Core Concepts - Weekly | A Better Budget App

How does rollover work?

Dan Seethaler — Mon, 13 Sep 2021 23:23:47 +0000

At the end of each week, you have the option to roll over your remaining Safe-to-Spend into the next week. The rollover is cumulative which helps ensure you are spending less than you earn on average.

If your Safe-to-Spend is positive, rolling over the remainder will increase your spending power for the following week. Turning off the rollover will keep the extra money safely in your bank account.

If your Safe-to-Spend is negative we generally recommend rolling that amount forward and working to catch up on your spending the following week. Sometimes, however, it’s better to get back on track than to try to keep catching up. If catching up feels like a non-starter then cut your losses, turn off the rollover, and start fresh.

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What is a committed expense vs. a day-to-day expense?

Dan Seethaler — Mon, 13 Sep 2021 23:20:24 +0000

There are two types of expenses within Weekly – committed and day-to-day expenses.

An expense is considered “committed” if it happens at a regular interval for a known amount. Subscriptions, bills, and loan payments are examples of committed expenses. Savings goals are also considered committed expenses. Since these expenses are for a defined amount they’re easy to budget for.

Weekly takes your regular income and subtracts all of your committed expenses to discover your Weekly Spending Limit. Each week the amount of our Weekly Spending Limit is added to your Safe-to-Spend for the week. Your Safe-to-Spend is used to cover all your day-to-day expenses like groceries, gas, clothing, and entertainment.

Many budgeting apps ask you to estimate how much money you’ll spend on day-to-day expenses. We believe this approach adds unnecessary complexity to your budget. Instead Weekly has a single bucket for all of your day-to-day expenses – your Safe-to-Spend. At the beginning of each week, your Safe-to-Spend is increased by your Weekly Spending Limit so you can take budgeting one week at a time.

The post What is a committed expense vs. a day-to-day expense? appeared first on Weekly | A Better Budget App.

What is considered regular income?

Dan Seethaler — Mon, 13 Sep 2021 23:18:05 +0000

Regular income is the starting point for building a budget. It is simply the average amount of money available to cover all expenses. For many people, regular income is simply their net paycheck.

Even if you don’t have a regular paycheck (or any paycheck at all) you’ll still need to determine how much you can safely spend. If your income is irregular (from contract or “gig” work) it may be helpful to average your income over the past three months and start there. (Make sure to reduce this number by any taxes you’ll need to pay if they aren’t being deducted when you’re paid).

In some cases, you may have a one-off income like a birthday check or a bonus at work. You can add this income directly to your Safe-to-Spend just like you would add a day-to-day expense. Tap the plus button on the Dashboard and simply select “income” instead of “expense” at the top of the page.

The post What is considered regular income? appeared first on Weekly | A Better Budget App.

Why does Weekly budget with averages?

Dan Seethaler — Mon, 13 Sep 2021 23:09:46 +0000

Weekly is different from most other budgeting apps. Many other tools track your income and expenses month over month. Some apps provide a spending amount based on your checking account balance and upcoming bills and income.

Although these approaches have merit – we believe that budgeting can be simplified to better support our psychological patterns as humans. Using an average weekly Safe-to-Spend amount gives you the same amount of money to spend every week. This simple change helps create healthy patterns of regular spending and avoids the spending roller coaster that’s common when trying to tackle spending a whole month at a time.

With Weekly, you’re able to check in with your budget and make adjustments every seven days. Monthly budgets only provide a restart 12 times per year. These regular check-ins help to quickly identify when your spending is going off the rails and can help get you back on track.

The post Why does Weekly budget with averages? appeared first on Weekly | A Better Budget App.

How is my Weekly Spending Limit calculated?

Dan Seethaler — Mon, 13 Sep 2021 22:57:53 +0000

Your Weekly Spending Limit amount is based on your regular income and committed expenses. Weekly uses these two numbers to calculate an average amount that can be spent each week, while still keeping enough money available for committed expenses like bills, loan payments, and savings.

To calculate this number we first have to find the average weekly amount for both your regular income and your committed expenses. Weekly takes the amount of each item and converts it to a weekly amount. For example, if you’re paid every two weeks, Weekly simply takes that income and divides it by two to get your weekly income.

Many bills, subscriptions, and loan payments are paid on a monthly basis. To convert a monthly amount to a weekly amount we divide by the average number of weeks per month which is 4.34524.

You can use this chart to convert any recurring transaction to a weekly amount.

Frequency	Calculation
Weekly	None
Every two weeks	Divide by 2
Twice a month	Multiply by 2 then divide by 4.34524
Monthly	Divide by 4.34524
Every x months	Divide by x then divide by 4.34524

After converting each bill or income item to a weekly amount, Weekly then subtracts the total income from total expenses. Voila! This is your weekly spending limit.

Weekly Spending Limit = Total weekly equivalent income – Total weekly equivalent committed expenses

Example Weekly Spending Limit Calculation

Let’s walk through a quick example budget so we can exemplify how the Weekly Spending Limit is calculated.

To keep it simple, we will have only three budget items.

Budget Item	Amount and Frequency
Salary	$2,000 twice a month
Rent	$1,000 a month
Car payment	$375 a month

Ok let’s start with income. You have a twice a month (bi-monthly) salary check of $2,000. First we find out how much that is per week.

$2,000 x 2 / 4.34524 = $920.54

So you are making the equivalent of $920.54 per week.

If you had more than one income, you would do the same type of calculation and then add them together to get your aggregated weekly equivalent income.

Now let’s tackle those two expenses (don’t I wish I had only two!) — they are $1,000 a month for rent and a $375 car payment.

Rent

$1,000 / 4.34524= $230.14

So you are spending the equivalent of $230.14 per week for rent.

Car Payment

$375 / 4.34524 = $86.30

So you are spending the equivalent of $86.39 per week for your car payment.

The next step is to add up all your weekly equivalent expenses to get a total weekly equivalent amount.

$230.14 + $86.30 = $316.44

To find your Weekly Spending Limit, you would simply the sum of all your weekly equivalent expenses from your weekly equivalent income.

$920.51 – $316.44 = $604.07

So the Weekly Spending Limit would be $604.07. This amount would be added to the Safe-to-Spend each week.

Special Note

You can see all the weekly averages of all your income and expense, pull up your budget (Tap menu, then “Budget”) and tap the “Group & sort” line and then under “Show amount in” select “Weeks”. Pretty cool!

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Learn more about why Weekly uses averages.

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