Personal Finance Manager Help/FAQ

JDM Software

Income Allocation

The "Income Allocation" tab displays your total year-to-date (YTD) income and how much of your total (not limited to the year selected) income is allocated to certain categories and how much is left unallocated. Allocating your income into categories is optional, but it is a good way to stay within your budget constraints.

Topics

Monthly Allocations Spreadsheets
Auto-Allocating Income
Manual Allocations
Unallocating Surplus Amounts
Carrying-Over Surplus Amounts
Target Monthly Allocations

Monthly Allocations Spreadsheets

The spreadsheet displays information for each month of the year (selected in the upper-right corner of the window). The "Target" amount is based on the amount entered in the "Target Monthly Allocations" for each category below. The "Allocated" amount shows the actual amount currently allocated to each category for the month and year selected. The percent column shows how close your actual allocation amount is to the target.

The "Expense Sum" column shows how much you have actually spent in each category for the particular month and year selected. In the case that a net credit has been posted towards the category, the expense sum will appear as a positive figure. The "Balance" column shows the amount you have allocated to the category minus your total spending in that category for the month.

A "Balance" figure highlighted in red indicates your expenses in that category have exceeded the amount allocated to it. This is sometimes ok, such as with irregular bills like auto insurance. For several months, you may have no expenses for the category, and then for one month you may have a large expense. As long as your monthly allocations spread out the expected payment, you will be within budget.

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Auto-Allocating Income

There are several ways to allocate income. The two check-button boxes in the top section of the window control some automated features. "Auto-allocate," if selected, will automatically allocate any income you enter in the "Transactions" page into the expense categories based on the "Target Monthly Allocations" entries. It will do a best-fit (by percentage) of any amounts which do not allocate completely across a month, and any amounts above what it can allocate will be stored in "Unallocated."

If auto-allocating, the program will determine the NEXT closest allocation date to start distributing the income. It will then continue on to the next allocation date if any excess income remains until it has cycled through all four possible dates. This means that if you get income during the end of the month, some or none of the income may get allocated to the month you received the income, but it will be distributed to the following month.

For example, say you have an income on the 18th of April of $300. If your target allocation dates are 5, 10, 15, and 20 (defaults), and you have set $50 to be allocated to "Food" on each date (assuming, for simplicity, that this is the only category), then $50 will be allocated to "Food" on the 20th of April, $50 on the 5th of May, $50 on the 10th of May, and $50 on the 15th of May. So, you will see $50 total allocated from that income into "Food" for April, $150 allocated to May, and $100 into "Unallocated."

Auto-allocation will only allocate up to 100% of the target values. Any excess will go into the unallocated amount.

For more detail on "Auto-Allocation," see the "Target Monthly Allocations" topic below.

"Auto-save Unallocated," if selected, will automatically place any income that would normally fall into the "Unallocated" area directly into the "Unallocated Savings" area on the "Savings" tab.

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Manual Allocations

To manually allocate an amount to a particular category, enter the value into the "Amount" entry field, select the "Action" pop-up menu to the right, and select "Allocate To." This will bring up a list of all categories to which you can allocate income. Select the category, and the transfer is made. Allocations will be made to the year and month you have selected. You cannot allocate more than what is shown in the "Unallocated" section of the top information bar. Note that the "Unallocated" amount will be reduced by the same amount you allocate to a category.

To manually unallocate an amount, follow the procedure above, only select "Unallocate From" in the "Action" menu. You cannot, of course, unallocate more than is currently allocated to the category for the selected month and year.

To manually allocate an amount to the "Savings" area, enter the value (within the limits of the "Unallocated" number) in the "Amount" field and select "Action" and then "Store in Savings." The amount will be subtracted from the "Unallocated" field and added to the "Unallocated Savings" field in the "Savings" tab. See "Savings" help for more information on how to distribute the "Unallocated Savings" amounts to savings goals.

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Unallocating Surplus Amounts

After a month has passed, if you wish to "free up" the amounts you allocated which exceeded your expenses, select the "Unallocate Surplus" button. Excess amounts will go to the "Unallocated" amount, and "Balance" figures should be reduced to $0.00 (or less, if an expense is greater than its allocated amount).

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Carrying-Over Surplus Amounts

Similar to unallocating surplus amounts, you can choose to carry these amounts over to the subsequent month by selecting "Carry-Over Surplus." Instead of putting the excess amounts (amounts allocated to a category which exceed the actual expenditure amounts for a particular month) in "Unallocated," this procedure will move any surplus allocations directly to the next month so that you will not have to re-enter the allocations manually.

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Target Monthly Allocations

The target monthly allocations section allows you to further budget your income. The total amount you have estimated for each category (for the year selected) is shown under the "Budgeted" column. The total amount you have allocated is shown under "Allocated." Ideally, these should be the same.

First, select your target allocation dates. These are dates when the income you have previously received will be put allocated to certain categories (if you have the "Auto-allocate" button selected). So, if you get paid at the end of every month, and you wish to allocate all the income at one time, just fill in the first column with the budgeted values and select a day such as 1, 2, 3, etc. Then, all the income you receive at the end of the month (once entered in the "Transactions" page) will be allocated to the expense categories at the beginning of the following month.

For more detailed allocation schemes, you can use multiple columns and distribute the income for each month to other target dates in the month. For example, if you get paid once on the 1st and once on the 15th of every month, you may wish to have two columns, one with a target date of the 2nd, and one with a target date of the 16th. This is also useful if you have bi-weekly payments and wish to allocate half of the money at the beginning of the month and half to later in the month.

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