I have another question that I think I managed to figure out somehow last month but wanted to check exactly what the best way to do it is.
I received my salary from work for the month and have now filled my envelopes accordingly.
I have some envelopes with a budgeted amount that I save every month to use to pay for annual expenses when they arise. I have filled these envelopes with the appropriate monthly amount to arrive at my desired annual amount. This money will not sit in my current account, however, I have a standing order set up to transfer that monthly amount into a savings account. What is the best way to record that step? Should I simply amend the account balances or is a transaction doing a transfer between accounts a better idea?
Similarly, my bank offers a rounding up savings option so that every time I use my debit card to pay for something, the transaction is rounded up to the nearest euro and that amount is transferred into savings. I can take care of one side of this transaction by simply recording a transaction paid from, for example, my groceries envelope for 52c with the payee showing as “rounding up savings”. But what is the best way to record the other side of this transaction, where it is added to my savings account?
Did you set up separate, Annual envelopes for those expenses? That tends to be the easiest way for me, and whether the money “lives” in a checking or savings account won’t affect the envelopes. I prefer to record Transfers between Accounts because it’s much easier to reconcile them with my statements, but you could also allocate the income partially to checking and partially to savings when you receive it. Either way will be accurate in your Goodbudget totals, but I don’t recommend adjusting the balances unless there’s a true error. That can get very messy and make it extremely tough to reconcile.
For the rounding up, I wouldn’t use an Expense but rather a Transfer. Instead of the “52c paid to Rounding Up”, do a Transfer from checking to savings for the 52c and both accounts will be corrected with one input.
Hope that helps!
I did set up separate annual envelopes for those expenses. Was just wondering how to match up the account side.
So if I have understood correctly, here’s an example from today:
- (At bank) income received and (in GB) envelope “annual expenses” filled with the monthly amount of 150.
- (At bank) on 1 January, 150 will automatically transfer by standing order from my current account to my savings account.
- (In GB) on 1 January I can do an account transfer of 150 so that the account balances match what is actually in the accounts. Envelope is not affected.
That looks right! You can automate this in Goodbudget too; you can set up a monthly, recurring transfer from one account to another on 1 January/Feb/March etc. to reflect the transfer at your bank, and you can set up a recurring Fill to put money into the envelope. Your Envelope Fills can either be from New Income if you’re allocating a deposit right away, or from Unallocated if you just add unspecified deposits and then dole them out later.
But yes, the process you described will do exactly what you want, and the Envelope will not be affected by the account transfers.