"Can I afford to go out for dinner tonight, or will it make my car payment bounce on Tuesday?"
If you live paycheck to paycheck, this is the most stressful question in the world. It's the reason you stand in the checkout line frantically trying to do mental math, trying to remember what day your Netflix subscription renews.
You need to know exactly how much money you can safely spend before payday. Here is how to find that number.
The Mental Math Fails
The biggest mistake people make is looking at their current bank balance and assuming it's all theirs. If you have $400 in checking, and payday is 5 days away, you might feel rich.
But your bank balance is lying to you. It doesn't know about the future.
The "Safe to Spend" Formula
To find out what you can actually spend today, you need to calculate your Safe to Spend number. Grab a piece of paper or open a spreadsheet, and follow these steps:
Step 1: Find Your Floor
Log into your bank and find your current available balance. (e.g., $400)
Step 2: List the Immovable Objects
Look at a calendar. Write down every single fixed bill that will auto-draft from your account before your next paycheck hits.
- Auto Insurance: $120 (hits on the 12th)
- Electric Bill: $80 (hits on the 14th)
Step 3: Hunt the Zombies
Check your credit card and bank statements for subscriptions. What is renewing this week?
- Spotify: $11
- Gym: $40
Step 4: Do the Math
$400 (Balance) - $200 (Bills) - $51 (Subscriptions) = $149
Your Safe to Spend is $149. That is the actual amount of money you have to survive on for groceries, gas, and fun until payday.
The Problem with the Formula
The formula works flawlessly—if you have a perfect memory and a lot of free time. But humans are terrible at tracking $11 subscriptions and remembering that the water bill fluctuates by $20 every month.
When you make a mistake in the formula, you get hit with a $35 overdraft fee.
The Automated Solution
Most overdrafts don't happen because people are irresponsible. They happen because your bank shows what you have, not what you're about to spend, and manual math is prone to errors.
Shelter calculates your Safe-to-Spend automatically. It securely connects to your accounts, finds your bills and subscriptions, and does the math for you in real-time.
Stop stressing in the checkout line. Open Shelter, see exactly what you can spend today, and never worry about bouncing a payment again.
Read More
- Understand the difference between Safe to Spend vs Bank Balance.
- Master your money with our Complete Overdraft Prevention Guide.
Take control of your cash flow
Shelter connects to your bank, forecasts your balance 30 days out, and alerts you before problems happen.