Know what to move to each account, and what to keep there
Most households pay bills from more than one account. Annual Budget Plan works out the fixed monthly transfer for each one, and how much should be on it on any given day.
Example: a car account
Fuel, insurance and road tax all come out of the car account. Averaged over the year they cost 3,948 a month. Transfer 4,750 and 802 a month is left over for repairs and tyres.
| Monthly transfer in | 4,750 |
|---|---|
| Fuel | −3,200 |
| Insurance | −636 |
| Road tax | −112 |
| Average monthly costs | −3,948 |
| Left for repairs | 802 |
How much should be on the account?
Transferring the same amount every month means the account builds up a buffer before the big bills. The cash requirement tells you how big that buffer needs to be on any date. If there is more on the account than that, the difference is yours to move.
- Bills
- Balance needed on the 1st
Accounts
Create an account for each bank account you budget with.
Linked bills
Link each income and expense to the account it is paid into or from. Bills without an account are flagged, so nothing is forgotten.
Fixed transfers
Record the standing transfers between your accounts, so the plan matches what actually happens at your bank.
Set up your accounts
It takes a few minutes, and the transfers are calculated from then on.