How the budget math works

Exactly how To Budget, Available, rollover, overspending, and holds are calculated.

Every number on the Budget tab is calculated from your transactions and your assignments. Nothing is a stored balance that could drift. This page states the arithmetic, for when you want to know why a number is what it is.

All of it applies to envelope mode. Tracking mode is at the end.

What counts

Only transactions in On Budget accounts participate. Money in Off Budget accounts is tracked and never budgeted.

A transaction with no category never affects the budget. The register flags those instead, so nothing is silently missed.

A split transaction’s parent has no category and never affects the budget on its own; its lines are ordinary activity.

An envelope’s three numbers

For a category in a month:

Activity is signed: spending is negative, so it reduces Available. A refund categorised to a spending category is positive and raises it, with no special case.

Carryover

What an envelope passes to the next month:

• If the category is set to Carries debt, its whole Available carries, negative or not.
• Otherwise, only a positive Available carries. A negative one carries as zero.

The first month of your budget carries nothing in.

That single rule is the whole difference between the two overspending behaviours.

To Budget

For a month:

To Budget = last month’s To Budget plus last month’s hold plus this month’s income minus everything budgeted this month plus last month’s overspending minus this month’s hold

Where:

• Income is the sum of transactions in income categories this month.
• Overspending is the total of every negative Available across categories that do not carry debt. It is zero or negative.
• Hold is the amount set aside with Hold for next month, one figure per month rather than per category.

Two of those terms are deferred by a month, and that is the whole reason the behaviour surprises people:

• Overspending charges the next month. Overspend in February and it comes out of March’s To Budget.
• A hold subtracts in its own month and returns in the next. So a hold changes only the month you set it in; every later month is identical to what it would have been.

A worked example

Food, not set to carry debt:

With Carries debt on, March’s Available is negative 100 instead and March’s To Budget is untouched.

Overbudgeted

To Budget below zero. You have assigned more than you hold.

The app does not stop you. It also does not clamp a hold: setting one larger than To Budget drives it negative, which is shown as Overbudgeted like any other cause.

Future months

You can budget up to twelve months ahead. Future assignments reduce those months’ To Budget through the same arithmetic, and the current month’s header notes when money is waiting in future months.

What does not affect the arithmetic

• Move, Cover, and Quick budget write assignments. They change the inputs, never the rules.
• Goals compute a target and never move money on their own. The indicator is display only.
• Reports only read. No report writes an assignment.

Tracking mode

Different arithmetic, and considerably simpler, because months are independent.

• Spending category: Available = Budgeted plus Activity. No carryover, no overspending charge-back, and the Carries debt setting is inert.
• Income category: Available = Activity minus Budgeted, which is what you received against what you expected. Negative means still short.
• Saved, on past months, is the sum of all activity: actual income minus actual spending.
• Projected Savings, on the current and future months, is budgeted income minus budgeted spending.

To Budget, carryover, overspending, and holds do not exist in tracking mode. Their stored data is kept untouched, which is why switching back restores the envelope numbers exactly.

Next steps

• Budgeting
• Envelope mode and tracking mode