How a Safe-to-Spend Planning Calculation Works
A Safe-to-Spend calculation is useful only when its inputs and limitations are clear.
Start with a balance or available amount
A planning calculation can begin with the balance or funds you choose to enter. The number is an input, not a bank-authorised spending limit.
Subtract recorded commitments
Relevant bills, recurring costs and other commitments can reduce the amount you consider available for discretionary spending.
Consider planned spending
A planned purchase or allocation can also be included when testing a scenario. This helps show how a decision may affect the planning amount.
Understand the limitation
The calculation is only as complete as the information entered. It may not include transactions, obligations or changes that you have not recorded.
If you enter a balance of 4,000, commitments of 1,800 and planned spending of 500, the basic calculation is 4,000 − 1,800 − 500 = 1,700.