🤔 "Rollover Adjustment" in the new Savings Budget

6 posts were split to a new topic: Comparing Savings Budget Available to Account Balances

Thanks Aronos!

Quick question, how do you use the rollover for income and how do you make adjustments to it? (Budget vs savings adjustments) I would like to hear how any of you make income adjustments regardless of how you use the savings budget!

I’m trying to do more of a zero-based/envelope system. I don’t want my end of month adjustments to erase my bad spending habits or affect budget history.

I just tried using a new workflow, where I don’t adjust the savings and budget for the current month, but I adjust savings in the following month based off of the savings carried from previous month’s. This makes it so I can see the negative available balances when I look at the previous month. The envelopes start out as zero before adding the current months budgets.

But I’m not settled on what to with income adjustments. I was just subtracting the positive savings values from savings; however, when I have unbuffered income, I realized that I can budget for it in the next month, which reduces the available to zero, and helps fix my budget health.

Does that make sense to any of you? I know I could have explained this further and more clearly.

@randy @matt @matta

Income categories will roll over the same way that expense ones do. When you’re budgeting, it’s a good idea to work with the income you received the previous month unless your income is very predicable. So say I earned $100 in July. When I’m setting up my August budget, I allocate $100 in spending. What I end up actually bringing in in August doesn’t matter until I setup my September budget. If you’re doing strict zero-based budgeting, then the amount will be the same as what is shown in the “Savings” column for the month you’re working with since that is what came in during July and rolled over (because in July you spent June’s income.)

I usually do it like this as well.

If you use the “last month’s income” method with a strict zero-based budget then this issue goes away and I highly recommend doing it this way. I know it can be tough to start though because it essentially requires that you have a month’s worth of income sitting in your bank account. Now of course you should anyway (and then some) but that’s sometimes easier said than done. If you don’t, it’s a worthwhile goal.

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@hild.jay I do this also, it has worked well for me.

I’ll admit I don’t have a great system for income budgeting. I think the strategy @aronos described, budgeting with the previous month’s income, makes a ton of sense and I’ll probably start doing that.

I’ve actually adjusted my approach to irregular income in the past few months. I’m no longer adding it to my income budget, leaving the budget to planned, reliable income. Similar to @hild.jay and @matt, I move savings from the irregular income categories, but I do it within the current month rather than waiting for the next month. This allows me to be a little more proactive in balancing income and spending.

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I’m hoping you can all help me understanding how the Rollover Adjustments work in the Savings Budget. I’ve read a TON of conversations, but I have not found an exhaustive and concise explanation of how the Rollover Adjustments actually work. I’m really struggling to understand this, until this ‘clicks’ for me, I am unable to use the spreadsheet as I don’t fully understand how to properly use it. I think I’ve narrowed down my confusion to Cash Flow, I don’t understand what happens when you have positive or negative budgeted cashflow or positive or negative actual cashflow. I’ve created a list of the possible scenarios I can think of that I’d like to understand. I get how rollover adjustments work for income and expenses and how they carry over to the same category the following month. I’m really struggling to understand what positive and negative cashflows do. Does the money just disappear the following month?! Please help!

Can you all please help me to define the affect of these below scenarios?

Cause Affect
If actual income is greater than budgeted income the net surplus will carry over to savings in the same category
If actual income is less than budgeted income the net deficit will carry over to savings in the same category
If actual expenses is less than budgeted expenses the net surplus will carry over to savings in the same category
If actual expenses is more than budgeted expenses the net deficit will carry over to savings in the same category
If monthly actual cash flow is positive (actual income is greater than actual expenses) where does extra money go the following month?
If monthly actual cash flow is negative (actual income is less than actual expenses) where does the negative cash flow go the following month?
If monthly budgeted cash flow is positive (budgeted income is greater than budgeted expenses) where does extra money go the following month?
If monthly budgeted cash flow is negative (budgeted income is less than budgeted expenses) where does the negative cash flow go the following month?
If monthly budgeted cash flow compared to actual cash flow is positive how does this impact rollover adjustments?
If monthly budgeted cash flow compared to actual cash flow is negative how does this impact rollover adjustments?

Hi @randy, @aronos, @matta, @cculber2, and @matt, I know it’s been a while since the latest on this discussion. What do you think of my questions above?

Are you talking about columns K and L in the Savings Budget? Or the Rollover Adjustment in the older Envelope Budget (which has been deprecated)?

The general idea is that if you budget doesn’t balance (i.e. expense budget !- income budget) then the rollover adjustment has an accrual that is kind of like a loan (that eventually needs to be dealt with). For example, if your expense budget totals $2000 and your income budget totals $1000, you have a rollover adjustment of -$1000 * 3 = -$3000 that you need to eventually pay back.

@randy, I’m not talking about the Envelope Budget, I have never used that spreadsheet, I am only aware that it used to exist, but I’ve never seen it. I am referring to the newer Savings Budget, I am a new Tiller user as of just a month ago. Column K and L are with a group of other columns that are hidden by default. I assumed all of that was background data for the tool that was visible and not something I necessarily needed to look at to perform my budget from month to month. Maybe I’m wrong on that.

I think the more I look at those columns though, maybe it is critical info I need to be looking at? So maybe a tutorial on Columns K and L would help me. There is some info above from @cculber2 that gives some definitions on Net Budgets, Net Actuals All, Net Actuals Savings, and Offsets. I will study those and see if I can piece it together.

I think I understand the loan concept, that looks like Net Budgets L13. In your example of -$1000 * 3, is that for 3 months? Just making sure I understand where the *3 came from.

I do want to make sure I’m not wasting anyones time, so maybe I need to re-read some documentation that is already out there. For this loan concept from the net budgets value, where is it documented how to look at this number and apply it to a budget?

Also, if columns K and L are important to be looking at for balancing a budget, should they not be hidden by default? Should some of the more important values from Column K and L be displayed somewhere in the dashboard?

A few notes about your post, @Lieder:

  • I’m confused by your request about the Rollover Adjustment in the context of the Savings Budget because Rollover Adjustment isn’t really a feature or acknowledged in the documentation of the Savings Budget. It is only part of the now-deprecated Envelope Budget.
  • While we often use hidden column on the right to perform background/support calculations, the (hidden) columns K & L in the Savings Budget are there to provide additional metrics on budget health similar to the Rollover Adjustment concept. (The columns further to the right drive the template.)
  • The discussion with @cculber2 in this thread about those metrics is what led to their creation. The documentation here is the best we have.
  • Yes: “*3” is to account for three months.
  • TLDR; If you make sure your expense budget equals your income budget every month, you don’t need to worry about this budget health & “rollover adjustment” stuff. It is just there as a correction factor for people who have imbalanced budgets that lead to phantom savings that are not funded.
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