What to do on a day you overspend

Going over your daily allowance happens to everyone, and one day over tells you very little. What matters is what you do over the next few days.

First, log it

It's tempting to leave a bad day out, or to log it "later". Don't. Every purchase you don't record makes the numbers wrong in your favor, so your balance looks healthier than it is and the next overspend comes as more of a surprise.

Log the full amount, on the day it happened, while you still remember what it was.

Measure it in days

An overspend in dollars is hard to judge. Measured in days of allowance, it's easy to picture.

Say your allowance is $40 a day. You started the day with $20 in hand, then spent $130 on a friend's birthday dinner and a late train home:

$20 + $40 − $130 = −$70

$70 ÷ $40 = 1.75. You're less than two days behind. Put that way, it's a short stretch of careful days, and nothing you have to start over from.

Choose how to make it up

Spread it over a week

This is the gentlest option. Spend $30 a day instead of $40 for the next seven days. Each day you gain $10, and after a week you're back to zero:

Ten dollars a day is usually one skipped coffee and a packed lunch. Most people can manage that without feeling deprived.

Have one or two quiet days

If you'd rather get it over with, a day of almost no spending, cooking what's already in the cupboard and walking instead of riding, takes you from −$70 to −$30. A second quiet day puts you $10 ahead.

Be honest with yourself about whether you'll keep it up. A day of strict denial followed by a "reward" is how a $70 problem becomes a $150 one. If quiet days tend to end that way for you, spread it out instead.

Cover it from savings

If the overspend was for something you're glad you did and you have savings set aside, moving money back to cover it is a reasonable choice. Just be clear with yourself that this is spending your savings. If it happens every month, the savings figure in your plan is more than you can actually afford. How to save for a goal a little each day covers setting that figure.

What doesn't work is ignoring it. When unspent money rolls over, so does the shortfall. It stays in your balance until you make it up, whether you look at it or not.

When it wasn't everyday spending

Some overspends are a case of the wrong yardstick. A car repair, a flight home or a replacement laptop isn't day-to-day spending, and measuring it against a $40 day makes it look like a disaster.

For costs like that, step outside the daily allowance. Pay them from savings, or treat them as a bill: split the cost into monthly amounts over the next few months, which lowers your allowance a little each day until it's paid off. A $600 repair spread over six months is about $3.29 a day, and you'll notice that far less than a single −$560 day.

If it keeps happening

One overspend is an event. Four in a week is information. The two usual causes are:

• A missing bill. A yearly subscription, a quarterly water bill or a regular transfer to someone is quietly coming out of your daily money. Check your statements for anything you left out of the plan.
• An allowance that's too small for how you live. If most days run over, more willpower won't fix it. Change the plan: lower a bill, reduce the savings target for now, or accept a smaller allowance with your eyes open and decide what you'll cut.

Look back over the last month and count the days you went over. A handful of scattered red days is normal. A solid run of them means the numbers need changing.

How Daily Allowance handles an overspend

• You see it the same day. Under your Daily Balance, the Daily Allowance bar turns red and shows "Over by" and the amount once today's spending passes your allowance.
• The shortfall carries forward. Your Daily Balance goes negative, and each new day's share of your income and bills is added on top, so it climbs back as you spend less than your allowance. It doesn't reset at the end of the month.
• The forecast shows the way back. The home screen shows where your balance will be tomorrow and the day after, before any new spending.
• Top up from Kitty Bank. When your balance is negative, this button moves exactly the shortfall from your Kitty Bank savings, bringing your balance back to zero.
• Spread over months. With Premium, you can turn a large purchase into monthly payments. The app warns that your daily allowance will be reduced every day until it's paid off.
• Exclude from daily balance. For an entry that shouldn't count against your daily money, such as something paid from a separate account, switch this on and it won't affect your balance or allowance.
• The calendar shows the pattern. In Analytics, a calendar colors each day of the month by whether you stayed under your allowance, so a run of red days is easy to spot.

One bad day out of thirty, recorded honestly and made up over a week, barely changes the month.