Hi - I tried searching for variable income, lumpy income, but I didn’t see anything.
I am going through a divorce and talking about the payments I will make to my ex. We have agreed to a monthly amount my ex will get, which will be paid 2x per month. The challenge is that I am paid 26 times a year and for a number of months I sort of would get what is left over after I have given my ex the support we agreed to. In some months the amount I receive would be less than we agreed to while in other months it would be more due to the pay period stuff. The average for the year would be the correct amount. So in certain months my income will be lower than my expenses and in others it will be higher than my expenses. I am using the saving budget so I know the income will roll over. Do people have thoughts on how best to handle this? I could just let the tool do its thing and roll over, but for a number of months the optics would look pretty bad. Income lower than budgeted, expenses higher than income…etc…Appreciate the feedback.
If you’re concerned about intra-month timing effects, have you looked at the new Monthly Budget Calendar template that @Edward just published?
Thanks Randy. I did look at that and not sure its what I am looking for. I don’t think I need a daily look. Here is an example of my challenge.
January - Income: 5,500 / Expenses: 7,700
February - Income: 6,000 / Expenses: 7,700
March - Income: 6,200 / Expenses: 7,700
April - Income: 13,100 / Expenses: 7,700
For this period the income and expenses match, but as you can see there are some months that are below the average income for the period and my budget would show a shortfall for income from Jan-March and my expenses would be higher than income. Over the whole period though things would balance out. Hopefully that helps.
I see what you are talking about.
This is the allowing-things-to-even-out-over-time magic that the Savings Budget performs.
I think so long as you have enough in the bank to cover expenses even though you income won’t cover all your expenses in any given month then knowing that things will even out later with the savings budget would be okay!
In which case, the savings budget calendar would not be the best tool to use?
I’m not certain I understand your question, @heartsong…
The Monthly Budget Calendar is a great tool for understanding timing and net cashflow. That said, it isn’t taking into account how much money is in your accounts— i.e. it is not wired to your balances— to cover any shortfalls.
Just to clarify. Are you saying that the Monthly Budget Calendar doesn’t help me see how much I have spent daily along with my remaining balances on those accounts? That would be awesome. I’m currently using Excel. Would MS Sheets be a better product for any of your budget tracking add-ons?
I’m sorry but I don’t quite understand your question(s). Can you clarify?
The Monthly Budget calendar shows the following:
- Your spending actuals based on the filter selected above
- Cumulative spending for the month
- How much is left before you hit your selected spending target
So yes, it will show you how much you spent on a specific day, and how much is left before you hit your total expense budget target (for all your expense type categories on the Categories sheet and their budgets). But it doesn’t not show balances for accounts. The balances Tiller pulls are a separate data feed and not associated with transaction categorization or budget targets.
Hopefully that helps!
If you’re using Excel I believe this Monthly Budget Calendar is also available if it feels like a fit for you.
Otherwise, the Foundation Template is a good option as well though doesn’t offer daily spending actuals out of the box.
Is the optics problem just a personal nag with you or do you need to show a surplus for some reason to someone else? If it’s the former, it seems like the Savings Budget is your best option here. If the reality is that your expenses are going to exceed your income in some months, all you can really do is save ahead of time to cover the shortfall or cut your expenses. I assume the latter is challenging with fixed expenses in play.
We have months where we spend more than we earn. Outlier expenses are going to happen. I carry a buffer of extra cash in our checking account for months like this which is roughly 1 month of expenses. It’s basically an emergency savings account within my checking account, if you will. If that first line of defense gets breached, then I retreat to the second line of defense which is our separate Savings account which currently holds several months of cash.