THE GLOSSARY · BUDGET
Envelope rollover
What you have left — or what you are short — at the end of the month, carried into the next. It is the mechanism that separates a budget from a good intention.
By the Yoseri News desk · · 1 min read
End of the month. You have $88 left in your Groceries envelope, and you went $45 over on Restaurants. What happens to those two amounts on the 1st? The answer is called the envelope rollover: the balance of a category at the end of the month, added to or taken off its cap the following month.
It works both ways. Your Groceries envelope capped at $600 and spent to $512 starts the next month at $688. Your Restaurants envelope capped at $220 and spent to $265 restarts at $175.
The second half does all the work, and it is the one people switch off first. If your overruns do not roll over, going past your cap costs you nothing — and a cap that costs nothing is not a cap.
The accumulated rollover is real money: $96, then $154, then $218 over three months running in the example above. That money appeared on none of your statements before it was worked out, and it can fund an annual provision.
In Yoseri, you set all of that on the Budget page: your overrun rolls over just as your surplus does, and the next month’s cap is recalculated accordingly.
Where the figures come from
The maths in this article starts from the assumptions written above. Run them again with your own figures — you should land on the same numbers.
Yoseri News is an educational publication. Nothing in this article is investment advice, a recommendation to buy or sell, or tax advice. Yoseri is registered as neither an adviser nor a dealer with any market authority.