Savings Budget at bottom of several issues

I have been struggling with the Savings Budget and hope someone can help. I’m going to take this one step at a time.

I have the Foundation Template, the Savings Budget, the Savings and Debt sheets set up and “appear” to be working. I want to transfer funds earmarked for my “Backpacking” category (Checking account) to a savings account to be tracked as income (I guess). Here’s what I did:

  1. I went into my bank account (Checking) and transfer funds to my savings account. On the second day, after the download showed in transactions, I categorized the funds leaving the checking account as “transfer” and the funds coming into the Savings account as “Income Other.” Is this the correct categorization?

If you’re transferring funds from one account to another, both sides should be a transfer. I set mine up to have ‘Transfer Out’ and a ‘Transfer In’ categories to make it easier to tell which way the money is going, and I assign ‘Match’ tags when both sides are done to make sure I’m not missing any transactions.

When it comes to budgeting, the location of the funds isn’t important. Your ‘Backpacking’ category can be assigned to transactions that come in from any account. The Savings Budget does feel like ‘envelope budgeting’, but in this case, you don’t need to use accounts as envelopes, you use categories instead. Saves a lot of transfer headaches!

So, I don’t think I tried the transfer/transfer option (tired everythingelse). I’ll plug those catgories in and see if it fixes eveything else in the chain.

There’s a few pieces to the puzzle. First, you need your ‘Backpacking’ category in the Categories sheet. Then, you need to define what the budget is for that category, which you do on the Categories sheet to the right of the Category name (enter one amount for January, or specify different amounts for each month). Once your budget is set, the Savings Budget sheet should show the budgeted amount for each month you choose. As transactions begin to come in (eg. you bought new shoes) you would categories that transaction as ‘Backpacking’, and the Savings Budget sheet should then show the ‘Actual’ amount that you spent, and the ‘Available’ should reduce to show how much you have left in your budget. The transfers of funds won’t play a part in this, as they should be categorized as transfers, which are hidden since they don’t impact budgeting.

Yes. I did set up the Backpacking in the category sheet and defined the budget for that category. The Savings Budget does show the budgeted amount. Then I go through all of the expenses and categorize them. So far, so good. But then, what about the portion of the income that isn’t being expensed because I want to save it for later on? I can’t expense the budgeted amount because I have not spent it. Let’s say it’s $100 I want to sock away every month, to be expensed down the road at some time. How do I handle that?

This is the problem I’ve been trying solve for months. I have a number of categories that don’t get paid on the monthly basis. Some don’t get paid until the end of the year. The Backpacking is an example… I want to sock away $100/month to a goal (which I plugged into the Savings an Debt sheet) of $500 over the next 5 months. The only way I could see to do this was to make a transfer at the bank of $100 each month, and categorize that as income in my savings account (big hassle). Then later down the road, expense it out of the Savings account. I just don’t know what else to do with it. It kind of looked like that was what was being done in the Youtube video about the Savings Budget.

I think you’d create a ‘Savings’ category, and set a budget for it (eg. $66). Then in the Savings Budget sheet, use the ‘Adjust’ tool to remove $66 from an Income category, and add $66 to your ‘Savings’ category.

Sorry, I switched to $100. Okay, let me think about this.

Am I asking the program to do something outrageous, that needs a special workaround to do? Am I the only one who has expenses that don’t occure every month, but are paid, say, every few months, or only once a year (like property taxes)? I mean, my lawn guy gets paid every other month, my electric true-up bill gets paid at the end of the year, my water bill gets paid every quarter… and so on an so on. I’m not sure what the Savings sheet does, if it doesn’t do this. But maybe I’m wrong, and the Savings sheet is meant to do something entirely different.

The Savings Budget sheet allows you to budget and track money in a similar fashion to ‘Envelope’ budgeting. It does not actually move any funds around, just allows you to see how much from each category has been spent in relation to what was budgeted. It allows you to carry over excess funds or deficits from one month to the next, and also allows you to move budgeted funds from one category to another. This all only happens within the Savings Budget sheet though, you won’t see the carryovers or adjustments in other reports or on the Categories sheet.

For something like property taxes, you have two options on how to budget for that. Lets say your property taxes are $1200 per year (an easy number to work with). You could budget $100 per month, in which case the funds will keep increasing each month until December (if that’s when you pay). You could also just budget $1200 for December, and $0 for the rest of the months. In my case, I divide mine into two payments, so I have a budgeted amount in January, and another in July, the rest of the months are $0. I set the budgeted amount to the actual payment total, so I won’t be seeing any carryover or deficit.

Other things could work the same way. I pay for trash pickup quarterly. Let’s say it’s $90 per quarter. I could set my budget to $90 in Jan, Apr, Jul & Oct, for a total of $360 per year. This would be clean, only showing budgeted amounts in the months that I need to pay them. I could also set my budget to $30 per month, every month, for a total of $360 per year. In this case, If I’m starting from $0, in January I’m going to be -$60 since I budgeted $30, but had to pay the $90 bill. February it will go to -$30, then $0 in March, then in April back to -$60.

There’s pros and cons to each method of tracking. I use both. I usually use different budgets for specific months when I have predictable payments (like the trash example that is quarterly), and spreading an average over each month when things in that category aren’t so predictable (eg. groceries). Hope this helps!

Okay. So, let’s say you wanted to budget $100/mo with a goal of $1200 by the end of the year. How specifically do you handle that? The budget is for $100. You are not spending that $100 this month. So there is no transaction to categorize. Nothing is going to show up to categorize. So… what do you do next?

Are you saying that you do nothing? If you do nothing, then I guess the Savings sheet would just kind of roll over the budgeted amount on paper, and as long as you didn’t spend it any other way, you would have it sitting there at the end of the year. Is that the way you deal with it?

Good question. I’m just starting with the Savings Budget this year myself, and though I thought something like that would be simple, now that I look closer at it, I’m not entirely sure myself. Hopefully someone that’s been using it a bit can chime in with some tips!

This is correct @mpstaples

Have you watched this webinar/demo of the sheet to get familiar with how it works?

Well I’ve been struggling for literally months trying get this function… tracking expenses not due this month. It’s caused me several breakouts of hives, severe arguments with my wife, many many lost hours I will never see again. And it seems like it should be an easy, mainstay of any budget program. But every time I try something, something else downstream stops working. It may be that this way of doing it… just ignore the expesnse and it will roll over… might work. I’ll try it and see. It’s too bad you can have something a little more positive, like rotating the money into a seperate account where you know you have it and can’t spend it on anything else. But that just doesn’t seem to be in the cards.