An important part of managing your budget is to do a “reality check” against the cash in your bank.

Cash Reserve, Savings and Funds are the three concepts Weekly uses for you to understand how you are performing from a cash perspective and also how much you saved toward your goals.

Here is the definition of each

• Cash Reserve is the lowest forecasted amount of cash in your bank during the next 35 days.
• Funds Balances are how much of your Cash Reserve you have set aside for spending on specific purposes.
• Savings is what is left of your Cash Reserve after subtracting the fund balances..

To sum this up in a math formula 

Cash Reserve – Fund Balances = Savings

Cash Reserve, Funds and Savings balances are visible on the “Money” page in the “Savings & Funds” tab.

Let’s do a deeper dive on each of these concepts.

Cash Reserve

The Cash Reserve is the rolling forecasted cash low point.  You can think about the Cash Reserve as how much cash will be in your bank account after you have paid all your regular expenses and day-to-day expenses.

To calculate the Cash Reserve we start with the positive cash balances of all your connected checking and savings accounts and subtract all credit card debt. Then Weekly forecasts your cash balance over the next 35 days using:

• Daily spending (from your Weekly Spending Limit)
• Regular Income
• Bills
• Fund contributions

It is the same as the Cash Low Point on the Cash Forecast report.  You can see your Cash Forecast by tapping the date pill next to the “Your cash is lowest on…” text. (see screenshot)

Funds

Fund balances are the amount you’ve set aside to cover spending on something specific like a vacation or car maintenance. Your fund balances should be less than your Cash Reserve, otherwise you won’t have enough actual cash.

You can allocate money toward your Funds in one of three ways.

1. Weekly contribution – You can contribute to them automatically every week.  Fund contributions reduce your weekly spending limit.
2. Add an income transaction – You can add an income transaction directly to a fund. You can also add part of your income to a fund by splitting the transaction.
3. Manual balance adjustment – You can also adjust fund balances directly. You can adjust the balance by editing a fund, or adjust multiple balances at once by tapping the three dots and selecting “Adjust Fund Balances”.

Contributing to a fund reduces the amount of money you have for your weekly spending limit. Funds allow you to set aside some of your regular income for a specific purpose. Funds are not tied to your bank account balance but comparing fund balances to your Cash Reserve will ensure you have enough money to spend your fund balances.

Please note: There is nothing stopping you from increasing your Funds balance such that they are greater than your Cash Reserve.  If this happens, then your Savings will be negative and it’s possible to overspend the money in your bank account if you spent all the money in your Funds.  

If you have extra cash in your bank account that is not set aside for a fund purpose, then that is extra money called Savings.

Savings

Savings is cash in your bank that is over and above what you set aside for certain funds.  So for example, if you have a Cash Reserve of $500 and one Fund that has a balance of $300 then the extra $200 is considered Savings.

Savings is calculated by subtracting your Fund balances from your Cash Reserve.

Savings is a good estimate of the amount of cash cushion you have built up.  It can also be thought of as your wealth buffer.

Just like you can contribute to funds, you can also contribute to your savings balance. On the Money page tap on the “Saved per week” button in the header. On this page you can set your weekly savings amount. Increasing your savings amount will decrease your Weekly Spending Limit. You can see below how your savings contribution will affect your Weekly Spending Limit, your Cash Reserve, and your Savings balance. 

You can also increase your savings balance by reducing your fund balances. This means you plan to spend less of your cash reserve on funds.

Conclusion 

Cash Reserve, Funds and Savings are ways to understand how much cash you have and to compare that against your plans for future spending.  

A positive Cash Reserve indicates you have extra cash in your bank.  Funds are how much of that reserve you have set aside for specific purposes and Savings is the wealth you have built over-and-above your goals.

Having an eye on your Cash Reserve is the reward for healthy spending behaviors and a great way to keep track of your financial progress.