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Getting started with Budget Forward

Your financial plan is ever evolving. While you need to start somewhere, you are likely to get a few things wrong. One of the reasons we created Budget Forward is that we realised that mistakes are made, changes are required and it needs to be easy to make these changes and then look forward without worrying about what occurred in the past.

The key to a plan is knowing what you are working with. In the case of a financial plan, you need a good picture of your current state of affairs. This can be quite a process so don’t be discouraged if you don’t do all this in a single sitting. Building your financial plan is an informative and eye-opening process. The act of putting it together will likely cause you to make changes and it will evolve over time.

Honesty is the key. Be honest with yourself.

A Quick Overview of a Plan

A plan contains everything you need to plan your future finances. In Budget Forward, a plan consists of three main concepts.

Accounts

Accounts are a reflection of your current financial situation. These allow you to track available funds, loans, credit cards and even loan offsets. They also show you estimated interest in the timeline and take cumulative interest into consideration.

Budgets

Budgets map out all of your incoming and outgoing funds. Each budget is a collection of Budget Items which can be one of Income, Expense, Allowance or Transfer. Budgets which have a net positive amount are considered to be Income Budgets which are represnted by the outer green ring while the budgets with a net negative amount are Expense Budgets and represented by the blue inner ring.

While you can set up a plan with as little as two budgets, one for income and one for expenses, we find it's a great idea to split these into broad containers as the example here shows. As you will see later, expenses are also assigned categories which will allow you to group items and further analyse your overall distribution of expenses.

Goals

Goals are for planning things above and beyond your regular budget items. These can be used to create savings, pay off loans or credit cards or even offset a loan.

Steps to Building a Plan

Step 1 - Setting the scene

Step 2 - Building your budget rings

Step 3 - Spending with allowances

Step 4 - Setting your future goals

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Budget Forward is a budget planning app that takes your savings and debts along with your income and expenses and simulates your future financial position. You can also set goals such as repaying or offsetting loans, paying off credit cards and saving for future expenses. Budget Forward will know when you have available funds and allocate them to these goals according to priority.

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