Core Budgeting Concepts

What you'll learn

• What the main elements of Budger are.
• Why projection is the most important number you need to be aware of.
• Why we have 4 and 5 week months.
• What "closing the month" is.

What are the main elements?

Budger is built around a few core concepts that are pivotal for how you budget. These are:

• Categories
• Accounts
• Saving Buckets
• Annual Allocations
• Transactions

Categories

Accounts

Accounts are simply the accounts where you hold your money. This is non-opinionated: you can add anything from the account where you receive your salary, to a credit card, to the cash under your mattress: all that accounts are are places where you hold (or owe) some cash.

The main distinction to be aware is credit accounts. Credit accounts are consider debt and therefore any balance that is associated with a credit account will be substracted from the total wealth you have. This helps you have a realistic view of your net worth and cash status at any point of time.

Saving Buckets

Saving buckets help you put aside money for specific purposes. This is deeply personal: some people might have lots of small saving buckets for different purposes, while some people might have a few big ones. Regardless, it is a way of allocating money to a specific purpose, and removing it from the global projection. Add a saving bucket for your general out of the ordinary expenses, for your next holiday, or to buy your next house.

Annual Allocations

There rae many expenses that are paid annually, such as insurances, gym memberships or specific bills. Many people prefer to save for these on a monthly basis, corresponding to their salary. Annual allocations are a way of stating that a given annual expense will happen on a given month, and that you want to save money every month until you get to that point in time. For example, you might want to creater an annual allocation of £480 for the next year for your gym. Budger will automatically put aside £40 a month so that when the bill comes in a years time you have saved the money.

Transactions

The Projection

The projection is one of the predoninant numbers in the Budger app. It is a simple calculation: Account balance - saving buckets - annual allocations - budget amounts - overspent amount. This reflects how much money you should have at the end of the month if you spend your whole monthly budget. If this amount is negative, it means that you're spending more than you currently have, and suggests you should reconsider your spending habits.

Month Duration: Key dates and 4/5 week months

Here I will explain the relevance of the key date and what 4/5 week months mean.

Closing the month