Account Types

In Peak Budget, the type of account you use matters. Account types determine how money flows into your budget, how spending is handled, and how balances are tracked over time.

There are three types of accounts:

  • Everyday Accounts
  • Debt Accounts
  • Asset Accounts

Each behaves differently by design. Understanding these differences ensures your budget stays accurate, category balances reflect reality, and the decisions you make are based on the right numbers.

Everyday Accounts

Everyday accounts represent the money you use for day-to-day spending, such as chequing and savings.

How Everyday Accounts Work

  • Money flowing into an Everyday account is money you can budget.
  • Money flowing out of an Everyday account is money you are spending or moving elsewhere.
  • Everyday accounts are the only accounts that directly feed your budget.

When money enters an Everyday account, it increases Available to Budget, allowing you to assign that money to categories.

To Be Budgeted

When selecting a category for a transaction in an Everyday account, you can choose To Be Budgeted.

  • Categorizing a transaction to To Be Budgeted increases (or decreases) Available to Budget.
  • This is how income and starting balances become money you can assign in your budget.

Debt Accounts

Debt accounts represent money you owe, including credit cards, lines of credit, loans, and mortgages.

All debt accounts follow the same core mechanics in Peak Budget, even though how you use them in practice may differ.

The Linked Category

Each Debt account has a single linked category, created automatically when the account is added.

This category is used in two ways:

  • On the Budget:
    It represents money you’ve set aside to make payments on that debt.
  • Inside the Account:
    It is used for balance changes that should not affect your budget, such as interest or adjustments.

Spending on a Debt Account

When you make a purchase using a debt account (for example, groceries on a credit card), the transaction is categorized like any other purchase.

What happens next depends on whether the spending category was funded:

  • If the category was funded:
    The purchase reduces the category balance, and the same amount is automatically moved into the linked category. This ensures money is set aside to pay the debt.

  • If the category was not funded:
    The category goes negative, and no money is set aside for payment. This reflects overspending that still needs to be addressed.

Making Payments and Borrowing

  • Payments are recorded as transfers into the debt account.

    • These use money from Everyday or Asset accounts.
    • The linked category decreases as the payment is made, reflecting that the money has been used.

  • Borrowing (such as a cash advance) is recorded as a transfer out of the debt account.

    • This increases the debt balance.
    • The money becomes available to budget once it reaches an Everyday account.

Interest, Adjustments, and Balance Changes

Interest charges, balance corrections, or similar changes are recorded inside the debt account and categorized to the linked category.

  • These affect the account balance.
  • They do not affect your budget or category balances.

Many people set a goal on the linked category to reflect how much they want to pay toward a debt each month. This may represent a minimum payment, a fixed loan payment, or an intentional amount to accelerate payoff.

Credit cards are common enough - and behave subtly differently in practice - that they are covered in more detail here.

Asset Accounts

Asset accounts represent value you own rather than everyday spending money, such as TFSAs, RRSPs, investment accounts, and home equity.

Asset accounts are designed for building balances over time, but they can also be used as a source of funds.

The Linked Category

Each Asset account also has a single linked category, created automatically.

This category is used in two ways:

  • On the Budget:
    It represents money you plan to contribute to the asset.
  • Inside the Account:
    It records balance changes that should not affect your budget.

Contributing to an Asset

Contributions are made using transfers into the asset account.

  • On the budget, you assign money to the linked category.
  • When you make the transfer, the category balance is reduced and the asset balance increases.

This allows you to plan contributions without immediately moving money.

Spending From an Asset

When you spend directly from an asset account and assign the transaction to a normal budget category:

  • The category balance is reduced.
  • The asset balance decreases.
  • Available to Budget does not change.

This is useful for things like down payments or large purchases funded from investments.

Growth, Interest, and Adjustments

Changes such as investment growth, interest, or balance corrections are recorded inside the asset account and categorized to the linked category.

  • These affect the account balance.
  • They do not affect your budget.

Many people also set a goal on an asset’s linked category to represent how much they want to contribute each month toward long-term savings or investments.

What the Available Column Means in Your Budget

The meaning of the Available column depends on the type of category:

  • Regular spending categories: Available means how much you can still spend.
  • Debt linked categories: Available means how much money is set aside to pay toward that debt.
  • Asset linked categories: Available means how much money is available to contribute to that asset.

The number always represents money with a specific purpose - the purpose changes based on the category.

Summary

  • Everyday accounts supply money to your budget.
  • Debt accounts track what you owe and use a linked category to manage payments.
  • Asset accounts track value you own and use a linked category to manage contributions.

Choosing the correct account type ensures Peak Budget reflects your financial reality accurately and keeps your budget reliable.