Making a budget that survives the month

Most budgets fail in the first fortnight, and usually for the same reason: the numbers were invented rather than observed. SageFin's answer to that is to fill them in for you.

Start from what you already spend

When you create budgets, SageFin can suggest an amount for each category from your own recent spending — the average of what has actually left your account, per category, per month.

So a first budget is a matter of adjusting figures rather than inventing them. That is the whole difference between a budget you keep and one you abandon: the categories you were going to be optimistic about are already showing you what you really do.

You can also recalculate later, which re-derives every budget from recent spend at once. Useful after a move, a job change, or a few months of drift.

The two ways to budget

SageFin can do this in either of two shapes, and they suit different people.

A limit per category

The familiar one. Groceries £600, dining £200, and each has its own line and its own progress.

Precise, and it asks a lot of you: every category is a decision, and a month where you underspend one and overspend another looks like two failures rather than one wash.

Flex

Three buckets instead of many lines:

• Fixed — rent, insurance, the things that do not move.
• Flexible — the pool you actually make choices inside. Groceries, dining, shopping, together.
• Non-monthly — the ones that arrive quarterly or yearly and wreck a monthly budget when they land.

You set one figure for the flexible pool rather than a dozen limits. Spending more on dining and less on groceries is not a failure; it is what the pool is for.

If category budgeting has not stuck for you before, this is the one worth trying.

Rollover

Unspent money in a category can carry into next month rather than evaporating. It is on by default, and it is the honest behavior: an underspend is money you still have.

It also makes the non-monthly problem solvable. A category with a little set aside each month accumulates until the bill arrives, instead of showing a catastrophic overspend in the month it lands and a suspiciously virtuous eleven months either side.

Bills that are not monthly

Car insurance, road tax, an annual subscription. Tell SageFin the payment amount and how many months apart it comes, and it works out the monthly set-aside — or leave the interval off and set the monthly figure yourself if the timing varies.

Either way the shape is the same: put a little aside every month, so the month it arrives is unremarkable.

When you overspend

Nothing punishes you. The category goes over, and you can move money to it from one that is under — which is a real gesture with a real consequence, not a rewriting of history.

If a budget looks wrong rather than exceeded, check the categorization first. Nearly every surprising budget figure is a transaction in a category you did not expect, and why a transaction landed in that category is the page for that.

Alerts

A budget can tell you when it is close to its limit rather than after it has passed it. Worth setting on the two or three that actually vary; on rent it is noise.