How to Use Simplifi with Any Kind of Budget
Creating and tracking budgets can feel overwhelming. Either your budgeting tool won’t do what you want it to, or it takes a ton of time to keep up with it. That’s why Simplifi’s spending plan gives you the flexibility you need to track and watch your money your way. The system can support any budgeting method you like, making it easy to stay on top of your finances in less than 5 minutes a week.
Here’s how to use Simplifi with 4 of the most common budgeting methods!
How to set up zero-based budgeting
What is a zero-based budget?
Zero-based budgeting, also known as zero-sum budgeting, is a budgeting method that accounts for every dollar you make. It’s called “zero-based budgeting” because, at the end of each month, every dollar has done its “job,” whether that means buying groceries or adding to your 401(k).
Zero-based budgeting segments your monthly budget into highly detailed categories: this much goes toward groceries, that much goes toward your car payment, and so on. Keeping track of this kind of budgeting on paper is a Herculean task, but Simplifi makes it easy to see where every dollar is going.
How to use zero-based budgeting in Simplifi
Step 1. Income, bills & subscriptions. When you connect your accounts, Simplifi identifies your regular income, bills & subscriptions. Those will be set up for you and added to your spending plan automatically.
Step 2. Other planned expenses. Simplifi lets you add any other planned expenses you want to include, for things like groceries or a clothing budget. Go to your spending plan, choose planned spending, and add each item you want to track.
Step 3. Savings goals. To give your dollars a savings “job,” add as many savings goals as you’d like. Simplifi lets you track them separately, making it easy to adapt to a zero-sum budgeting style. You can use savings goals for your debt-reduction plans too.
Step 4. Check your spending plan. With everything in place, your spending plan will keep up with it all for you automatically. You can see your progress toward each savings goal and each planned spending item while keeping up with your bills too, all in one convenient place.
Your spending plan will show that you have no money left to spend, but that’s okay. That’s the whole point of zero-sum budgeting! Just stick to your planned spending and savings goals as you follow your zero-based budget.
Step 5. Adjust over time. As you live with your plan for a while, you’ll want to change any bills, planned spending items, or savings goals that are frequently over or under your budgeted amounts. For example, you might want to adjust your utility bill as it fluctuates throughout the year, or you might switch your kid’s daycare and need to reflect the new charges.
How to set up an envelope-style budget
What is an envelope-style budget?
An envelope-style budget is a bit like a zero-based budget but it only limits a few categories of spending instead of predetermining every single dollar.
It comes from the cash-based system of cashing a paycheck and splitting it up into different envelopes for categories like food, utilities, etc. When each envelope ran out, you had to stop spending on that item or take cash from a different envelope. You could also save up money by adding cash to an envelope over time and using it later, like for the holidays.
Today, the envelope system lets you set up any virtual “envelopes” you want to, whether for saving or for spending, without having to give every single dollar an assigned job. Simplifi makes this easy because you can choose just the categories you want to track.
How to use envelope-style budgeting in Simplifi
Step 1. Income, bills & subscriptions. This is the first step no matter how you want to use Simplifi. It takes advantage of Simplifi’s automation to identify your income, bills & subscriptions as soon as you add your accounts.
Step 2. Other planned expenses & savings goals. For envelope budgeting, rather than adding every single thing you might spend money on, you can choose to add only the planned spending categories and savings goals you specifically want to track.
Step 3. Check your spending plan. Because you haven’t added every single dime of your income, your spending plan will show you what you have left to spend. You can treat this like an “everything else” envelope or a “fun” envelope, spending this money on anything you like with the confidence that your designated envelopes are covered.
How to set up a 50/30/20 budget
What is a 50/30/20 budget?
The 50/30/20 budget is even simpler than either a zero-based budget or an envelopes budget. In this budget, there are just 3 main categories to follow. Half your income (50%) is designated for your needs, 30% goes toward the things you want, and the last 20% goes toward paying down debt, or savings, or both. It’s that easy.
Simplifi is set up perfectly for this budgeting system. Read on to learn how to do it!
How to use 50/30/20 budgeting in Simplifi
Step 1. Income, bills & subscriptions. If you want to use a 50/30/20 budget, be sure to take the extra step after adding your accounts to connect your billers too. If you connect your utility bill, for example, Simplifi will know exactly how much that bill will be, so it can include actual amounts in your spending plan instead of estimated “budgets.”
Step 2. Other planned expenses. Add all your planned expenses that are “needs.” Do add your groceries, for example, but don’t add things like your morning latte habit.
Step 3. Savings goals. Add your savings goals for savings or paying down debt (or both) and set up your monthly contributions to equal 20% of your income.
Step 4. Check your spending plan. Since you’ve only added your needs and savings goals, what your spending plan shows you have left to spend should be about 30% of your income. If it isn’t, take a hard look at your “needs” and see if there’s anything that might really be more of a want—or see if there’s anything you can adjust to make your budget work.
How to set up pay-yourself-first budgeting
What is a pay-yourself-first budget?
A pay-yourself-first budget is the simplest of the 4 budgets listed here, and therefore the quickest to set up in Simplifi. In fact, it works very much like Simplifi’s underlying design, letting you take complete control of your finances with extreme ease and flexibility.
In a pay-yourself-first budget, you start by deciding how much you want to spend every month toward paying down your debt or adding to your savings. Then, every month, you make those payments first, then pay your bills, then spend what you have left on anything you want.
And guess what? That’s exactly how Simplifi works, making it easy for you to set aside what you’ll need for your upcoming bills while feeling free to spend the rest.
How to use pay-yourself-first budgeting in Simplifi
Step 1. Income, bills & subscriptions. Do these steps look familiar? Connect your accounts to set up Simplifi. The app will identify your income, bills & subscriptions automatically so you know how much you’ll need each month and how much you’ll have left to spend.
Step 2. Other planned expenses. Add any planned expenses you need, like groceries.
Step 3. Savings goals. Decide what you want to put toward paying down debt and/or savings and set those up as savings goals. Simplifi will help you make sure you make those contributions and celebrate your success when you do.
Step 4. Check your spending plan. Because you’ve added everything you need and also added your savings goals, you can spend whatever you have left in your spending plan this month on anything you like, knowing that your long-term plans and your monthly bills are under control.
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