How do the Living Pouch and the Reservoir work together?

They serve two different purposes but work together to regulate your spending.

When income arrives, it first goes into the Reservoir. The Reservoir then releases money gradually as Daily Cash, which flows into the Living Pouch. You spend from the Living Pouch.

Reservoir:

Holds unreleased income
Manages pacing by sending out Daily Cash each day
Reflects timing between paychecks
You do not spend from it

Living Pouch:

Receives the Daily Cash
Holds your available day-to-day money
Is where you swipe flexible spending transactions
Is the number you watch to track your pacing

The Reservoir is upstream. The Living Pouch is where the water collects for daily use.