Using scenarios for forecasting

In PocketSmith, a scenario is a set of scheduled budgets that can be assigned to an account. These budgets create a projected cash forecast with daily closing balances.

Every account you manage in PocketSmith has a 'primary scenario' of the same name. This means that every account can have a set of budgets that belong to it, along with its own cash projection. An account's primary scenario begins its forecast from the account's current balance.

As such, you can think of a scenario as the future state of your bank account. You can see an account's future balances by scheduling upcoming budgets and transactions. Seeing potential outcomes allows you to make better financial decisions.

An account can have multiple scenarios

You can add multiple scenarios to an account - alongside the primary scenario - to model sets of potential decisions. 

Some examples you can create scenarios for are:

  • The purchase of a large asset, like a car or a house. This scenario would contain an initial down-payment, followed by a recurring payment.
  • Goals for savings, or paying off debt.
  • A vacation, or a wedding, or house renovations - where a series of expenditures need to be planned over time.

A scenario helps you predict the financial impact of a decision, allowing you to make adjustments ahead of time. If you decide to commit to a plan, the budgets in the scenario help you keep track of your spending.

You can find out more about secondary scenarios at:  How do I use secondary scenarios?

How do scenarios work?

Scenarios are created, moved amongst accounts, and deleted on the Organize Accounts & Scenarios settings page. Once scenarios are assigned to an account, they're visible in the left sidebar of the Calendar by clicking the dot menu next to the account.

Click on a scenario's circle to add its scheduled budgets and balances to the calendar. PocketSmith updates the projected daily balances for an account to include the totals of all active scenarios.

This means that you can see the cumulative effect of active scenarios on the account's future balances.

As such, a scenario containing only expenses will decrease the account's projected balances (contained in the account's primary scenario), and a scenario containing only incomes will increase balances.

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