When signing up for Centsible for the first time you'll be prompted to create a budget by giving it a name. My Budget or Best Budget are all perfectly fine names. Once it's created you can click into it. From there the first thing you should notice is a "Getting Started" checklist to help you get from zero to budget.
The goal of this section is simply to help guide you in using the app. It is highly recommended to do them in the order they appear. You can click on the information icon in order to learn more about what you are suppose to do.
Something important to point out is that creating a budget in Centsible at a high level is the same as creating a traditional budget. In traditional budgeting the flow is usually as follows:
- List out your monthly income
- List out your monthly bills and planned expenses - i.e. rent, groceries, gas.
- Track expenses
The main difference between Centsible and traditional budgeting is that instead of listing out your monthly income, you can only use money you currenty have to plan for your budget. Let's go through the "Getting Started" section.
Add Your Main Income Account
To start it's recommended you add your main income account. This is the account where your income generally gets deposited into. You can add savings if you'd like. Feel free to add your credit card if you use it for monthly spending.
To do this you can click on the Accounts tab. Then click the + icon at the top right.
This step is important as it helps visualize where your income goes before all your planning begins. Namely that income all gets added to Available Funds. You can learn more about Accounts here.
Add Three Monthly Fixed Expenses
In this step the expectation is to go through all your monthy expenses and start tracking them in Centsible. Monthly expense examples are (yours will vary), rent/mortgage, cellphone bill, groceries, eating out, and netflix to name a few.
In Centsible you track your expense by assigning them to a category. There are two types of categories in Centsible.
- Category Group
Category groups are used simply to group similar categories together. When adding a category group you scroll to the bottom of the budget list and click Add Group.
Categories represent things you can spend money on. When adding a category you click the plus icon next to the category group. Select Add Category.
Once you have created a category you can now click on it, which will open up options to act on that category. Click on Plan. That opens up a dialog. In the amount field enter the total you expect to pay for that bill or expense. The default Plan Type should be "Funding". Leave that as is.
Thats it. Now you do that for all your other expense. For maximum effect make sure you set a Due Date on categories that have a due date so you can also see the due date on the budget screen.
For a deeper dive on categories, check this out.
Add a Sinking Fund
A sinking fund is simply a fund you create to save for a big ticket item.
We believe sinking funds are necessary to close the gap between monthly expenses and emergencies. In order to have a budget with less suprises you have to account for all of those big ticket items ahead of time. Life is full of these.
- New car
- New phone
- New computer
- Kids extracurriculars
- New washer and dryer
- Home renovation
In order to add a sinking fund you have to go back to the plan dialog. Create or go to a vacation category. Click it, then click on the Plan action. Enter an amount for your category (ex. $2,000). You can again leave the Plan Type on "Funding". The difference from before is you need to select the By Date checkbox. This will make a month picker field appear below. You can now select a month in the future. Pick one and enter the plan.
That's it! We recommend doing this for things that generally happen every 2-5 years, like new cellphone, laptop, clothing. The more you cover the more solid of a budget you'll have.
Fund At Least Three Categories
Assuming you added all your expenses and sinking funds, this next part will be a piece of cake. Click on the Funded column on your categories. A dialog will pop up. This dialog is where you fund your categories with money available in Available Funds. The rule is simple, you can only fund your categories with money in your Available Funds. The goal is to get to zero. Not negative. Not positive. Zero.
Something you'll notice in the funding dialog is under the text field you should be seeing "Underfunded X amount". This is what plans do. Clicking the button will auto set the amount you are underfunded. Maybe you don't have enough money to full fund the category. So you can fund part of it by entering it manually. For sinking funds you will see the same underfunded button with the amount of money you need to save each month to meet your plan end amount.
You Have a Budget!
Congratulations! You have a budget. Don't worry if it isn't perfect. It'll take a few months to get in the motion. At this point all that's left to do is to track your expenses. Manually enter all your transactions as they happen, or input them at the end of the day. For best results input it right after you make the purchase. You can also move money between your categories as things happen. You are in control of your money. Good luck.