Welcome!
First, it’s important to realize that Accounts and Envelopes are simply two different way of looking at your money–they don’t cross over like you’re imagining they do. Filling envelopes won’t affect your account balances at all.The Unallocated amount is, as you said, the total amount of money that is available to spend across all your accounts. Filling from Unallocated simply puts those dollars (pounds, euros, etc.) into the envelopes you’ve created as placeholders for the funds. Until you spend money, the accounts won’t change.
Here’s a simplified example:
Say you have three accounts: Checking, Savings, and MasterCard. The Checking account has a balance of $1000, the Savings account has a balance of $3000 and the MasterCard gets paid off every month, so there’s no balance on Day 1.
My total account balance is $4000, and with no envelopes my Unallocated Envelope has $4000 in it.
I don’t want to spend my Savings, so I create a Savings Envelope and fill it with $3000 (to match my savings account–some people just don’t track Savings and leave this step out completely). Now those $3000 have a “job” and my Unallocated balance is only $1000.
Next I create Envelopes for rent, food, and utilities. I budget $500 for rent, $200 for food and $100 for utilities, and fill the envelopes with those amounts (budgeting and filling are two separate steps–you don’t have to have all the money at once). Now my Unallocated balance is $200. Finally, I create an Envelope for miscellaneous expenses and fill it with the $200 remaining.
The account balances haven’t changed at all–the envelopes are just telling you where you expect to spend the money you have. Once you enter a transaction, you’ll assign it to an envelope and an account, which THEN changes the account value. So if on the 1st you pay your rent ($500) from Checking and buy groceries ($50) with your MasterCard, your Rent envelope will show $0 remaining and your Grocery envelope will show $150 remaining. Your Checking account will have a balance of $500, your Savings account will still have a balance of $3000, and your MasterCard will have a balance DUE of $50. Your total money/account balance is now $3450 ($4000 - $500 - $50), your Unallocated envelope still shows $0, and your envelopes have been reduced by the amount you’ve spent from each one.
If you spend every penny of every envelope and don’t go over, at the end of the month the amount remaining in checking will be exactly equal to the amount owed to the credit card, so it gets paid off, goes back to $0, and starts over.
Obviously that’s a big oversimplification–budgeting is a process, and you’ll almost certainly adjust things as you go along. You might move money between envelopes, add more to savings, etc. which is all fine. Most people live their budget almost exclusively in Envelopes but as you can see, the Accounts tab is there for reconciliation and to track the amount available at any given moment.
Long story short, or TL/DR: Moving money around in envelopes or into/out of Unallocated doesn’t affect your account balances at all, only actual transactions will change the amount shown there.
Hope that helps!
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