3 · How the budgeting in the app works
Envelopes, in four groups, each at its own real frequency — with one screen switch that converts the whole thing between a week, a fortnight, a month, a quarter and a year.
The Budget tab uses the oldest system there is. Before electronic banking, households divided the pay into physical envelopes marked rent, power, food, and when an envelope was empty that category was finished for the period. The app keeps the logic and drops the cash: each envelope holds an amount you plan to spend, and you log spending against it.
Step one — where the income comes from
The income figure at the top of the Budget tab is normally not typed. It is the household’s take-home pay, calculated on the Income & tax tab from salaries, super choices and deductions, and passed through automatically. That is why the income box on the Budget tab is locked by default.
If you would rather not build a payslip — you are self-employed, your income varies, or you simply want a quick answer — switch the source to Type my own and enter a net figure at whatever frequency it arrives. Everything downstream still works, with one exception: manually entered income cannot calculate a HELP repayment, because the app has no salary to assess it against.
Step two — the four groups
Every envelope belongs to one of four groups, and the group is the analytical point of the whole tab. Three households with identical total spending can be in completely different positions depending on how it is distributed.
| Group | What belongs in it | What it tells you |
|---|---|---|
| Bills & commitments | Rent or mortgage, power, water, phone, insurances, rates, rego, school fees | Your fixed floor — the amount that arrives whether or not you have a good month |
| Everyday living | Groceries, fuel and transport, health, home maintenance, the vet | The genuinely necessary but flexible middle |
| Lifestyle & fun | Eating out, subscriptions, clothing, gifts, holidays | Where change is possible quickly, and where guilt is usually misplaced |
| Savings & goals | General savings, the emergency fund, and every named goal | Treated as a cost, not as leftovers — which is the entire trick |
The fourth group is the one that does the work. Saving whatever is left at the end of the fortnight is not a plan, because there is never anything left. Entering savings as an envelope — a cost the household pays itself, alongside the electricity — is what makes it happen. Households that do this reliably save more than households with higher incomes that do not.
Step three — each envelope at its own frequency
This is the feature that separates the app from a spreadsheet. Each envelope is entered at the rhythm at which the money actually leaves: groceries weekly, rent monthly, car registration yearly, the dentist yearly. The app converts everything to whatever period is on screen.
Nothing about the annual totals changes — everything about their accuracy does. A $920 registration entered as a yearly envelope shows as $35.38 a fortnight, sitting quietly in the plan all year, so that when the notice arrives the money is a line item rather than an emergency.
Build it in Year first, then operate it in your pay cycle. The year is the only view where every expense appears exactly once. Once the yearly picture is honest, switch the period selector to your fortnight and use it — the figures convert themselves, and each card shows what you entered, the amount in the period on screen, and the annual cost.
Step four — logging spending, and closing the period
Day to day, you log an expense against a category: pick the envelope, type the amount, press Enter. Each envelope shows how much has gone in, how much is left, and turns terracotta when it is over. The five summary cards at the top hold income, allocated, spent, left and the surplus.
At the end of a fortnight you press Close period. That stamps the period, files what was spent, and starts the next one clean. The point is not record-keeping for its own sake; it is that a closed period is a comparison — this fortnight against the last four — and comparison is where drift becomes visible.
Step five — envelopes that become funds
An envelope in the Savings & goals group can be marked build its own fund in the forecast. That turns it from a flow into a stock: a named pot that grows year by year in the projection, waiting to be spent by a planned purchase that nominates it.
- An envelope named simply Savings feeds the general savings pool.
- An envelope beginning Emergency feeds the emergency fund, which earns interest and is held separately.
- Any other named goal — New Caravan, Bali 2028, Roof — builds its own visible column in the forecast.
This is also why the app insists you name the thing. “More savings” is not funded by anyone. “Bali 2028”, with a real price and a real year, is.
Reading the budget honestly
| What you see | What it means | What to do |
|---|---|---|
| A large surplus | Income no envelope has claimed | Give it a job — a goal, a debt, or super. It will otherwise be spent |
| A negative annual gap | The plan does not fund the year | Structural fix needed, not vigilance. Start with the biggest bills line |
| An envelope over every period | The figure was a wish, not an estimate | Raise it to the truth and cut elsewhere. A budget you cannot meet gets abandoned |
| Savings envelopes at $0 | Saving is being attempted from leftovers | Move a real amount into Savings & goals before the fortnight starts |
| Bills group above about half of income | Very little room to absorb anything | Section 6 — the debt and commitment review |
Common trap: if a novated lease or salary packaging is already coming out before tax on the Income & tax tab, do not budget for the car’s running costs again in an envelope. The lease covers them, and counting both makes the household look poorer than it is.