I have started using GB from 1st July and liking what I see so far. It seems to be the only app I have come across that will not just replace but actually improve on what we have been doing in Google Sheets for the last 13 years.
However we have a fairly large balance in the Available/Unallocated “envelope” which I am sure is not truly representative of our current financial situation. I have read https://goodbudget.com/help/budgeting-with-goodbudget/why-is-my-available-balance/ and Two questions, if I may be so bold to understand this better. From these it seems that this is probably down to one or both of the following reasons:
- We have overspent on several envelopes this month (and last) and I have deliberately carried forward these negative balance. The easy “fix” for this would be to transfer money from Available but I am concerned that this would give us a false impression that we have actually been on budget with these envelopes and leave us short for the next envelope fill.
- I am paid my salary towards the end of each month (the last Thursday before the last Sunday - don’t ask!) whereas we want to budget on a calendar month basis. I have therefore set the envelopes to fill on the first of each month. As I have already received my salary but it is not yet the first of the next month is this just a side-effect I have to live with? ie between receiving my salary and filling the envelopes it will look like we have more money than we probably really do?To get a true picture of our current status should I minus the scheduled fill on the first of next month from the current Available balance? This seems to be making me do manual work that somewhat defeats the purpose of this app. That’s not a criticism of the system but more a statement of my current predicament btw.
Hope that all makes sense. In summary I guess I am asking should I…
a) Fill my negative envelope balances from Available?
b) Change the budgeting method or period in some way?
c) Just live with it?! and accept that Available won’t always be accurate?
One of the beauties of Goodbudget is that you can make it your own. By that I mean there are several ways you CAN handle this; you’ll want to choose the one that feels best to you!
By design, the money in your Available envelope isn’t really meant to be part of your spending budget but rather a holding place for money you could use if you wanted to. As you’ve pointed out though, it also needs to hold enough (ideally) for the following period’s Fill.That means your salary will go into Available and be there for the following month. If that’s too hard to manage, you may want your salary to go into an envelope of its own in preparation for the next month’s fill, thus keeping the Available money as “available to spend” vs. its intended purpose of “not yet placed into envelopes”. (BTW “Available” used to just be called “Unallocated” which is IMHO a better descriptor of what it’s supposed to be)
To avoid overdrafts and see where your money really is going, it’s probably best to fill the overspent envelopes from Available now; your reports will still be accurate so you can see where you’re overspending, but you also won’t risk spending money today that you don’t have. When it’s time to refill everything at the start of the month, you may find that you don’t have enough in Available so you’ll need to make some choices/set some priorites.
It sounds like the only “inaccuracy” of your Available balance is the fact that much of it will be needed at the next Fill instruction. Creating a salary envelope and using that when it’s time for the next Fill may be the easiest way to manage the discrepancy, if it’s difficult otherwise.
When you allocate your money at the beginning of the month, try putting all of it into envelopes. You can always transfer between envelopes later if you need to, but that way you won’t be counting on the Available envelope to be your slush fund/safety net and dipping into next month’s money accidentally.
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Thanks Tiffany. That pretty much confirms my line of thinking and helps reassure me that I’m doing things correctly. A salary envelope is an idea but I don’t want the overhead of managing that so I think I’m just going to accept things as they are. I tend to agree that Unallocated is better than Available and calling it that helps me understand why there is currently a chunk of money in there. Having said that there isn’t enough in my Available envelope to fill all of the other envelopes on September 1st so I think I might need to take some money out of Savings!
Which leads me to another question. This should possibly be another topic but we are currently in the process of moving house and have lots of one-off expenses such as solicitor’s fees, searches, surveys etc etc etc. What’s the best way to handle this? I’ve created an annual envelope with zero budget but this is obviously in a big negative and contributing to the problem above. This isn’t something I want to set aside a monthly budget for (as it’s going to all be finished in a month or two) and I don’t really know what the full cost will be; but I expect it will be a few thousand pounds. I suppose the ideal thing would be “project envelopes” or envelopes you can flag as “tracking only” which you don’t have to fill but I realise that sort of functionality doesn’t currently exist.
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Funny you say that; we’ve just gone through the same thing! Chances are your moving expenses are coming from Savings as they’re not likely to be part of your usual budget, so I would just use an Annual envelope as you’re doing to track them. You can use your Available funds to offset the envelope as it goes negative, or just transfer a bulk of money from savings into it in some estimate of what you think you’ll spend. I should mention that you can have any amount in an envelope, even if the budget is £0, so that’s not a problem. Once the final accounting is done, you can then move anything back out of that envelope into Available or Savings (assuming you have a Savings envelope here) and then delete the envelope. (None of the transactions will be lost when you do.) Then it’s basically functioning as a “tracking” envelope (you’re welcome to let it go negative and stay that way if you wish, as long as you know what your bank balances are so they can cover everything else.)
The other option is a Goal envelope, but that’s really designed more for when you want to save up a set amount (say for a holiday) rather than just keep a running tally.
Sounds like you’ve got everything fairly well dialed in!