Have you ever heard of envelope budgeting?
Its a simple system that helps you visualize and stick to a budget.
So as money comes in, you direct it to each portion of your budget.
Its a smart system for someone like me, who works much better with the tangible than the intangible.
Theres just one problem: I barely work with cash anymore.
Freelance clients pay me via PayPal.
I use one online checking account, and my main bank doesnt even have an ATM in this state.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
It would be ridiculous to get my hands on cash to have a go at use this budgeting system.
Instead, I triedMvelopes, a budgeting app inspired by the envelope system.
Like its physical counterpart, the Mvelopes app partitions my money across categories.
But it doesnt require any cash on hand everything happens digitally.
Before you think otherwise, Mvelopes didnt ask us to talk about its app.
We just love to test new financial tools, and I want to share my experience with you!
Did you know?
Mvelopes connects to my bank account to keep track of income and expenses.
Money goes toward each of these expenses and goals, and Mvelopes tells me whats leftover my spending money!
This system makes sticking to a budget easy for me.
Thats where extra money lives after all the envelopes are funded.
Because its connected to my bank account, Mvelopes automatically tracks my income and expenditures.
Unfortunately, the app doesnt automatically partition my spending, a feature thatd make it much more valuable.
I usually prefer set it and forget it tools to manage my finances.
Sign up online atwww.mvelopes.com.
Or you’re able to download the app foriOSorAndroid.
Youll need your online banking username, password and possibly an answer to a security question.
I added the date and amount of my fixed paychecks, but left off my freelance income for now.
you’re able to also add variable income month by month, if your income isnt consistent.
Creating your budget in Mvelopes is similar to creating any other budget.
Youll create envelopes for what you spend money on and assign a monthly cost to each.
I also budget for gas, groceries and household essentials I know cost about the same each month.
you could set aside a little for each every month, so youre prepared when they come up.
Next youll fund your envelopes, which means assigning part of your balance to cover each expense.
Youll do this with each paycheck to distribute your income as needed across your anticipated expenses.
Get an easy snapshot of your budget.
The amount left in your Income Cash Pool is money that hasnt been allocated to other envelopes.
Use this for extra spending this month or allocate it to envelopes to get ahead for next month!
This should help keep your spending in check.
Youll have to spend some time each day or week assigning your purchases to various envelopes.
I think Ill look into other budgeting apps for now, because I prefer automation.
Ill be sure to let you know what I learn!
Dana Sitar (@danasitar) is a staff writer at The Penny Hoarder.
It sounds appealing right?
Check it out here!
