Picking your allocation order

Most budgeting tools ask you for percentages: 50% to needs, 30% to wants, 20% to savings. That works fine when your paycheck is the same every month. It falls apart the first time your income drops 40% — because percentages of a small number are still a small number, and your fixed bills don't care.

ReservWise inverts the model. Instead of percentages, you pick the order in which money fills your six reserves. Each reserve has a target floor. Income flows top-down, filling each reserve to its floor before any money reaches the next one. Whatever's left after the last reserve is yours to draw or reinvest.

Why order matters more than percentages

Picture a slow month. You earned \$3,200 instead of your usual \$8,000. With percentage-based budgeting, every category gets 40% of what it used to get — including your tax reserve, which now isn't enough to cover your quarterly estimate.

With order-based allocation, your highest-priority reserves (Survival, Business Ops, Tax) fill all the way to their floors first. Lower-priority ones (Lifestyle, Wealth) get nothing this month. You're protected from the ground up. When the next \$10K month lands, the lower reserves catch up automatically.

It's the same math the smart envelope-budgeters have been doing for decades, just enforced by software so you can't accidentally pay yourself before you've covered the things that will eat you alive if they go unfunded.

The default order — and why it's the default

Every new ReservWise account starts with this order:

1. 🔴 Survival — rent/mortgage, utilities, groceries, insurance, the absolute minimum to keep your life running for one month. If this isn't full, nothing else matters.
2. 🟠 Business Ops — software subscriptions, contractors you owe, hosting, the recurring costs of having a business at all.
3. 🟡 Tax Reserve — set-aside for federal, state, and self-employment tax. The IRS doesn't accept "I had a lean quarter" as an answer.
4. 🟢 Growth — ad spend, equipment, hires, courses — the discretionary investments that compound over time.
5. 🔵 Lifestyle — dinners out, travel, the upgrades that make running a business feel worth it.
6. 🟣 Wealth Building — index funds, retirement accounts, real estate down payments — the long-haul stuff.

Survival before Business Ops because if you can't pay rent, your business can't save you. Tax before Growth because the tax bill is non-negotiable and Growth is. Lifestyle before Wealth because if you never enjoy any of this, you'll burn out and the long-term wealth strategy collapses anyway.

How to set or change the order

1. Open Settings → Allocation.
2. You'll see your six reserves listed with drag handles.
3. Drag to reorder. The change preview shows you how the next \$1,000 of income would flow under the new order.
4. Each reserve has a floor (the target amount it should hold) and an optional monthly target (how much should land there from a typical month). Edit those inline.
5. Click Save allocation rules. Future income uses the new order immediately. Already-allocated money stays where it is — no retroactive shuffling.

Two common strategies

Most operators converge on one of these:

Fixed floors, then overflow

Each reserve has a hard dollar floor. Income flows top-down until every floor is met, then everything beyond goes to the last reserve (usually Wealth Building). This is the cleanest model and what we recommend for the first month.

Example: Survival floor \$4,000, Business Ops \$1,500, Tax 30% of gross income, Growth \$2,000, Lifestyle \$1,000, Wealth = remainder.

Percent-of-deposit per tier

Each reserve gets a percentage of every deposit, in order, with optional caps. More fluid for high-volatility income but harder to reason about. Toggle this in Settings → Allocation → Mode if Fixed Floors feels too rigid after a month.

Example: Survival 35% (cap \$5K), Tax 30%, Business Ops 10% (cap \$2K), Growth 15%, Lifestyle 5%, Wealth 5%.

Common mistakes to avoid

• Putting Lifestyle before Tax. The most common one. Feels good for two quarters, then April hits and you owe money you've already spent. Tax always belongs in the top three.
• Setting no Tax floor. A percentage of gross is fine, but if you also have a flat floor (like \$1,000 minimum per month), you're protected on slow months when the percentage rounds to nothing useful.
• Putting Wealth Building anywhere but last. The whole point of Wealth is that it gets the surplus, not the obligation. Putting it ahead of Lifestyle means you'll skip investing every time you want a dinner out — exactly backwards.
• Changing the order every month. Pick once, run it for a quarter, then adjust. Constant tinkering means you never see whether the order actually works.
• Skipping Business Ops because "it's just \$200/month". It's \$200 you can't miss. Even tiny floors give Lean Month Mode something to defend.

What to do next

• Run the system for two weeks before changing anything. Watch how income flows.
• Read Building Reserves for how to set realistic floors.
• If you're not sure where to put a particular expense category, email a human. We've seen most setups and can usually shortcut you to a sensible default.

Order is the discipline. Percentages are just the tactic. Get the order right and the rest of ReservWise quietly enforces the plan you'd write for yourself if you had time.