How to account for large annual expenses?
I have several large expenses that recur once a year, and I'd like to save a little bit each month. What's the best way to do this in Simplifi?
I tried making a savings goal for the total annual amount. So I can contribute 1/12 of the amount to that each month. When the bill comes due, I can withdraw from the savings goal to pay it. I'm not sure if I should also create an annual expense on the spending plan or if that will make it appear twice.
One problem with this method is that savings goals are not automatic. I don't want to spend time every month manually transferring money to each goal.
Best Answers
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One idea, without using savings goals ( or with, if you prefer ) is to transfer the money to a savings account (many banks have automatic savings transfers)… Then when the bill comes due, transfer the money back to a spending account, and unhide one side of the transfer (the side with the + income, as opposed to - expense). The transfer will then count as income in the spending plan, thereby cancelling out the expense it was transferred for.
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Rob Wilkens1 -
Hi @llamafilm
The Savings Goal "hack" is indeed the current way to handle your annual expenses. You can create an annual recurring expense so the bill will show up in your spending plan, but when you pay the bill using your SG savings you will need to mark the expense to be excluded from your spending plan since, in essence, you have already accounted for this expense through your monthly SG contributions and so you won't want it to show in your Spending Plan in the month it is paid.
Making contributions to your SGs in Simplifi is not all the burdensome. The SG feature is a digital accounting feature and Simplifi will keep track of how much of your actual bank accounts are set aside for SGs. You do have to pay attention to the assigned account when making your contributions.
There is a feature request for auto contributions that is in review by the product team.
Danny
Simplifi user since 01/22
”Budget: a mathematical confirmation of your suspicions.” ~A.A. Latimer0
Answers
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I plan to do this for my next large annual expense or for a vacation. Thanks for the tip.
Simplifi User Since Nov 2023
Minter 2014-2023
Questionable Excel before 2014 to present
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Well, huh… never thought of doing that but now that we have more flexibility with how to handle transfers that’s worth considering.
A couple of questions:
- How will this affect the income report for the year?
- How do you account for the original monthly transfers?
Danny
Simplifi user since 01/22
”Budget: a mathematical confirmation of your suspicions.” ~A.A. Latimer0 -
@DannyB On the original transfer TO savings, I'd unhide the negative money side (unclear if that's money in or money out, judging from a bug i tried reporting). This way the Transfer gets deducted from the spending plan for that month.
I don't know with certainty how it will affect the income report, I suspect that depends on whether you hid from spending plan or reports (reports might affect the income report).
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Rob Wilkens1 -
Thanks for the ideas. To be honest, all of this sounds too complicated and I don’t think I have the patience for it. If SG deposits were automatic that would be a huge improvement. I have at least 20 annual expenses, so entering each of those every month is not how I want to spend my time.
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I agree that it sounds complicated, although cool. So far I'm holding out for rollover! Let's see if and when we get it…
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Regarding the income report, the transfer does not display even if the exclude from reports box is unchecked. I tested that yesterday.
Simplifi User Since Nov 2023
Minter 2014-2023
Questionable Excel before 2014 to present
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I think that's because the income report is dependent on income categories. For example, a reversed (return, for example) expense category might not count as income either. So if i had a +$100 shopping as opposed to -$100 shopping it would only show as an expense not income.
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Rob Wilkens1
