The method: four rules
How Presupeso thinks: accounts say where your money is and categories say what job it has.
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Presupeso follows envelope budgeting, the same method as YNAB. The core idea is one: accounts say where your money is and categories say what job it has.
- An account is a place: the bank, a digital wallet, your wallet, the card.
- A category is an envelope: rent, groceries, vacation.
Your bank balance may say you have a million, but if 800,000 of it is for rent, you don't have a million for eating out. That's why, when you spend, you look at the category's Available amount and not the account balance.
Rule 1: give every peso a job
Everything that comes into a budget account without a category goes to Ready to assign. From there you split it among your categories until it's at zero.
- Ready to assign above zero: you have money without a plan. Assign it.
- Ready to assign at zero: every peso has a job. That's what you want.
- Ready to assign below zero (red): you assigned more money than you have. Take some out of a category until you're back at zero.
Rule 2: plan for what's coming
Some expenses don't come every month: car insurance, annual fees, December gifts. If you set aside a little each month, the money is there when they arrive. Goals tell you how much to set aside this month to get there on time.
Rule 3: if you overspend, move money
If you spend more than you assigned, the category goes red. Don't beat yourself up: move money from another category that has some to spare. A budget is a plan you adjust, not an exam. See Assign and move money.
Rule 4: what's left over stays
Whatever you don't spend in a category rolls over in full to next month. If you had 40,000 left in groceries in October, November starts with those 40,000 plus whatever you assign. Saving is simply not spending it: you don't need to move it anywhere.
How Available is calculated
In each category and month you'll see three figures:
| Column | What it is |
|---|---|
| Assigned | What you put in the category this month. |
| Activity | What you spent (or got refunded) in that category this month. |
| Available | What you have left: what was left from last month + assigned − spent. |
What if a month ends with a category in the red? The red is not carried over in the category: it starts next month at zero and the shortfall is deducted from next month's Ready to assign. That way it shows up once, right where you decide.
Which accounts are in the budget
Everyday accounts (bank, cash, wallets, cards) go inside the budget: their money is split into categories. Investments, a CD or a long-term loan can go outside the budget: they count towards your net worth but aren't assigned.