Safe-to-spend

What It Means

Safe-to-spend is the money you can use for everyday spending until your next payday, once the bills, subscriptions, card payments and savings already planned for that stretch are set aside. BudgetingBudgetA plan for a set period, usually a month, that lists the money you expect to receive and how you'll spend or save it. See more apps show it as a single number that changes as bills are paid and money comes in. Rocket Money's and Quicken's pages describe their versions the same basic way: income, minus upcoming bills and recurring subscriptions, card payments, planned spending and savings goalsFinancial goalsSpecific targets for your money, such as an emergency fund, paying off a card or a down payment, each with an amount and a date. See more.

How It Sounds at Home

• "The app says I've got $80 safe to spend till Friday."
• "Rent's already out of that number, right?"
• "It's payday Thursday, so I'm working with what's safe to spend until then."

The Breakdown

Formula

Safe to spend = money you can use now + pay arriving before payday − bills due − subscriptions renewing − card payments due − savings you plan to move.

Worked example. Alex gets paid in 9 days (made-up numbers):

$535 ÷ 9 days is about $59 a day for groceries, gas and everything else until payday.

What the result means. A positive number is your spending money until the next paycheck. A negative one means the bills due before payday are bigger than the money you'll have, which is worth fixing before the bills land rather than after.

Where the number goes wrong. The result is only as good as the list behind it. A yearly renewal you forgot, a bill paid from a different account, or a deposit that hasn't cleared yet can make it look bigger than it really is, so add anything an app can't see.

Good to Know

The Consumer Financial Protection Bureau's Your Money, Your Goals cash flowCash flowThe money coming in and going out over a period; positive cash flow means more came in than went out, and negative means the reverse. See more budget does the same arithmetic on paper, week by week. It starts from what you have at the beginning (cash on hand, prepaid cards, checking and savings) and lays your income and bills out on a calendar, so a short week shows up ahead of time. When bills bunch up, the CFPB suggests adjusting your spending, calling creditors about changing due dates, or splitting a large periodic bill into smaller, more frequent payments.

Related Terms and Categories

• Available balance

  The money in a bank account you can use right now: the posted balance minus pending card purchases and any deposit the bank is still holding.

• Account balance

  The money in a bank account once posted deposits and payments are counted, also called the ledger balance; pending card purchases aren't subtracted yet.

• Paycheck to paycheck

  Spending all of one paycheck before the next arrives, so there's little or nothing left over in between.

• Daily spending limit

  The most a bank lets you spend with a debit card, or withdraw at an ATM, in one day; the purchase and ATM limits are often set separately.

• Paycheck budgeting

  Planning money one paycheck at a time, so each bill is paid from the paycheck that arrives before it's due and the rest is spending money.

Household money and budgeting