1. Budgeting period
I have set my budgeting period to start on the 1st of the month. But my salary goes in on the 25th, or the last working day before that. I can’t figure out if that matters or if it complicates things. What are the pros/cons doing it one way or the other?
2. Envelope fills - red envelopes
Today is the start of my new budgeting period and I want to fill my envelopes. December being just past I have a number of envelopes in the red (am I alone?). What is the best way to quick fill - Add or Set budgeted amounts? Add seems more ‘honest’ - red envelopes don’t fill completely and you’re left with the consequences of last month’s overspend. But I will need the envelopes to be full again for this coming month. What are your thoughts?
It really just depends on what you like to see. We’re also paid around the 25th, but a calendar-month budget just makes my head happier. I don’t know that it matters a whole lot, so you might try what feels best but you always have the ability to adjust it later on. The pros would be that your envelopes would presumably be full from the day you get paid, but IMHO the cons of having bills likely to post just before or just after that date make a mid-month start more complicated. If you never have a bill due on the 25th (or around the 1st for that matter) it’s probably all a matter of preference.
“Red” envelopes are a fact of life–there will be plenty of times when your budget doesn’t match your spend exactly. You may want to transfer money between envelopes during the month if you run a very tight budget (e.g. if you overspend on groceries you may need to move money out of the dining out envelope) but if you have a little more wiggle room then you can adjust your Fill to make it make sense at the end of the month. Also remember you can have many different scheduled Fills if you want things to happen on different days; we have one for the 15th when our car allowances post and another for payday, etc. Anything that shouldn’t be adjusted in a particular Fill should have an “Add 0” instruction so that no money will be added or removed.
I often think of my “needs” as envelopes where I’ll use Set instructions, but my “wants” as those where Add makes more sense. Like you said, adding less than the month’s budget means you’ll be forced to make up for earlier overages but that’s only really possible with luxuries. If after you’ve done that your Unallocated is in the red, it’s time to find that extra cushion either in discretionary envelopes or from savings, but obviously you don’t want to pull savings out any more than necessary!
I personally don’t use any Quick Fills; all my monthly top-ups are scheduled Fills that I can (and often must) edit after they’ve dropped.
I hope this helps!
IMO, GB is simplest and easiest to use when you can do a single fill of all envelopes for the month on the first day of the month and just let the envelopes burn down from there. As I am paid biweekly and my wife semimonthly, we use calendar months as budgeting periods because it’s the most logical starting point. In order to accomplish the single day-one fill I use some accounting magic to record one massive income and fill at the start, then transfer from that income to my checking account as we actually get paid.
If I were in your shoes I would set my budget start to the 25th. Record your income whenever you receive it and on the 25th just fill everything. Easy peasy.
Some envelopes must be “Set” and others should be "Add’. It’s up to you to decide which is which. My “Bills” envelope is always a Set even though I may have overspent last month on water because I had to refill the pool. “Restaurants” might be Add and we just have to eat out less this month because we splurged last month.
