesn't start snowballing.

Typing this out has helped, I think one thing I need to do is to create a Savings Goal called "Temporary Loan To Myself" with an appropriate balance and then always Withdraw/Contribute using Simplifi's process...or always leave at least $2000 in the Available Balance area.  The first option sounds better.
Chris
Quicken Desktop user since 2014.
Brand new to Simplifi in 2021.
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Comments

  • DannyB
    DannyB Superuser ✭✭✭✭
    edited September 17
    @Flopbot

    Hi Chris, you got a lot going on here!  I'll take a stab at some of this and see if my understanding will help out.

    First, I'll share my thoughts on what's going on with the use of savings to pay off your cc.
    • In Simplifi, as you have pointed out, when you contribute to a savings goal Simplifi will set that money aside in a virtual account called "Savings Goals" in your accounts register. If you go to your Goal Screen and click on "By Account" in the upper righthand corner you will see which Savings Goals the money in your bank accounts are held for.
    • However, also as you know, this money is all sitting in your real world account as one lump sum.  When you withdraw money from your real world savings account to cover the payment to your cc you are, in essence, "borrowing" that money from yourself to make the payment.  
    • When that money leaves your real world savings, any money beyond any undesignated savings will be "borrowed" from your "Savings Goals" and if there is not enough money in those savings goals to cover the "loan" you will show a negative amount since you withdrew the actual funds but DIDN'T tell Simplifi to withdraw those funds form any one or more savings goals. WOW, that's a mouthful and I'll be interested to see if you could follow it.
    • When you redeposit money into your real world savings account to "repay" in full what you "borrowed" the amount in your virtual "Savings Goals" account should return to a positive number equal to what was there before all things being equal.
    Next some thoughts on creating, contributing to and withdrawing from Savings Goals... in my experience.
    • As you may be aware I use savings goals in a few ways and some of my SGs are actually for what I would typically think they would be used for.  
    • Here is an example of one of my SGs.  I create a goal for my quarterly estimated taxes due in April, June, September and January. Here is a screenshot of my current 4th quarter goal and of my 3rd quarter goal:

    • The "3rd qrtr SE Tax" goal is found under "Completed Goals" since I met the full amount I set for that goal at the beginning of September.  On September 15, my friends at the IRS reached out to my bank to transfer the full amount from my account and move it to theirs.  Once that was done I opened this savings goal and clicked on the 3 dot menu bar and clicked on "Withdraw from goal" and in the withdraw from goal screen clicked on "Withdraw to spend on goal" then in the next screen set the Amount to withdraw to the full $2100, clicked "WITHDRAW" giving me what you see above.  The purple indicates I have spent this money on the purpose for which I saved it.
    • The second screenshot is the current status for my "4th Quarter SE Tax" SG.  (I know, I need to get consistent in my naming of these things.)  Anyway, these SGs are set up to be subtracted in my spending plan:

    • In this case the best place to make my monthly contribution is from the spending plan...

    • As you can see the SG shows up in the list of SGs in my spending plan.  I find this to be the best place to make contributions to savings goals: click on 3 dot menu bar>Contribute to goal>select Account you want to contribute from, enter amount to be contributed, click CONTRIBUTE.
    • NOW, how this impacts your spending plan.  Our coaches have spoken to this on several occasions and after awhile it started to make sense to me.  Since I have been contributing $700/month to my Qrter SE Tax goal, I have in essence been paying that expense month-by-month and those payments have been accounted for in my budget and in Simplifi through my SG.  When it came time to pay my 3rd quarter estimated taxes, the actual money I had been saving was withdrawn from my savings account and sent to the IRS.  When the transaction was posted in my bank account and downloaded into Simplifi I opened the transaction and marked it "ignore from spending plan."  Then, as noted earlier, I went to the Savings Goal page and made a withdraw to spend on goal from my 3rd qrtr SE Tac goal to zero that goal out and Simplifi removed that money from my Savings Goals in the Simplifi bank register and all is in balance!
    This is getting a bit long so I'll stop here.  I hope this gives you some clarity but then again...

    I'll share some of my thoughts on your "What I still have to learn list" in another post here... or you can simply send a STOP message if you've had enough of my meanderings.
    Danny 
    Simplifi user since 01/22
     Budget: a mathematical confirmation of your suspicions.” ~A.A. Latimer
  • Flopbot
    Flopbot Superuser ✭✭✭✭✭
    edited September 17
    @DannyB,

    I always enjoy your "meanderings", as you called them and have learned so much from them; no need to stop!  Thank you for sharing your wisdom.

    ~~~~~~~~~~~~~~~~~

    I think I do understand what you're saying in your "mouthful" paragraph.  Essentially, if 100% of the amount in my TEST Account is assigned to my various Savings Goals and I transfer $400 out of TEST Account (i.e borrow) without doing a corresponding Savings Goal withdraw, the -$400 amount in Available Balance means I am - in effect - currently borrowing from any number of my existing Savings Goals.

    If I ever find that I can't transfer $400 back into my TEST Account, then in order to properly balance the books, I would need to decide which goal I'm going to officially and permanently borrow the $400 from and do a corresponding withdrawal.  This would bring the Available Balance back to $0.



    ~~~~~~~~~~~~~~~~~

    For your 3rd Quarter Savings Goal, lets say you contribute the full amount this year...



    And then, later this year, "Withdraw to spend for goal" the entire amount...



    And then, next year, contribute the entire amount...

     

    And then, later next year, "Withdraw to spend for goal" the entire amount...



    And the following year, contribute the entire amount again...



    And so on and so forth year after year after year.

    The longer you go, the more off the % grows until it just becomes laughable.  Also, note that every single screenshot above shows "Goal completed" even though it is no longer completed at the points in time when the Savings Goal returns to an Available $0 balance.  Unless I'm missing something, I don't see any way to "reset" a Savings Goal that's going to be used again for next year.  Because of this, the only thing I can see the "Withdraw to spend for goal" button being useful for is truly one-time purchases (Birth of Child #1, Birth of Child #2, 2023 Vacation Fund, 2024 Vacation Fund, New Home @ ___ Address, etc.).  Maybe I'm missing something? 

    ~~~~~~~~~~~~~~~~~

    Thank you.

    Chris
    Quicken Desktop user since 2014.
    Brand new to Simplifi in 2021.
  • DannyB
    DannyB Superuser ✭✭✭✭
    Hi Chris, thanks, glad to hear my meanderings are helpful.

    " Unless I'm missing something, I don't see any way to "reset" a Savings Goal that's going to be used again for next year.  Because of this, the only thing I can see the "Withdraw to spend for goal" button being useful for is truly one-time purchases..."  I believe you are correct in this assessment and that is why... 

    As for the Quarterly SE Tax goals go (as well as any other savings goals) once I meet the goal Simplifi moves it to the Completed Goals section dropping out of active goals.  Then I create a new goal for the upcoming quarter.  This avoids the problem you demonstrate.

    Here is how I use Savings Goals that are set up to handle multiple withdrawals.  Maybe this will give you some ideas of how the "Withdraw to spend for goal" can be useful.

    My example is my "Birthdays and Christmas" Savings Goal.  The goal amount is $2400 for the year.  We have birthdays in April, May, June, July, August, September, October and December and of course Christmas in December.  I contribute $200 a month to that goal and will complete the goal in December.  But, throughout the year we buy gifts and often we'll buy a Christmas gift when an opportunity arises to do so. When one of those purchases shows up in my downloaded transactions I will mark it "Ignore from Spending Plan" and make a "Withdraw to spend on goal" for the amount of the purchase from the SG.


    Here is what it looks like today.  I actually make the contributions for this goal from my wife's checking account rather than transfer it to our savings account since we spend this money as the year progresses.  I actually need to do some catch up with this savings goal since we have just finished a round of birthdays in August and September I haven't addressed yet.  But since the money for these purchases is in checking, they are covered whether I doe the leg work in Simplifi or not. I just haven't made the adjustment to the SG.

    This type of use of SGs will be totally avoidable and unnecessary when the development team finally incorporates rollover ability into the Spending Plan.  B)

    Hope this is a helpful example for the usefulness of the "Withdraw to spend on goal" option.

     


    Danny 
    Simplifi user since 01/22
     Budget: a mathematical confirmation of your suspicions.” ~A.A. Latimer
  • DannyB
    DannyB Superuser ✭✭✭✭
    Since I have some time while I supervise my ex-son-in-law's visit with my granddaughter, I'm going to ruminate on your "What I still have to learn" points.

    How Savings Goal contributions/withdrawals show up in the Spending Plan.
    IF you have set up your SG to be subtracted in your Spending Plan it will show up in the "Income after Bills and Savings" section under Savings Goals and the amount that needs to be contributed will be deducted from your income for that month.  Withdrawals DO NOT show up in your spending plan since they have already been accounted for in your monthly contributions.  That is why it is important to mark the expense covered by the SG to be ignored in your spending plan.

    What visibility settings I need to use for the real-world transactions that are "Eligible to be Paid by Savings Goal".
    Interesting question, but not sure I really understand what you are trying to get at. Anyway, for me, Simplifi does this since Simplifi is where I keep track of all my financial transactions including those "Eligible to be Paid by Savings Goals."

    The ramifications of the two "Withdraw from goal" buttons in the screenshot above.
    Withdraw to spend on goal" I shared my thoughts on this item in previous post.  As far as the second choice, that type of withdrawal simply moves the money back into your "general funds" for use elsewhere. Using the spend on goal will keep the funds in your goal but show them as spent while showing you what is still available.  Withdrawing for other use will reduce what you have in your SG since those funds are no longer available for that goal.

    Monthly, how to easily track and monitor all the transactions that are marked as "Eligible to be Paid by Savings Goal" (potentially 25-50) and then - once a month - actually do a transfer of money to cover them so my Checking Account doesn't start snowballing.
    My initial reaction to this is, "Wow, 25-50 seems like a lot of expenses to have covered by SGs."  But when I examine my own use of SGs in Simplifi I can see where this can add up.  Fortunately, my ex-son-in-las has finished his supervised visit AND I'm helping my son do some painting so I'll use that as an excuse to bug out on this last item.
    Danny 
    Simplifi user since 01/22
     Budget: a mathematical confirmation of your suspicions.” ~A.A. Latimer
  • Flopbot
    Flopbot Superuser ✭✭✭✭✭
    @DannyB,

    In my initial read through of your two replies, one thing I was missing is the importance of marking "Ignore from Spending Plan" on the transaction when something is being paid for with money that's already been saved.  This is what my "Visibility Settings" statement was referencing in the yet to learn section.  I suspected something like this was needed, but you confirmed it.

    When I have a transaction like this, I've always added a tag to it so I can easily find it later in reports and with filters.  I tweaked my tag by adding "(Mark Ignore SP)" to prompt me to also check the Ignore from Spending Plan.



    For the 25-50 transactions statement, it might be a bit high, but maybe it would be helpful to know this bit of backstory.  The way we're setting up our Spending Plan - which is an ongoing process - is to create Planned Spending items only for those things that I know for sure we'll spend money on each month (Food, Gas, Diapers, etc.) and deposit the remainder directly into our Savings Account.  Then, when we spend on something that is elidable to be covered with Savings Goal money (Clothing, Books, Entertainment, etc.), I'll mark it with the tag above and, at some point, I'll run a report showing just how much we spent that needs transferred from our Savings Account to our Checking Account.

    With that, I need to go to bed.  I'll keep reading your reply again later with fresh eyes.
    Chris
    Quicken Desktop user since 2014.
    Brand new to Simplifi in 2021.
  • Coach Natalie
    Coach Natalie Administrator, Moderator admin
    edited September 19
    Hello @Flopbot & @DannyB,

    This is an excellent discussion regarding Savings Goals!

    I think @DannyB did a great job of explaining things, however, I did just want to add one thing. When it comes to withdrawing from a Savings Goal, it's important to note that each withdrawal option will impact the Spending Plan differently for Goals that are being included in the Spending Plan.

    The reason for this is if you have a Goal that's included in the Spending Plan and you've already been counting/deducting your contributions each month, when it comes time to spend for the Goal, we don't want that spending to count against you again. So not only do you want to ignore the actual transaction from the Spending Plan, you'll also want to use the "Spend for Goal" withdrawal option so your Spending Plan is not impacted in any way.

    Conversely, withdrawing "for another purpose" will place those funds back into your spending funds, and will remove them from being counted in the Spending Plan up to the standard monthly contribution amount. This option is great to use for changes in circumstances where you may need to use that Goal money elsewhere.

    Our Savings Goal Support Article here has more details on each of the withdrawal options, as well as how contributions and withdraws impact the Spending Plan. 

    I hope this helps!

    -Coach Natalie
  • DannyB
    DannyB Superuser ✭✭✭✭
    edited September 19
    @Coach Natalie I have a question about the possibility of deleting completed and expended goals - "expended" meaning that I have also spent all the funds for the intended purpose.  As shown below it looks like if I delete an already completed goal from which all funds have been used for the intended purpose, Simplifi will still send the funds for this completed and expended goal back into the original account holding those funds before they were spent and thus throwing that account out of balance with additional funds that do not exist in the real-world account.

    If this is true then completed and expended goals can't be deleted and will build up over time and the Completed Goals section will become unwieldy.  If this is not currently possible then perhaps this needs to be a feature request to have more options on how to handle completed and expended goals.  Perhaps some way to close out a goal and then archive and/or hide it for those who want a historical record of their SGs, or to delete it outright for those who don't want or need such a record.  This would be in addition to @Flopbot 's idea of being able to reset and reuse a goal which he has turned into a feature request elsewhere.




    Danny 
    Simplifi user since 01/22
     Budget: a mathematical confirmation of your suspicions.” ~A.A. Latimer
  • Coach Natalie
    Coach Natalie Administrator, Moderator admin
    Hello @DannyB,

    I think having the ability to archive completed Goals is a great idea!

    I received a request on @Flopbot's Idea post for the ability to reset Goals to edit that request to cover both archiving and resetting, however, I feel that these are different abilities and would serve different purposes.

    With that said, I personally think that they should be separate Idea posts, and you are more than welcome to create one requesting the ability to archive completed Goals. But I can also edit the Idea post for resetting Goals to cover both topics. Totally up to you guys, and you can respond to me here or on @Flopbot's Idea post with what y'all decide. :smile:

    https://community.simplifimoney.com/discussion/3826/ability-to-reset-savings-goals-edited#latest

    -Coach Natalie
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