The role of reserve
In Decent Budget, we have three types of funds: reserve, budgets and vaults. When we create income transactions, those funds first go to reserve, which later are distributed to categories & vaults when we create a new budget.
Because things in life are in constant flux, sometimes it’s difficult to plan our expenses for the month. It’s normal to go off-budget from time to time—this is why Decent Budget gives you the flexibility to offset those expenses by withdrawing funds from the budget.
When we create unbudgeted expenses in Decent Budget, funds are taken from the reserve. While trivial amounts might seem not a big deal, they have a tendency to compound to significant sums over time.
The idea I want to reinforce is that reserve is not a place where funds can be easily taken when needed. Reserve should only be used when creating budgets, which are then moved to category allocations and vaults. Any unbudgeted expenses should be offset by either withdrawing funds from the budget, or by withdrawing funds from vaults.
This type of budgeting ensures that reserve stays the same throughout the month, which ensures that you’ll have funds to allocate for next month’s budget. If you spend too much and your budget is empty, you have to withdraw funds from vaults, so reserve would stay the same as it was at the beginning of the month.
Right now when you withdraw funds from vaults, budgeted percentage does not change. This is an oversight from my part and I’m currently working on a solution. In the meantime, to offset budgeted percentage, withdraw funds from a vault and while editing your budget, add category from which transaction has been created.
Have a great holidays and I’ll see you next year!