Hi, Tiller Community!
I’m a relatively new Tiller User, and I was wondering about the best way to handle transfers from an income deposit account to an operating account. For context:
My wife and I both have rather irregular income due to consulting fees, bonuses, commissions, etc, on top of our regular salaries. In the past, we worked out of one bank account, but it has made it difficult to track our spending and make sure that we have enough cash flow at any given time. Beginning with 2020, we switched to a two account system:
Deposit Account (DA): All income and other funds: paychecks, commissions, gift money, etc. is deposited into this account.
Operating Account (OA): This is our primary account that we use to pay bills, buy gas, groceries, etc— really all normal household spending.
My wife is paid on a weekly basis, and I am paid biweekly. Each Friday, I look at the expenses needed for the upcoming week and make a transfer from DA to OA.
The eventual goal is to be using an envelope budgeting system (we are Dave Ramsey adherents) and a zero based budget approach. Once I have our expenses tracked for a month or so, I think that I will better be able to plan at the beginning of the month for how much we need to transfer over and how frequently.
The next phase of this project will be how to handle things like debt pay-down (debt snowball method) and saving for various short term and long term needs. I have a third account that I can use for savings (SA). My thought here was that those sorts of transactions would go straight from Deposit to Savings so that they would not have to be part of regular, daily “operating expenses,” if that makes sense.
This has also been helpful in the case of reimbursed/irregular expenses that really shouldn’t be hitting our budget. For example: we paid up front for my daughter’s girl scout cookie inventory and will repay that once all the cookies are sold. I completed this transaction out of our deposit account, and I will reimburse that account as well— none of these transactions will hit our operating account or budget.
I’ve already seen a vast improvement on our cash flow by handling our funds this way. Forcing myself to be hands on means that I anticipate shortfalls better.
So my question, finally:
How should I handle these transfer from the DA to OA? My thought is that my monthly income from a budgeting standpoint will not necessarily match what we are bringing in, because I will transfer exactly the funds needed to cover operating expenses and then I would sweep that remainder to a savings account or toward debt paydown. Thoughts on how to best handle all this, workflow-wise?
FYI, I am using the Tiller Labs budget, not the foundation one, because of the rollover capabilities.
Thank you for your help,
Joe.