🤔 "Rollover Adjustment" in the new Savings Budget

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Context

The Tiller Money Labs team recently shared the Savings Budget, a new template that supports the envelope budgeting method. The Savings Budget is a great tool for users wanting to track savings. (Video demo.)

In some ways, the Savings Budget builds on the Envelope Budget (via the Tiller Add-on) but with several advantages:

  • Improved compatibility with the Foundation template and Tiller Money’s tools and workflows
  • Improved performance
  • Calculations performed by transparent, in-cell calculations (fewer scripts required)

How Rollover Adjustment Works

The Envelope Budget introduced a concept called Rollover Adjustment to compensate for ways that category savings totals could diverge from real world account balances— i.e. the problem of creating imaginary savings:

  1. Uncategorized transactions
    Uncategorized transactions represent expenses that are invisible to category budgets.
  2. Total transfers don’t net to $0
    Non-zero net transfers are also expenses that are invisible to category budgets.
  3. Categories that are not set as Savings categories
    Untracked categories allow period-to-period (un)favorabilities to vanish rather than accruing.
  4. Income budget is not equal to your expense budget
    Unbalanced cashflow budgets create unfunded savings. For example, if I budget for $2,000 of expenses and $1,000 of income and have $1,000 of actual income and expenses, I will have zero net cashflow, but would accrue $1,000 of imaginary category savings.

The concept was not well explained but the intention was, given any and all of the above circumstances, to represent an accurate offset that trued total category savings to one’s funded reality.

Opportunities for Improvement

More Intuitive

The Rollover Adjustment is the most misunderstood and confusing aspect of the Envelope Budget. We’d like to rework the concept in a way that makes the concept more immediately helpful to new users. (Among other things, this likely includes renaming it.)

Update for Savings Budget

One critical difference between the Envelope Budget and the new Savings Budget is that Savings Budget allows users to track savings in all, none or some of their categories, complicating the Rollover Adjustment calculation.

Feedback

General Feedback

If you are a user of the Envelope Budget (via the Tiller Add-on) , let us know:

  • Does the Rollover Adjustment make sense to you?
  • Do you find the Rollover Adjustment calculation useful?
  • How do you use the Rollover Adjustment calculation?
  • What would make Rollover Adjustment more helpful?
  • What would make Rollover Adjustment more intuitive?
  • Would a less comprehensive (and complicated) version of this calculation suffice?
  • What would you call it if you could rename it something more intuitive?

If you are not a user of the Envelope Budget (via the Tiller Add-on) , let us know:

  • Does your workflow require or benefit from a compensation like the Rollover Adjustment?
  • How do you currently make sure your envelopes/rollover categories are properly funded?

Detailed Feedback

  • How should Rollover Adjustment be calculated when not all categories track savings (i.e. what is the math)?
  • Should Rollover Adjustment be integrated into the Savings Budget dashboard (as a pseudo budget category similar to its integration into the Envelope Budget) so that (un)favorability can be tapped and managed through savings adjustments?
  • Should unbalanced savings adjustments be captured in Rollover Adjustment? For example, if I adjust +$1,000 of savings into a Travel category, should the Rollover Adjustment decrease by $1,000 since there is no(t yet) offsetting savings adjustment indicating where this money came from? (One challenge with implementing corrections for savings adjustments is that sometimes they make sense— unfunded adjustment— and other times they do not— truing up a budgets starting value based on pre-migration savings.)
  • What critical components of Rollover Adjustment concept should we also be considering to keep budgets honest?
  • Should the staged adjustments (not yet written with the Update Budget workflow) be included in the Rollover Adjustment calculation?

Experimentation

The Savings Budget already has preliminary rollover-adjustment calculations built in.

Unhide the columns on the right side of the template and check the Show Rollover Adjustment box in J3 to reveal this calculation in the template header.

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