Q: I’m seeing this error on my Accounts Overview page saying that my Account Balances should match my Envelope Balances. Why?
Why Envelope Balances and Account Balances Should Match
Envelope Balances and Account Balances are two different views of your financial picture. Account Balances talk about how much is in each of your real-world accounts. If you take all of the balances of your deposit accounts (like your Savings, Checking, Money Market account and your petty cash) and subtract the balances on your credit card accounts, you get your total balances per the Account Balance view of the world.
This, in turn, ought to be equal to the total of your Envelope Balances—which is simply another way of looking at the money that you have. The way of looking at it that gives every dollar (or drachma, yen, or doubloon) a particular job to do.
So while in the “real-world” some of your money is sitting in your Checking account and some is in your Money Market account (and some negative money is sitting on your credit card as a balance to be paid), in the Envelopes world, that same money is sitting in your Envelope balances ready to be spent only for the purpose specified by the Envelope.
How can my Account Balances and Envelope Balances get out of whack?
If you’ve been using EEBA awhile as purely an envelope budgeting tool, when you start using Accounts, you’ll need to make some account or envelope adjustments to get figures to tie up.
Some other cases where they might not match up:
- You delete an Account.
- You delete an Envelope that has a balance
- You assign a transaction that was not assigned an Account (from before you started using Accounts) to one of your Accounts. In general, we don’t recommend assigning all historical transactions to your Accounts.
What can I do if Envelope Balances and Account Balances have gotten out of sync?
Well, you have a few choices.
- You can adjust your Account Balances by entering an Account Balance Adjustment.
- You can add to or reduce the balance on an Envelope using the Fix This functionality on Accounts…Manage Your Accounts page.
We recommend following these steps:
- Get all of your Account balances to what they are in the “real-world”.
* Edit the transaction that was entered when the Account was created (look at the Account’s history to find this) or use an Account Adjustment.
* You’ll want to take into account any transactions that you have entered into EEBA that are not shown on your most recent statement or not showing when you access your account online.
- Then make an adjustment to one Envelope using the “Fix This” functionality on the Accounts…Manage Your Accounts page.
- If you need to adjust more than one envelope, adjust one first using the Fix This functionality, and then use Envelope Transfers to move the funds around where you want them.
Do I have to make them match?
No, of course you don’t. We do generally recommend it, especially so that you don’t have more in your envelopes than you have in your actual accounts. But you don’t have to make them match. And you may want to wait until your first bank statement reconciliation to make them match so you don’t end up making endless tweaking adjustments.
I don’t understand why the amount in my envelopes doesn’t match the amount
in my accounts when I reconciled them recently. I thought that entering payments automatically removed that amount from the account.
Recording expenses, transferring from envelope to envelope or account to account, and recording incomes all keep your balances in sync. However, if you use the Adjust Account Balances to add or remove money to match your bank statement, this won’t make a corresponding change to your envelopes. You’ll then need to go to the Accounts…Manage Your Accounts page to adjust an envelope to match.
If you need to adjust your account balance to correct for a check that cleared or a credit card transaction that posted, don’t use an account adjustment. Instead, record this as an expense against that account and one of your envelopes. This way the amount is deducted from your account as well as your envelopes.