"Best practices" for using Goodbudget

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I am trying to figure out how to set things up properly with my budget. I tried searching in the help and forums for some "best practices" for using the software, but could not find anything that makes it all clear to me.

I already have a budget defined for how much money I want to spend/save each month as I am coming from another envelope based software product.

I have some envelopes that I plan to set each month for a certain amount. That will be how much I plan to spend from that envelope each month. I created these are monthly envelopes.

Then I have other envelopes that I plan to add to each month. These are expenses that are irregular. They may come in a few months (school activities), once a year (insurance premiums) or after several years (new car). I save money for when I need it. I think I know how to fill the envelopes correctly. I tried creating these are annual/irregular envelopes. However, then my monthly budget figures don't come out right. But if I make these monthly envelopes, then the envelope thresholds become meaningless.

What is the recommended way to handle this?

Thanks,
Mark
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Mark

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Posted 5 years ago

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Becky Huang, Official Rep

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Hi Mark,

Thanks for sharing your situation with us. We typically recommend including your irregular expenses as part of your monthly budget. This way, you can partially fill your School Activities Envelope or Insurance Envelope each month and build up to your goal amount by the time that you need it. This would mean that you'll need to adjust your monthly budget up front so that you don't have to adjust it each time you need pay for an irregular expense. Does this make sense?
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Mark

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Hi Becky,

I am not sure I understand what you are saying. Lets take two examples that are clearly not annual in nature.

First, School Activities include things like field trips. I do not know when, how many, or the cost of these activities for a given year. So I just budget a certain amount each month for these activities. This envelope accumulates until it is needed. I do not have a target amount for this envelope. Should I just make this a monthly envelope for the amount that I save each month and it will typically by way over the envelope amount?

Second, Auto replacement is to save money to replace a car when needed. I save a certain amount each month with the goal that I will accumulate enough money to purchase a new car for cash when one of my vehicles is no longer useful to us. This should be several years of accumulation. Should I also make this a monthly envelope for the amount that I save each month?

Now, for an annual envelope like Auto Insurance that is a clearly defined amount each year, I can set up an annual envelope for the total amount needed for the year. Will that envelope reflect the monthly amount that I am allocating to it in any reports or views?

I want the reports or views of my monthly budget to reflect what I am actually allocating each month. That is the point of my question.
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Becky Huang, Official Rep

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Hi Mark,

For the first two Envelopes that you mentioned, we recommend creating them as Annual Envelopes making the budget 12x what you want to add each month. The monthly budget amount is what will be reflected in your Budget Allocation Report and on the Add/Edit Envelopes page.

We're working on creating goal Envelopes for categories that aren't due annually.
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Mark

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OK, I understand now. Thanks Becky.

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