I think Splitting a transaction is the way to manage your hot chocolate and coffee. You’d enter the transaction, let’s say $30 at Coffee People, and the account from which the payment was made, but then Split the transaction so $10 comes from the kids’ envelope and $20 from you and your partner’s envelope. That way you can easily reconcile the account and the expenses are charged to the correct parts of your budgets.
The values in your envelopes can carry over or be reset per your preference. When you create an envelope Fill, you’ll be asked whether you want to “Set” or “Add” an amount to an envelope. Using “Add” means the new money will just go in, so any negative amount would be included. “Set” resets the envelope to exactly the amount you’ve budgeted.
Some examples:
I budget $100 for Movies. This month, I spend $75. If I choose to “add” $100, I’ll have $125 next month. If I choose “Set”, Goodbudget will put in just $75 so I’m back to $100 at the beginning of the next period.
Likewise, if I spend $125 this month and end up negative, “Add” $100 means I only have $75 for the next period.
Hope that helps!