What to do with surplus money each month, decided once

Once your pay has landed and the bills have gone out, whatever is left is spare. The waterfall is where you say, in advance, what should happen to it: top up the ISA first, then overpay the card, then let the rest build up in savings, or whatever order suits you. It runs every month of the forecast without being asked, alongside the rest of what CrestCast forecasts.

Three stages run every month, always in the same order. The diagram below is a picture of how the rules run, not a screenshot of the app.

Each waterfall step can point at a savings or investment pot, at a pension, at a debt as an overpayment, at another cash account, or at day-to-day spending. Each step can carry a limit: an annual allowance bucketed on the UK tax year, a target balance to stop at, or a fixed amount a month or a year.

On an ISA step the allowance is filled in for you, and it is the right one: £4,000 for a Lifetime ISA, £9,000 for a Junior ISA, £20,000 for an ordinary one. A cash ISA follows the published schedule rather than one flat figure, so a forecast that runs past 6 April 2027 already steps down to £12,000 for under-65s, while anyone aged 65 or over keeps the full £20,000. You can still type your own number over any of it.

One step, in the app

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Figures shown are the sample profile, not a real household.

This is the one thing to understand before you decide the order, and it is the difference between two steps that look identical on the screen.

When a month comes up short, the forecast refills your current account from savings pots, and nothing else. So a pound swept into an ISA or an easy access account is still available to you: the November boiler pulls it straight back out, in the order you set. A pound sent anywhere else has left the rule for good. An overpayment on a mortgage, a loan or a credit card cannot be un-paid. Neither can a pension contribution, and the forecast will not reach into another cash account or claw back money you routed to day-to-day spending either.

None of that means the money is lost. An overpayment buys you a shorter mortgage and less interest, which is usually the point of making it. It means the waterfall has no way to fund a bad month out of it, so a waterfall whose only step is the credit card leaves the account with nothing to fall back on. Put a pot somewhere in the order as well, or keep the minimum high enough to absorb the month you have not thought of yet. CrestCast says this on the screen, above the steps, rather than leaving you to discover it in a forecast.

One qualifier, because it decides real cases: a savings pot only counts as reachable if you have marked it instant access. A fixed-term bond, a lifetime ISA or a notice account you have not given notice on can still be swept into, and is deliberately left out of the drawdown, because paying in and taking out are two different questions.

The rule is called Spare cash waterfall and it appears in two places: inside the Cash balance card on the input screen, and in Settings. The Cash balance card is collapsed by default, so on the input screen it is one tap in rather than sitting out on the landing. Wherever you meet it, the card does not just carry a label: it reads back the rule you have actually saved, in the order your own money goes in.

Each account keeps its own waterfall, so the rules you write on the joint account fill the joint pots and pay down the joint debts, and a personal account keeps a separate set. Combined only adds the accounts up, so it has no waterfall of its own. Where a profile has more than one account, pills at the top of the screen say which one you are editing. That matters more than it sounds: if your savings and much of your debt are joint, a rule written against your personal account has nothing to act on.

Where it lives, and what it says when you get there

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Figures shown are the sample profile, not a real household.

It is opt-in, and switching it off is a genuine no-op. With the waterfall off, the forecast behaves exactly as it did before the feature existed.

The interesting part of a savings rule is not the good months. It is what happens when the money is not there, and this is where most homemade versions fall over.

• Short months do not depend on data entry order. When contributions have to be trimmed, they are trimmed proportionally across every pot. A spreadsheet that pays pots top to bottom gives a different answer depending on which row you happened to type first.
• A skipped contribution stays skipped. It is not silently doubled up next month, which would flatter the forecast and tell you the year was fine when it was not.
• Allowances reset in April, not in January. A step with an annual allowance buckets against the UK tax year, so a rule set in February gets its full allowance back two months later rather than eleven.
• A pot that reaches its target stops taking money. The overflow continues down the waterfall to the next step instead of stopping there.
• A pot you cannot actually reach is not raided. Each savings or investment pot is marked instant access or locked away, a fixed term or a notice you have not given, and a locked one is left out of the drawdown and out of the liquid savings view on the cashflow chart. It can still be swept into, because paying in and taking out are two different questions and a lifetime ISA is the case that proves it. Pots you have said nothing about stay reachable, so nothing changes until you say it has.

Say the household takes home £5,400 a month and the bills, the mortgage and everything else come to £4,300. The minimum is set at £1,500 and the current account target balance at £2,500. The waterfall is three steps: the stocks and shares ISA up to a £20,000 annual allowance, then the credit card as an overpayment, then the easy access savings account up to a £15,000 target.

In a normal month, roughly £1,100 accumulates. Once the current account climbs past £2,500, the excess starts going to the ISA. Say the card is sitting at £4,200 on a rate that hurts, and you reorder the waterfall to put the card first: the sweep now lands on the card each month, the balance falls, the interest charged next month falls with it, and the month after that there is slightly more surplus to sweep. That feedback is the whole point.

Then a £2,900 boiler replacement lands in November. Contributions that month are trimmed back to the buffer, cash still ends short, and drawdown pulls the shortfall out of the easy access pot rather than the ISA, because that is the order you set. December carries on as normal. The forecast shows you all of that before you decide whether the rule is one you want.

A routed overpayment is not a cosmetic transfer between two boxes. Mortgages and loans are genuinely re-amortised with the routed money, so the balance, the interest and the payoff date all move. Credit cards take the routed amount as extra payments on top of the scheduled one.

Student loans are deliberately left out of the overpayment options. UK student loan repayment is income-contingent: you repay a percentage of income above a threshold until the balance clears or the loan is written off, so throwing spare cash at it does not reduce what you pay each month, and for many borrowers it never comes back at all. Excluding it from a surplus waterfall is the correct default.

Because the waterfall is computed inside the forecast itself rather than bolted on afterwards, the cashflow, profit and loss and net worth views all reflect it. And the rule shows its own arithmetic: on the input screen the waterfall prints what it moved, with a line per pot and a line per debt, named, so you can see which rule sent which pound where rather than inferring it from a balance that went up.

A blank waterfall is a chore to fill in, so there are five one-tap presets. They are not generic templates: each one is assembled from the actual accounts, pots and debts already in your profile.

• UK Personal Finance flowchart. The eight-step order from the UK personal finance flowchart, built out of your own pots and debts. Anything above 10% APR goes to the top, priciest first; the minimum held back is one month of your outgoings, read off your forecast; the emergency fund fills to three months of it; then the Lifetime ISA, the ISA, the pension, and the mortgage last. It also lists all eight steps with a verdict on each before you apply it, including the two it does not do.
• Safety first. A £2,000 minimum held back, then everything above it goes to savings.
• Max ISA. A £1,000 minimum, then the ISA filled to its allowance, with the overflow running on into ordinary savings.
• Clear debt first. A £1,000 minimum, then the surplus at your credit cards, priciest first, with any loans beneath them.
• Balanced. A £1,000 minimum, then the same ISA-then-savings order as Max ISA rather than a split between saving and debt.

The strategy list

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Figures shown are the sample profile, not a real household.

A preset is a starting point that you then edit. Reordering the steps, changing a limit or removing a step entirely takes seconds, and the forecast redraws against the new order.

Plenty of what CrestCast does could be reproduced in a spreadsheet by someone patient. This one genuinely fights back, because it is a forward pass with feedback. Each month's sweep changes the debt balance. The changed balance changes next month's interest. The changed interest changes next month's surplus. The changed surplus changes the next sweep.

You can build that. It takes either a circular reference with iterative calculation switched on, or a full month-by-month grid where each row rebuilds the amortisation from the previous row. Both work, and both break the first time you insert a row, add a fourth waterfall step, or copy the sheet to try a different order. Then you are debugging a formula chain instead of answering the question you sat down with.

There is a second thing a spreadsheet will not do, and it matters more than the feedback loop. It has no view about what you would do when the money runs short, so it will happily project a current account sinking further into the red every month for a decade while a savings account sits untouched beside it. One household, run twice with the waterfall off and on shows what that difference is worth, and what the held balance costs.

The question was never hard. It was, if I put the spare £600 at the card instead of the ISA, where am I in three years. See also overpay the mortgage or invest, which is the same shape of question with a longer time horizon.

• It is not a snowball or avalanche engine. The Clear debt first preset sorts your credit cards by rate. It does not rate-sort loans and it leaves mortgages out entirely. CrestCast has neither strategy as a feature. For the ordering itself, the debt payoff planner page is the better read.
• It caps each step, and it does not add them up. The waterfall will not route more into a pot than its annual allowance takes, and it knows the ISA limits by pot type and by tax year. A contribution you set straight on a pot is checked too: a Junior or Lifetime ISA over its cap will not save. What nothing does is total two separate subscriptions against one allowance and tell you the pair would over-subscribe it.