Envelope Budgeting in PocketSmith
Ultimately, PocketSmith isn't designed for envelope budgeting or zero-based budgeting. You may find that it might take a little time to get used to the different ways of budgeting.
Learn about PocketSmith's different approach to budgeting and the opening balance workaround you may like to utilize.
In this user guide
Budgeting in PocketSmith
In PocketSmith, rather than splitting your income into envelopes or allocating all of your income across your expenses, we recommend creating repeating budgets for your income to match when you are paid e.g. weekly or monthly.
Next, create repeating budgets that are set to occur as close as possible to your actual expenditure. For example, if you grocery shop weekly on a Tuesday, set your Groceries budget to recur weekly on a Tuesday, or, if your Netflix subscription renews monthly on the 14th, then set up your Netflix budget to recur monthly on the 14th. This allows for the most accurate reporting of your budget, and helps to create a more accurate forecast. 📈
You can then use the Income & Expense Statement (Reports > Income & Expense) to regularly track your current and future budgeted position rather than allocating your income to your expense budgets. Through regular monitoring of your transactions against budget, you should be well placed to view if you are keeping within budget or exceeding it.
Using Rollover Budgeting to effectively create an opening balance for a category
While we don't have opening balances or starting amounts for categories in PocketSmith, you can use Rollover budgeting to achieve a similar effect.
Beta feature
Rollover budgeting is only currently available to those that have opted-in to the beta program. If you aren't currently in the beta program, this guide shows how you can join: Becoming a beta tester in PocketSmith
Rather than entering an opening balance for a category - we'd recommend instead setting up a regular repeating budget for the category, and then going back and editing the first instance of the budget with your opening balance amount.
For example, if you set aside a certain amount for a category each month, say $50 a month for Gifts, but already have $200 accumulated for this category, you can set your Gifts budget to be a repeating budget with the amount set to $50 that repeats each month, and change the first budget event so the amount is set to $200.
This way, the budgeted amount now matches the same amount you already have accumulated, and any unspent or overspent money towards that budget will roll over to the next budget period.
Note
Any unspent (accumulated) amounts from previous budget periods are rolled over and added to your budgeted expenses as though you will spend them within the current period, there is no way to exclude these at present.
If you have significant amounts accumulated in your opening balances, this may cause your rollover expense budgets to exceed your budgeted income.
Steps to create an opening balance for a category
- Head to the Calendar page. Ensure you have the Show actuals in history option Unticked to spot past budgets.
Locate the first budget event for the budget you are wanting to set an opening balance for, and click on the budget event. In this example, the budget starts on 15 December
Change the budget amount to the amount you already have saved up, and click UPDATE. In this example, the amount is $200
You will now be asked to confirm your changes, and make sure you select 'Only to this budget event on date' and click Confirm changes
The 'opening balance' budgeted for this category is now updated! ✨
