What is the purpose of Payday Powerup?

Martin Tanner, 15th April 2023

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For many people, payday is the best time of the month. We switch instantly from a situation where every small purchase is made in hope that the payment will be successful, checking our bank account and calculating available funds, to suddenly having an influx of funds for us to spend. Many people will harness this opportunity to go out and treat themselves. A new top, a phone upgrade, a nice restaurant, a deposit for a holiday. All of these things are great - but there is always an underlying question of whether we can really afford them.

The trouble is, our bolstered bank balance gives us an artificial view of how well off we are. We all know that we need to keep money back for our monthly outgoings. Rent, the electric bill, the credit card repayment, food shopping etc all come around with an alarming regularity and many people are able to calculate their disposable income once these outgoings are subtracted. The trouble is, there are also payments that come out less regularly which trip us up. Maybe an annual car insurance bill, the costs of Christmas, a payment to upgrade the car every few years, saving up for a deposit for a house. If you’re self employed then you also have considerations around your tax and other statutory payment. All of these also to be considered. And what if you are lucky enough to receive a bonus? Should you spend it in one go, or spread out the benefits throughout the year? Calculating your monthly finances really isn’t as easy as it seems at first glance.

For many people, payday is the best time of the month. We switch instantly from a situation where every small purchase is made in hope that the payment will be successful, checking our bank account and calculating available funds, to suddenly having an influx of funds for us to spend.

The Payday Powerup feature in iBudge (iBudge.com) has been designed to address this challenge. It’s a simple process that should be run every time you get paid - and it automatically works out exactly how you need to apportion your money. Have multiple bank accounts? No worries, the tool will make sure you transfer the right amounts between accounts. The feature has been designed to be quick and intuitive - with five steps in total:

  1. A reminder that you need to update your savings pots if you have spent any money from them since you last updated the app
  2. A step to capture any income that you have received since last payday. The app automatically calculates the amount you should have received, but you can easily make adjustments if you have been paid more or less than expected. You can also add one-off income categories if needed.
  3. A step to provide the balance(s) of your bank account(s). These should be updated based on the balance just before you got paid (i.e. their lowest point typically). This step also offers a chance to update the balance of any credit cards and loans.
  4. A step to provide any deferred transactions (e.g. refunds or expenses that are due, or debit card payments you have made that aren't yet showing).
  5. A final stage, where your balance for the month is calculated - and where decisions are made about how you will apportion any surplus or deficit.

Once you have completed all five stages, the app will automatically update your savings pots and various other calculations within the platform. It will also give a clear breakdown of the bank transfers that you need to make in order to ensure that the right money is in the right place to handle your upcoming bills and payments - as well as the day-to-day spending that you have allowed in your budget.

Options for apportioning your money in Payday Powerup

If you have a surplus or deficit then a number of options are available.

Firstly, you can choose to carry it across (or a portion of the amount) to the next payday. This is an ideal option if you know that the amount will be corrected next month (perhaps you were underpaid but the payment will be made in your next salary). If you choose this option then you can select whether you want the surplus or deficit to be applied to a particular bank account (e.g. maximise the opportunity to earn interest in your savings account) or simply to use the default distribution settings.

Secondly, you are able to allocate it to a savings pot or multiple savings pots. The easiest way to do this is by selecting the option to share the amount proportionally across all pots. iBudge will then calculate the correct amount for each pot based on the relative amount you have set up in your income and expenditure settings. Alternatively, you can choose to add or deduct a defined amount from a single pot or multiple pots.

Your third option is to increase or decrease the target balance of a particular bank account. This is a great option if you are trying to pay off an overdraft and have a surplus in your pay for this month. However, it also provides a useful option to accept that a target balance may be lower (or the overdraft may be extended) in the result of a deficit.

As a fourth option, you can choose to apply the surplus or deficit against a credit card or loan. Hopefully, this will be as the result of a surplus in your Payday Powerup process - in which case you can use the additional money to pay back against the credit card or loan. However, life happens - and you may well be in a position where you need to extend a credit card or loan balance to address the deficit. In which case, the Powerup feature lets you easily track this activity and calculate the resulting impact.

Our users tell us that the Payday Powerup feature is the single most transformational item in the way that they manage their money. We are genuinely excited by the opportunity that it offers you to revolutionise the way that you hanle your finances - and to see for yourself how it truly makes your money go further.

Fifthly, you may choose to either buy or sell shares based on the surplus or deficit that you have. In most cases, this will be the result of a significant surplus or deficit, but the app is happy to apply the changes regardless of the value involved. You can easily set up a new stock or share in the app if you don't already have one registered so that changes can be made without leaving the Payday Powerup process.

The final option is only available if you have a surplus. This is the Bonus LevelUp feature and enables you to spread the benefits of the surplus across multiple months. Put simply, it applies the surplus to a dedicated pot (linked to one of your chosen bank accounts) and then releases a proportional amount into your day-to-day expenditure allowance each month. This means that the benefits of the bonus can, in effect, be applied as an additional item of income for a set period of time (adjustable when you select this option).

Our users tell us that the Payday Powerup feature is the single most transformational item in the way that they manage their money. It is especially helpful for users who have more than one bank account - but it provides every user with a remarkably easy and intuitive platform to calculate a vast array of savings pots and other items (credit cards, loans, shares, mortgages etc) vs. spending money. We are genuinely excited by the opportunity that it offers you to revolutionise the way that you hanle your finances - and to see for yourself how it truly makes your money go further.