At PocketSmith we focus on providing flexibility for your money journey. Flexibility means we don’t shy away from hard problems, and won’t water the product and it’s capabilities down.
Under this backdrop and based on years of experience and user feedback, we’ve rebuilt the budget analysis engine. While most of the changes are under the hood, a raft of user interface and experience improvements have been released alongside this - all of which we discuss in this blog post. But before we get into the changes you’ll see, it’s worthwhile to discuss some background on budget analysis.
Take a quick walkthrough of the user interface changes in this video, or read on for more details!
On paper, budget analysis is a simple task: take what you intended to spend over a time period for a category, and compare it with what you actually spent.
But we believe that money isn’t simple, and rigidity in financial planning means that you’re changing behaviour to fit the software - not changing the software to fit you. Other budgeting software often puts you on rails: a monthly budget, with a monthly review period, and a monthly check-in. We push back against this dogmatic approach.
Firstly, in PocketSmith you can schedule your budgets to occur however often as you’d like: daily, weekly, monthly, annually and any multiple of those within. If you get paid weekly, it rarely makes sense to use a monthly budget for your Groceries.
Secondly, PocketSmith enables you to analyse your budget over any time frame - aggregating all of your budgets into any time period. So although you might budget for your Groceries spend weekly, you can aggregate these into a quarterly analysis to see how you’re tracking for this quarter.
Third, the other key budgeting features that round out the PocketSmith experience. Rolling up subcategories into their parents to see how you’re doing in aggregate over any timeframe - for example, analyse your Household parent category in aggregate by rolling up your Groceries, Home Maintenance and Gardening budgets into it. Then we have rollover, refunds, one-off budget exceptions, multiple currencies, safe balance calculations, interest - it’s a lot to bring together to present a coherent analysis experience.
And while the general concept of rollover budgets have been well-established in other PFM software, our spin on it is uniquely useful. Rollover deficits or surpluses are carried forward in perpetuity, ready to be repaid or consumed when you see fit. It’s not realistic for many people to start every month with a blank-slate budget. Financial planning and management shouldn’t be built around the arbitrary period of months: if you’re grinding to get out of the red you may want to dig in weekly, but if things are going well then a quarterly check-in might be all you need.
Given that our existing budget analysis already supported the previously discussed features reasonably well, why did we make the choice to rebuild budget analysis?
In one word: rollover. As we’ve been receiving feedback over the years and working towards getting this feature out beta, we realised that our budget analysis engine was holding us back from being able to really have the flexibility shine for our users.
But while rollover kicked off the rebuild, the final outcome of this first stage of improvements is far greater than that one feature. There is a lot in store for rollover in PocketSmith, which will be parts two and three of this release.
But for now: budget analysis.
There are a couple of changes which affect all places that you view a budget analysis: the new budget analysis panel, and the budget burndown chart. We’d like to introduce these briefly prior to working through the individual page changes - as you’ll see these two new features everywhere.
Up until now, there have been a few different styles of budget analysis popups that have been used. Though these always contained nearly exactly the same information as one another, they were not unified in presentation or layout, and the language used between the different versions was sometimes different.
These have been unified into a single budget analysis panel now, which always looks and reads the same, while still containing the same data. These are available throughout the application wherever we perform budget analysis: the Calendar, Budget page, Trends page, the Dashboard’s budget widget, and the Income & Expense Report.
The new budget analysis panel, as shown throughout the application.
The information within these has been improved, with clearer headings and consistent sections for Budget, Actual and Rollover. This means that reading the numbers from top-to-bottom is more cohesive now than what it was previously.
Old concepts have been renamed to clarify the impact of rollover and other budget adjustments. The biggest of these is the introduction of “Effective Budget” - this is your original budget, but with rollover taken into account. It is this budgeted number which is then measured against for your actual spending.
Rollover numbers that are included in the panel are also now clearer, with overspending adjustment and surplus adjustment being the two numbers which result in your effective budget, along with surplus carried over, deficit carried over and a final rollover balance.
More numbers are now clickable within the budget analysis panel - particularly rollover numbers - with relevant popups showing how the given number came about. You can click the number for “overspending adjustment” for a single category’s analysis or for a rolled up analysis, and get a breakdown of exactly what categories were overspent within, leading to the reduction that you’re seeing. This makes it far easier to find category overspending hotspots, allowing you to course correct.
At the bottom of the budget analysis panel, there is a new button to show the burndown chart, which will open up a brand new visualisation, which is only possible because of these new methods of budget analysis. This chart will be familiar to anyone who has used burndown charts for project management in the past.
The budget burndown chart shows the total amount of money that you have budgeted over a given period across one or more categories. It then plots your spending in those categories against a straight-line, starting from the total amount budgeted at the start of the period, down to $0 at the end of the period.
Budget burndown chart, for a rolled-up category. Displays your actual spending versus ideal straight-line spending over the analysis period.
Using this chart, you can track how closely you’re sticking to your budget, over any budget analysis period. It highlights any points that you’re drifting significantly below the ideal trend line for inconsistent spending. This let’s you quickly pinpoint the time that you started slipping in terms of overspending easily.
The rubber hits the road on the main Budget page, where there are a great number of user interface improvements. It’s easier to get between key pieces of information about your budgets, and consistency is improved for displaying granular analysis.
Budget analysis had also not been granular enough to allow us to correctly apportion the rollover balance on the budget page. This meant that the effect of rollover surpluses and deficit were often overstated or understated, influencing your total budget analysis more than what they should have.
If you want an example of this change, you can find it in this footnote.
The user interface of the main Budget page has changed fairly significantly, firstly with a better presentation of crucial elements across the page, with better font choices and heirarchy of information.
This also means that roll-up budgets now take into account rollover as well, meaning that the bars that you see for your current budgets on the main Budget page will match those displayed on the Trends page.
The budget analysis detail panel that is available on other pages is also available when clicking on any rows on the Budget page now, including both individual category analyses, and the total budget summary at the top of the page.
Original budget page, without rollover being represented within each row.
New budget page, with rollover shown in each row when relevant, and a better heirarchy of information.
The Trends page has benefited from the same budget analysis changes as the Budget page, but with more depth on a per-category level. This means you’ll see a more consistent through-line can be drawn between the Budget page, the Trends page, and the Income & Expense Report.
The chart interface itself has received a raft of improvements. When you end up with a negative budget in a category due to overspending or large refunds, the chart can now display negative numbers. In the past, we used to clamp the low point of the graph to $0 - but now, it’s easier to visualise the impact of overspending more easily.
Just like the Budget page, rollover now works when analysis is rolled up - either into a parent category, or when viewing all categories from the main Trends page. Being able to sum up all rollover surplus and deficit across any number of categories greatly enhances the way that this feature can be used.
Viewing the detailed budget analysis of each bar has significantly changed, making it far easier to dig into the numbers that relate to an individual bar. Now instead of a popup appearing when you hover over each bar, the new Budget Analysis Panel always appears on the right, and clicking on a given bar will lock the panel in place on the right, so that it’s easier to view and inspect those numbers without having to hold your mouse in one place.
The error messages that used to take up a lot of space have been improved and are now more subtle, as these are informational warnings that don’t need to be as highlighted as they were.
The old trends page, with large warnings, a wandering rollover line, and the low point being clamped to $0.
New trends page, with subtle warnings, a subtle rollover indicator in the background, and displaying full negative values.
A big change to the Trends charts is that rollover trend information is now presented directly on each chart, as a purple area chart that appears behind the main trends chart. This tracks the movement of your rollover surplus or deficit over time, on a daily basis. As you spend money each day, the amount of rollover surplus or deficit in the selected categories is calculated and represented by this area.
In its default mode, the area chart is smoothed out and placed behind the trends bars. However you can also turn on highlight rollover using the toggle in the sidebar. This brings the rollover data in front of the trends bars, makes the colours much darker and features daily granularity for the data that it’s showing.
You can then pinpoint exactly when over an analysis period that your rollover surplus or deficit changed significantly. Once identified, you can click the chart to lock the budget analysis panel on the right, so you can see the exact transactions that caused the change in your rollover amount.
If you roll up your budgets to view a combined Trends chart for a parent category or view the main trends page, and have a rollover surplus in some categories but a deficit in others, you’ll see two distinct rollover area charts - one above the line and one below the line.
Like much of rollover, this visualisation works best for budgets that have irregular spending (like Groceries), and not as well for categories that have regular spending patterns, such as bill categories.
Rolled up Food category budget analysis, showing the smooth rollover area chart in the background.
Rolled up Food category budget analysis, with 'highlight rollover' activated. There is an area chart for rollover surplus, as well as deficit.
The changes above have also been integrated into the Income & Expense Report, making the numbers shown within this report consistent with those shown elsewhere in PocketSmith. Rollover is applied to this report exactly the same as it is on the main Budget page.
Rollover now has its own dedicated column in the Income and Expense Report, which shows either the overspending adjustment on your budget for the period, or the rollover surplus used for that budget. Using the difference includes rollover toggle in the sidebar, you’re able to change whether or not this rollover column is used in calculating the difference between your budgeted and actual spending for the period.
Each row has an icon on the right to show the budget analysis panel, giving you the same breakdown that you see elsewhere and the ability to open the budget burndown chart as well.
Income & Expense Report with the old budget analysis, without rollover column.
New Income & Expense Report, with a rollover column and access to the budget analysis panel.
This is the third attempt in deploying this set of changes, due to issues with the deeper functionality we have planned for this area. For this reason, and to help our users transition to the new way budget analysis is presented, we’re delaying the deeper changes that we have planned - which we’ll discuss below.
We believe that the effect of a rollover surplus and deficit on your total budgeted amount is too blunt. Currently, the total surplus accumulated is always included - leading to a total budgeted amount that doesn’t reflect reality. Just because you have a rollover surplus in a particular category, doesn’t mean you intend to spend it all during the current budget period.
This shortcoming led to the “Including rollover” checkbox at the top of the Budget page, to include or exclude rollover in the total budget summary. While this solves the immediate issue, it’s still a stopgap until we solve the problem completely.
This checkbox can be removed once the effect that rollover has on your total budget is reworked, allowing you to control how rollover surpluses affects your total budget and refining the influence of any rollover deficits.
Once we solve this, you’ll be able to better control how individual budget rollover influence total budget. It will more closely reflect the numbers you need to keep an eye on to hit your future financial goals.
At the moment, refunds only influence the total amount you’ve spent against your current budget - the actual transaction side of things. Refunded money will only change how much PocketSmith sees that you’ve spent within a given period; if you have budgeted $100, and spent $100 - but were refunded $30, then the analysis will show you have just spent $70 of your $100 budget.
We want to change this so that refunds change your Effective Budget for a period, as this’ll allow refunds to expand your budget without flagging it as overspending. In the above example, your $100 budget would become a $130 budget - so you’d still have $30 remaining, but that’s because the refund increased the Effective Budget you have available in the category, not just because it offset other spending.
This is the next phase of budget analysis and flexibility in PocketSmith. It gets our rollover budgeting feature far closer to exiting beta phase - and more good things are to come. As mentioned earlier, if you’ve tried rollover before and decided it wasn’t for you, please give it another look.
And with that: may your budget analysis prove to be both insightful and fruitful!
James is the CTO and co-founder at PocketSmith. He loves tech from software to hardware to music, and is passionate about technology being a net-positive in people’s lives. He lives off-grid with three humans, one axolotl, one dog, and too many possums.
This footnote is for people who’re interested in some deeper information about how rollover has changed within the Total Budget Analysis section at the top of the Budget page. The best way to explain this change is through a simplfied example. So assuming a budget setup that looks like this:
Then, say that:
This is only a simplified example, as other factors come into play - such as how a budget is distributed over all days within it’s period to allow correct analysis. However despite the simplification, this example illustrates how rollover handling has changed when producing your total budget analysis.
