I just moved our budget into a weekly cadence. It was easier for my wife and I to keep track of smaller amounts. I get paid semi-monthly, however. Depending on the week, it’s likely that I won’t have enough money in Unallocated to cover the auto-fill. What happens then? Does it go negative? Or does it leave some envelopes unfilled?
If it leaves some unfilled, does it recover that shortage at the next auto-fill some how? Or do I have to remember which envelopes were shorted and then catch up manually when the next paycheck hits my account?
Depending on the week, it’s likely that I won’t have enough money in Unallocated to cover the auto-fill. What happens then? Does it go negative? Or does it leave some envelopes unfilled?
If you’re Filling from Unallocated and Unallocated doesn’t have enough to cover the full fill amount, then yes, it will end up negative. All Envelopes will always be filled according to the Fill’s specifications, so they’ll never be “shorted”.
To elaborate a bit Alex’s answer, Goodbudget doesn’t “know” whether you have enough money or not, so if you have $100 in Unallocated and fill $150 to your envelopes, it will SEEM like you can spend from them when in actuality you’re $50 “overdrawn”. It will still follow your Fill instructions regardless of the amount of funds available.
You can work with this by setting up multiple Fills; now that you’re budgeting weekly you might set up different fills for each week to coincide with your bills due. You can also set due dates in your envelopes that will help you know how much you’ve added and how much you still need to add in order to reach the amount you’d planned to spend.
Using the Add and Set functions in the Fill is how you account for “shorted” envelopes. For example, if you instructed your envelopes to Add a set amount of funds, that’s exactly what it will do, so an underfilled envelope will remain underfilled. If instead you use Set, you’ll see that more money than is budgeted will be added to an underfilled category in order to bring it up to the value you’ve assigned.
Example: You’ve budgeted $100 for entertainment and have a Fill instruction to Add $100 each period. You buy concert tickets for $150, leaving you $50 in arrears this cycle. (You’ll have to make this up by spending less in another category). If you don’t change anything else, Goodbudget will Add $100 next cycle, making your available envelope balance just $50.
If instead you have your Fill instructed to Set, then $150 will be added to both come up to the $100 monthly total AND cover the existing shortfall. This may also make you short somewhere else, or have a negative Unallocated amount.
You can even distribute your paychecks directly to envelopes as they come in, rather than using Fills from Unallocated. It’s all up to you!
There’s no rule about keeping Unallocated at $0 if you don’t want to; some people like to account for every dollar while others (me, lol) like to keep money Unallocated for unforeseen situations and as a buffer (I budget fairly loosely overall). Either one is fine and works within Goodbudget, according to your preference. An important note: If you have multiple Fills, be sure that any envelope you want to remain unchanged has an “Add $0” instruction attached!
I hope that helps!
Negative Unallocated is preferable for us, for the time being. We have a buffer that I can pull from when I see that situation develop. The change to Weekly is new, and I’ll be shifting some of our buffer over to Unallocated as time goes on, much the same way that you (Tiffany) mentioned you do with your own budget.
Just to chime in, because there’s a third category of Unallocated use besides the two Tiffany mentioned, and I used to use it exclusively until I learned more Accounting and created my Projected Income account. I may have been the only person to ever use it this way.
Negative Unallocated is not a bad thing and does not mean you are “overdrawn” at all. From my POV, a budget is a plan for future spending that will (for most people) depend (at least partly) on future income. I want to allocate my entire mortgage payment to the mortgage envelope at the start of the month, even though I may not have enough money in my accounts until the end of the month. Same for all my other envelopes. I want to lay out my plan from the start and not have to remember or check how much is left to allocate to every individual envelope mid-month.
When an accounting period started, I would allocate all my funds to goal/savings envelopes until Unallocated was $0. This was my baseline. Then I would do a single large Fill from Unallocated to fill all my monthly envelopes until Unallocated was negative the exact amount of income I was expecting to receive that month (anything above the monthly envelopes was sunk into goal/savings envelopes). As I received income throughout the month, it went directly to Unallocated. I could always see from that negative number how much I still had left to receive by the end of the month.
Obviously there are some caveats with this method. You cannot take an envelope balance for granted. You have to also consider your account balances, especially before large purchases. You may have to schedule bill payments, etc, to coincide with paydays.
I have used this method for probably close to a decade now and never once overdraft an account because I mistook a full envelope for real money that wasn’t there, and in the first several years there was never enough at the start of a month to cover the whole budget. Nowadays instead of doing the initial Fill from Unallocated I prefer to do a single large Fill from New Income into an account named Projected Income. Paydays simply transfer money from Projected to Checking. It all works the same except there’s no negative numbers
