Surplus Funds Overview
Build your emergency fund with clarity
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Build your emergency fund with clarity
Last updated
Was this helpful?
The Surplus Funds Overview is a crucial feature in our app that empowers users to effectively manage any surplus funds by strategically allocating them towards future payments and financial targets. This feature becomes available when you designate a specific category as "Surplus Funds" within the category details. Below, we will walk through how surplus funds are managed, how overspending is automatically covered, and how you can leverage the forecasting tool to plan ahead.
This tool is one of the easiest and most effective ways to build a 6-month emergency fund. By consistently stashing surplus money into the designated category, you can gradually accumulate the necessary savings. The app's visualization tools help you track your progress, making it simple to see how close you are to achieving your goal. When you need to access the fund, it's just a matter of withdrawing the amount you need, ensuring that you're always prepared for unexpected expenses.
To begin, you'll need to designate a category as your Surplus Fund. This can be done within the category details:
Navigate to the desired category: Go to the category where you want to allocate surplus funds.
Mark as Surplus: Within the category details, you'll see an option to mark it as "Surplus Fund." Simply enable this option to designate the category for surplus funds.
Once a category is marked as a Surplus Fund, it automatically takes on a special role in your budgeting process.
One of the immediate benefits of designating a Surplus Fund is the app's ability to automatically cover any overspending in other categories. Here's how it works:
Overspending Detection: If you overspend in any other category, the app will automatically pull from your Surplus Fund to cover the deficit.
Real-time Adjustments: The app adjusts your budget in real-time, ensuring that overspending doesn’t disrupt your overall financial plan.
This feature helps maintain financial balance by ensuring that overspending in one category doesn’t lead to financial strain or disrupt other financial goals.
The most powerful tool that becomes available with a Surplus Fund is the ability to forecast how long your surplus money will last. This forecasting tool provides a forward-looking view of your financial situation, allowing you to plan with confidence:
Surplus Duration Calculation: The app calculates how long your surplus funds will last based on your future payments and category targets.
Visualization: You can view this information in a concise and visual format, with detailed breakdowns for upcoming months.
Adjust for Overlaps: A crucial feature here is the ability to adjust for overlaps. This option prevents double counting when upcoming payments overlap with category targets, ensuring that your forecast is accurate.
For example, imagine you’ve allocated $4,425.00 to your Emergency fund category. In September, you have $3,000.00 worth of payments (transactions and targets), which your surplus fully covers, leaving you with $1,425.00. Moving into October, your total required payments are $2,400.00, but you only have $1,425.00 left in your Surplus Fund. This means you’re 59% covered for October, and no funds remain for the subsequent months. The app's forecasting tool clearly displays these percentages, helping you anticipate when you’ll need to allocate more funds.
For effortless budgeting, use the Fund Targets feature in your Surplus Fund category. It automates allocation at the start of each month, ensuring your key categories are funded with zero hassle!
When managing your budget, you might wonder whether it's better to allocate money directly to future months or to stash it in a Surplus Fund. While both methods have their advantages, using a Surplus Fund offers unique benefits, especially in terms of visualization and flexibility.
Enhanced Visualization
The Surplus Fund provides a clear, organized view of how much money you have set aside and how it can cover upcoming expenses. Instead of spreading your surplus across multiple months or categories, the Surplus Fund centralizes this information, allowing you to see at a glance how long your money will last. This consolidated view helps you make informed decisions about your spending and savings, as you can easily track the impact of your surplus on future obligations.
Flexibility in Usage
Another key advantage of using a Surplus Fund is the flexibility it offers. When you allocate money directly to future months, those funds are essentially "locked in" until that time arrives. However, by stashing money in a Surplus Fund, you retain the ability to adjust your plans as your financial situation changes.
If, for example, you need to access those funds earlier than anticipated, you can simply withdraw the amount you need by subtracting it from the Surplus Fund and reallocating it to a different category or for immediate use. This flexibility ensures that you’re not restricted by previous decisions and can adapt your budget as needed.
Easy allocation
When the new month begins, simplify your budgeting by using the Fund Targets feature within your Surplus Fund category. This feature automatically allocates available surplus funds to your pre-set targets, ensuring all key categories are covered without any manual work. It’s an efficient way to make sure your budget stays on track with minimal effort.
This method not only keeps your budgeting process simple and flexible but also gives you a powerful tool to manage your money in a way that aligns with your goals.
By setting up a Surplus Fund in the app, you gain a powerful tool for managing your finances. Whether it’s covering unexpected overspending or planning for the future, the Surplus Funds Overview helps you stay on top of your budget with ease and precision.
