Quick answer:

When you set up SpendPal, you give each Category a monthly allowance. You also put your Categories in order of priority.  Whenever a new deposit comes into your bank account, your Categories are automatically filled in order, starting from the Category on top (highest priority) all the way down to the Category on the bottom (lowest priority).   

You can change the priority order of your Categories at any time. You can review how much was allocated to each Category from each deposit and make any changes to how that deposit gets distributed. You can also move money back and forth between Categories as often as you like. 

SpendPal is designed to give you complete control of how your money is allocated but also give you peace of mind knowing, that by default, when you do nothing, SpendPal will automatically divide up your money into your Categories according to the plan you set up in the beginning, making sure the most important Categories are filled first. 

More in depth answer:

Below is the nitty gritty explanation of how the fill priority logic works. When a new deposit comes in, the software automatically finds the highest priority Category that has not yet received it’s full monthly allowance for the current period and it follows a fill logic (detailed below) to determine how much money to allocate to that Category before moving on to the the next Category in the priority list. It continues to fill your Categories until you run out of money or all the Categories have been filled for the month. If you still have money left over after filling all your Categories (good problem to have) then the leftover money is placed in a special “Unallocated Income” category. You can manually allocate this money or choose one of the rules of what you want to automatically happen to unallocated money. For example: You may decide to have unallocated money go to a specific goal you’re saving for or maybe you want it to go into reserves for an emergency or loss of income.

Explanation of Table

  1. We add up how much money has already been deposited to the Category during the current period from either past deposits OR money that has been manually transferred into the Category from another Category. This gives you the “Total Deposits” to the Category for the period.
  2. We add up the total amount that has been manually transferred out of the Category (to other Categories) and the total amount that has been stolen from the Category if it was used as a Backup Category to help complete a purchase from another Category. This gives us the “Total Transfers Out.” Note: Transactions (money spent) directly from the Category are not included in the “Total Transfers Out.” Only money taken out of a Category to be spent in a different Category are considered part of “Total Transfers Out.” 
  3. We then subtract the “Total Transfers Out” from the “Total Deposits” for the period. This gives us the “Net Deposits” If the “Net Deposits” is less than $0, we consider the “Net Deposits” to be $0 for the period. If the “Net Deposits” is greater than the “Monthly Allowance” for the Category then we consider the “Net Deposits” to be the same as the “Monthly Allowance.” 
  4. We subtract the “Net Deposits” from the “Monthly Allowance.” This gives us the “Amount To Deposit.” If the “Amount To Deposit” less than $0, then we consider the “Amount To Deposit” to be $0. 

Explanation of Table

When filling Discretionary Categories we do not include Transfers Out in deciding how much to fill the Category. Because Essential Categories are things you have to cover, you actually can’t steal money from them, you can only temporarily borrow money. Any money you transfer out will be replaced next time a paycheck comes in. But when you steal from a Discretionary Category it will not get refilled again until the next period when it’s supposed to get money again. The fill logic for Discretionary Categories is below. 

  1. We add up how much money has already been deposited to the Category during the current period from either past deposits OR money that has been manually transferred into the Category from another Category. This gives you the “Total Deposits” to the Category for the period. 
  2. We subtract the “Total Deposits” from the “Monthly Allowance.” This gives us the “Amount To Deposit.” If the “Amount To Deposit” less than $0, then we consider the “Amount To Deposit” to be $0. 

Example #1

  • My monthly allowance for Groceries (Essential) is $600. 
  • My last paycheck for the month completely filled all my higher priority Categories and had enough left to partially fill my Grocery Category $300. 
  • My electric bill was a little higher than expected so I transferred $25 from Groceries to Utilities to cover the bill
  • I also had a $200 car repair. I only had $175 in my Car Repair Category so I used My Grocery Category as a Backup Category. The software automatically took $25 from my Grocery Category to complete the Car Repair transaction. 
  • I just got another check for $600.

Because my other higher priority Categories have already been fully filled for the month the software skips over them and sees that my Grocery Category is the highest priority Category that has not been fully filled, It runs through the fill logic to figure out how much it needs to fill Groceries before moving on to fill the Category below Groceries in the Priority List. 

Total Deposits = $300

Total Transfers Out = $50 ($25 to cover utility bill and $25 to cover car repair)

Net Deposits = $250 ($300 Total Deposits - $50 Total Transfers Out)

Amount To Deposit = $350 ($600 Monthly Allowance - $250 Net Deposits)

The software allocates $350 to the Grocery Category and leaves $250 left over (from the $600 Deposit) to start filling the Category directly below Groceries in the priority list.  

Example #2

  • My Monthly Allowance for my Mortgage Category (Essential) is $1000. 
  • My last paycheck was $1,200. Since my Mortgage is my highest priority, the Mortgage Category was completely filled and the remaining $200 from the paycheck went to fill lower priority Categories. 
  • My $1,000 Mortgage payment came out a few days later which brought the balance in my Mortgage Category down to $0. 
  • A few days later my next paycheck for $1,200 comes in.

Total Deposits = $1,000

Total Transfers Out = $0 (The mortgage payment is a transaction, not a transfer out.)

Net Deposits = $1,000 ($1,000 Total Deposits - $0 Total Transfers Out)

Amount To Deposit = $0 ($1,000 Monthly Allowance - $1,000 Net Deposits)

Because transactions directly from the Category are not part of the “Total Transfers Out” they do not affect how much the Category gets filled. If transactions (money spent from the Category) were considered part of “Total Transfers Out” then as soon as the mortgage payment was made, the software would think it needs to fill the Mortgage Category for a second time in the same month.  

Still have questions about the fill logic. Reach out to us at <email address> and we’ll answer any additional questions you have. 

Example #3

  • My monthly allowance for Entertainment (Discretionary) is $200. 
  • My last paycheck for the month completely filled all my higher priority Categories and had enough left to fill my Entertainment Category the full $200. 
  • My electric bill was a little higher than expected so I transferred $25 from Entertainment to Utilities to cover the bill
  • I also had a $200 car repair. I only had $175 in my Car Repair Category so I used My Entertainment Category as a Backup Category. The software automatically took $25 from my Entertainment Category to complete the Car Repair transaction. 
  • I just got another check for $600.

Because my other higher priority Categories have already been fully filled for the month the software skips over them and gets to my Entertainment Category. It runs through the fill logic to figure out how much it needs to fill Entertainment before moving on to fill the Category below Entertainment in the Priority List. 

Total Deposits = $200

Amount To Deposit = $0 ($200 Monthly Allowance - $200 Total Deposits)

Because Transfers Out are not considered when deciding how much to fill Discretionary Categories, the software skips the Entertainment Category leaving the full $600 in the deposit to start filling the Category directly below Entertainment in the priority list.  

Did this answer your question?