Irregular income: Display how many months are covered by funds in the envelope or how many have been paid.

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  • Updated 4 years ago
FYI: I use goodbudget on two android phones. Rarely, I'll log into the web version.

====MY SITUATION====

I have irregular income as a freelancer. I might go a couple of months without income or I could get enough in one month to cover the next three months of income.

====POSSIBLE METHODS====

One way to approach irregular income would be to leave the income as unallocated until the beginning of the month and then allocate that month's money into the envelopes. However, this makes it look like all the unallocated money is "free", and therefore can be spent on whatever.

So, instead, I try to keep unallocated income at 0.

In practice, that means that as soon as I have income, I allocate funds first to any of this month's bills that haven't been covered yet, and then I cover next month's expenses, and then, if there's still more money, I can either throw it all at my credit cards or allocate it towards another month's expenses (depending on when I expect another payment for my work).

====PROBLEM WITH CURRENT UI====

With this workflow, some of the current visualizations aren't very useful. The line that tracks whether or not I am 'on track' given the month's elapsed time doesn't convey anything useful (in my case). The green vs red bar is very useful to let me know if I need to reallocate because I over spent an envelope. The size of the green bar is helpful in telling me whether or not I have saved enough to pay this month's expenses, but only until I pay this month's expenses. After that, the length of the bar is meaningless until the next month begins.

====QUESTIONS THAT THE UI NEEDS TO ANSWER====

What would be more helpful is some kind of visualization that answers two questions at a glance:
(1) Which months are covered by allocated funds? (this month? next month? the next next month?)
(2) Which months have been paid? (this month? next month?)

====ONE POSSIBLE WAY TO ACHIEVE THIS====

Perhaps there could be an "irregular income" mode (Perhaps a checkmark in the "Change Budget Period" screen), or a multi-month mode or something that changes the green bar visualization:

Maybe divide the bar into multiple chunks to visualize how many months are in the envelope. Perhaps goodbudget would automatically show multiple bars when there is more than the monthly budgeted amount in the envelope.

Once this month's bar gets paid (dropping to 0 for the month), then replace that bar with a check mark and the name of the month (e.g. "✓January").

Perhaps this monthly checkmark thing could be controlled by tap-holding on an envelope to get an envelope specific sub menu:
* Edit Envelope
* Mark January paid (or if already marked paid, mark January unpaid)
* Mark months paid... (with another popup that lets you select how many months you've prepaid in a particular envelope)

Then, as a month gets over (the end of the budget period approaches), you just drop the bar or checkmark from the last month and (if needed) roll everything into this month and future months envelopes.
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Jacob Floyd

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  • great, and would feel greater with these features!

Posted 4 years ago

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Steven Tafzil, Employee

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Hi Jacob,

Thanks for the detailed feedback. Generally, Goodbudget is designed to help you focus on the budget period you're in. That's where the green bars and the ahead/behind lines really come into play. As you've seen, pre-filling the envelopes two or three months ahead makes the bars and lines not very useful. 

I see what you mean about wanting to plan ahead with your irregular income though. Are your expenses generally the same each month? If so, I would recommend using annual or goal envelopes to budget for "next month" and "next next month." Instead of over-filling individual envelopes, you could store funds in a "next month" envelope that has a budget amount equal to your monthly budget. That way you can see how many months out you're good for. 

You won't be able to selectively prefill some envelopes and not others, but it will keep your regular budget period envelopes focused on the current budget period, which I think is pretty important in giving you an accurate picture of your spending day to day.

I don't know if we would change the regular month-to-month budgeting in the way you describe, since we really want it to focus on the current month as the user is living in it, but hopefully the workaround I described above can help you do what you want to do in your budget.
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Nikola Novak

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Jacob,

I receive regular monthly incomes, but I found it more useful (and think it would be more useful to you as well) to calculate total yearly expenses for each bill you receive monthly or quarterly. When you do that, create an annual envelope for each of the bills, with an amount slightly more than what you got from your calculation, if you can afford.

Every time you receive income, fill as many months into your annual envelopes as you can/wish. You'll know how many months you're good for from the amount in each envelope, plus with a little discipline you'll build a one-year buffer over time, for each of your bills, which can generate a nice amount of interest if put on a savings account or invested. Once your annual envelopes are full, you don't need to overfill them, just keep them full as long as you can - you'll need your buffer if your income happens to be a month or several months overdue.

When it comes to your monthly expenses (food and other necessities), I don't see why it's a problem to keep your money unallocated until you need it next month (although I do admit I also tend to keep my unallocated money at 0, especially after goal envelopes have been introduced). If you can't get yourself to leaving it unallocated, you can always dedicate the extra money towards some goal and then each month transfer money from that goal envelope to your monthly envelope.

Hope I helped a little.
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Mic

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It sounds like you don't budget your whatever spending? It may help you to set up some envelopes for that. I have a weekly fun budget and longer term savings for holidays, large essential expenses (car and house maintenance for example), my retirement plans and "surplus" money.

To add to Steven's idea of next month and next next month envelopes. I reckon if you had an envelope for 6 months buffer (or whatever length gives you comfort), you'd be able to see from that how long you have. Pay all your income into the buffer envelope. When you load your other envelopes, do it once per budget period, use 0 income and scrape the overage from your buffer envelope. If your buffer envelope gets overfilled then you can consider that spare and use it for your whatever fund.

Makes me feel i should have a buffer too.