When you have money that is available to spend, but is not in an Envelope, that money is Unallocated. Another way of thinking about it is that your Unallocated balance equals the sum of money in your Accounts minus the sum of money in your Envelopes.
In this article we’ll go over where Unallocated money comes from and what you can do with it.
Where does Unallocated money come from?
When you record income, you can choose whether to add that money directly to your Envelopes, or leave it Unallocated.
If you want to add funds directly to your Envelopes, click on the “Fill
Envelopes” button, then choose to “Fill From.. New Income” on the right.
That will let you add money and distribute it right away.
If you have multiple or irregular incomes, it may be easier to pool that
income before distributing it to your Envelopes. To pool your
income click on the “Add Transaction” button, then click on the “Income”
tab and enter your income. The money from your income will pool as
2. Adding or Editing Accounts
When you add or edit your Accounts, you are changing the amount of money that you have to budget. The change in amount remains Unallocated until you distribute it to your Envelopes. For example, if you add a Checking Account with a balance of $500, that will add $500 to your Unallocated Money. If you add a Credit Card Account with a balance of $500 that you pay off in full every month, your Unallocated will *decrease* by $500. Adding a Debt Account will not adjust your Unallocated money.
3. Deleting Envelopes
When you delete an Envelope, its balance becomes Unallocated. So if an Envelope has a balance of $45, deleting it will make that $45 Unallocated.
What do I do with my Unallocated money?
How you use your Unallocated Money depends on how you want to budget. You can use it to pool irregular income, save up for big expenses, or simply not use it at all.
Give it a job!
The fastest way to give your Unallocated money purpose is to distribute it to your Envelopes. Click the Fill Envelopes button and choose the “Unallocated” tab. There you can choose how to distribute your Unallocated Money to your Envelopes.
(If you want to fill your Envelopes directly from your income, choose “Fill From.. New Income.” This will let you record an income and distribute it directly to your Envelopes.)
Pool multiple or irregular incomes.
You don’t need to use your Unallocated the moment in comes in. If you have multiple incomes you can let them pool together before filling your Envelopes. When you’re ready, click the “Fill Envelopes” button and choose “Fill From… Unallocated.”
Save up for big expenses.
Unallocated money is also a convenient place to build up savings. Record your incomes as they come in, and take what you need each month. Over time you’ll build up a cushion in your Unallocated that you can use to jump start your savings or pay down debt.