Overallocation
Overallocation happens when you've assigned more money to your categories than you actually have. What "have" means depends on your budget type:
- Zero-Based Budgeting: your allocations exceed the combined available balances of your accounts.
- Classic Budgeting and Simple tracker: your allocations exceed the income you've entered.
For example, if you have $1,000 but allocate $1,100 across rent, groceries and dining out, you've overallocated by $100. You've earmarked money you don't have.
Until overallocation is fixed, you can't trust your budget numbers.
Why it's a problem
When your budget is overallocated, a category can look like it has money for an expense when that money doesn't exist. That leads to overspending and to decisions based on a budget that no longer matches reality.
- In zero-based budgeting, every dollar you have gets a job, and only the dollars you have. Overallocation breaks that rule, so the budget can't balance.
- In classic budgeting, you have a bit more flexibility, but overallocation still gives you a false sense of how much is left.
The warning on the Budget tab
The Budget health check tells you as soon as it happens: "Your category allocations exceed your combined available account balances by $200.00. Review and update your allocations" (or "…exceed your entered income by…" for classic budgets and the simple tracker).
On that line:
- The ? button explains what overallocation is and how to fix it.
- The arrow opens the Allocation history.
Find what caused it
If the problem is recent, the Allocation history shows your latest allocation changes, newest first. Changes that pushed the budget over are marked, for example "Adjusted from $0.00 to $555.55, allocating beyond available funds by $476.55". You can open an entry and Undo it if it was a mistake.
How to fix it
Reduce the amounts allocated to some categories until the total matches what you have. In the example above, you could take $50 each from groceries and dining out. Once fixed, the health check reads "There is no overallocation".
If you use zero-based budgeting, also check that your account balances are up to date: a missing income transaction makes it look as if you have less money than you do.