Add a 12 Month Budget Average
Tim Groves
It would be really useful to have a 12 month view for budgets, not just the current 3 month average.
The main reason is that a lot of real household costs do not happen every month. Things like insurance, rates, car repairs, medical bills, holidays, Christmas, and annual subscriptions can come through once or twice a year. A 3 month average does not give a true picture of what needs to be budgeted.
What I’d like to see is a 12 month average that divides the total yearly spend by 12 months, even if the spending only happened in one month.
For example, if insurance was $3,000 for the year, the budget should show:
$3,000 divided by 12 = $250 per month
It should not show $3,000 as the monthly budget just because that was the only month with spending.
This would make the budget feature much more useful because we could accurately set aside money each month for these larger yearly costs. It would show what we actually need to budget monthly, instead of making one off expenses look like regular monthly spending.
Carl Thompson
Hi Tim,
We call these expenses 'one-offs'. You could add the allocation to the category in your budget. However, it can be hard to understand the allocation when the expense is so far out.
The way we recommend handling these one-offs is to use a short-term savings account, aka an emergency fund, and to mark the expenses on your cashflow forecast timeline so you can see how they will affect your cash on hand.
To account for those one-off expenses, add a goal in your SortMe to kickstart your one-offs/emergency savings account. We recommend starting with a target of 3k, then 10, then 3 months of expenses.
The goal amount will be added to your budget, and you'll see the fluctuations in your cashflow forecast. The forecast will show you when/if things get tight, so you can plan ahead and adjust the savings.
I was doing this myself this morning. It's really good.