Managing the Bank accounts

Managing bank accounts in the forecast requires specific attention. As we explained in Forecasting Principles, BudgetInMind doesn't know which bank account to impact when you set income or expenses in your forecast. It could be your credit card, your checking account or another account. As such, you must decide where you think the money will be drafted from when you fill the forecast.

But again, the 80/20 rule applies. Do not overdo it. Make it simple. Indeed, most of the time, you tend to use the same means of payments and you usually have one primary account. This simplifies a lot the job.

Budget Views show monthly variation

Remember that the Budget View shows the monthly variation of each account. This means that it displays Asset variations, Liabilities variations and Bank accounts variations. The balances are visible in the Balance Sheet View.

How to set my bank account variations in the forecast?

When you create your forecast, you will add a constant value (usually) every month for your Savings interests. Obviously, this goes to your Savings account. So whatever number you put in Interests:Chase Savings should be added to the monthly Bank:Chase Savings variation.

Apply that same concept for your 401K, your ESPP, etc...

If you know that you need to transfer money from your Savings to your Checking (or the reverse), then just increase one and decrease the other.

When you've done all those easy balances, just look at the Remain to allocate line, and put the amount in your primary account, for instance Bank:Chase Checking.

That will do perfectly for your forecast. No need to be more complicated.

An example

We continue using the cashflow example below to describe how to ventilate the cash flow in the proper bank accounts.

We set the cash flow properly in Forecasting Cashflow. We can now ventilate the cashflow between the various banks:

Primary Bank account: Since the Bank:Chase Checking is our primary bank account, we will set its forecast with what's left in the Remains to allocate line.
Savings Interests: Obviously, the $12.17 in Interests:Chase Checking will increase the Bank:Chase Savings account. So we set the Bank:Chase Savings variation forecast to $12.17.
401K: We know we've bought for $200 shares in our 401K, so we set the Bank:Schwab variation forecast to $200.
Put the remainder in your primary account: For the forecasting, we consider all the other transactions where made with the Bank:Chase Checking account, so we set the forecast to the Remains to allocate value, here $544.21-$12.17-$200 = $332.04.

According to our forecast, we expect at the end of the month to see our Bank:Chase Checking account increase by $332.04.