Reserves are for RESERVED money

The concept of Reserves is pretty simple.

Imagine that you have $1,000 in your pocket right now. By default, all the money in all your accounts appear in the envelope named "HoneyMoney".

So, you have $1,000 in your pocket and the same $1,000 in "HoneyMoney" envelope, and $0 in Reserves right now.

Tomorrow you planned to pay $500 for rent and also buy groceries ($100).

The app will calculate all your planned expenses and will tell you:

Hey, you need to RESERVE 500 + 100 = $600 in Reserves, but you have $0.

So you have a deficit of $600 in Reserves.

You will need to transfer $600 from "HoneyMoney" to Reserves.

And you will have:

• HoneyMoney $400 — money for your unplanned expenses
• Reserves $600 — money reserved for your planned expenses

And your Reserves will have optimal balance, meaning that it has enough money for all your planned expenses.

Imagine that you transferred $700 instead of $600 to Reserves.

The forecast will tell you that you have a surplus of $100 in Reserves, and you can safely transfer it somewhere else (to "HoneyMoney" or other envelopes).

But if you transferred only $500, you'd have $100 deficit in Reserves.

That's the simplified version of how Reserves Forecast works.

In reality it also takes into account your planned incomes, and planned transfers from/to Reserves.