Financial Software for Envelope System

[Hyacina]

DH and I use the Envelope system with our budget. We cannot find financial software that works well with this system. Has anyone used one that they can recommend?

[frozemud]

Have you tried Mvelopes.com?

[Greg]

Originally Posted by Hyacina

DH and I use the Envelope system with our budget. We cannot find financial software that works well with this system. Has anyone used one that they can recommend?

I'm going to sound like an idiot asking this, but..... what is the envelope system?

[Will]

Every month, the budget fairy comes... oh wait. No. I kid. I kid.

I think Philip covered it a little bit in this article.

When I was first introduced to budgeting, the model used was the envelope method. Every payday you'd take your cash and divide it up among envelopes labeled "Rent," "Groceries," "Electric Bill," etc. Then, when it was time to shop for groceries or pay a bill, you'd take the money out of that envelope.

[gtwise]

Originally Posted by frozemud

Have you tried Mvelopes.com?

I'm using Quicken 2008. It has a feature called My Savings Plan which is essentially the envelope system. It is different from the budget feature that has been built into Quicken's earlier versions, this one actually works, more or less. The only beef I have with it is that you can't set up groups of categories and have one allocation for them.

What I'm talking about is, I have an entertainment envelope but I like to categorize my entertainment into several sub-categories such as Movies, Shows, Indoor, Outdoor etc. If I want to monitor these sub-categories I'd have to set up each sub-category with its own envelope and shuffle money between them as I see fit for a particular month (I might watch two movies but don't go bowling at all in February, for example). I'm not even sure if Mvelopes would allow you to have sub-categories like this (Microsoft Money certainly doesn't).

Quicken also has saving goals which are great for long term, known expenses such as property tax or annual car insurance. You can put money into these goal bins and your goal can have a deadline and a goal amount. Quicken will "hide" the money from you into a Goal "asset account" until you take it all out back into your savings or checking account to spend it all on the goal item. Quicken will also estimate how far you're off from the target amount and how much you need to save for it monthly to meet the deadline.

Mvelopes looks like a nice application that probably uses yodlee's interface to download transactions from your accounts, but at $8/month (that is if you sign your life away for 2 years) it seems pretty pricey. Also note that it's a web application running on a remote server with who knows what kind of aggregate data mining. Quicken is not the fastest application but I guarantee it beats out Mvelopes.

You can buy Quicken 2008 Premiere at Costco for $62, I think it's a pretty good deal.

[Anthony Marrone]

mvelopes seems to be the consensus around the web. The problem I have with the envelope system is that it seems too restrictive and reactionary. I understand that the system is built on a classic model where Ma and Pa actually would take money out of the envelope, but what happens when the grocery envelope is empty and you need milk? My budget system needs to be rigid enough so I can maintain a high-level of discipline with my spending, but flexible enough to account for ever-changing circumstances.

[cigood]

I've been using a program called IntelliPenny. It is fairly new, but seems to have everything I need for the envelope system. The website is http://www.intellipenny.com. It costs much less than Quicken and there is no monthly fee. The website gives more details about it.

The thing I like the best about IntelliPenny is that it keeps track of envelopes and your real bank accounts (like a check register). The envelopes are setup under a main account (checking). When you look at your checking account register it shows three balances: your actual account balance, a sum of your envelope accounts, and an available balance. The available balance is the actual account balance minus the sum of envelope accounts. That way you always know how much out of your checking account is already allocated to an envelope.

The other feature I like is that it allows you to use your credit card like a debit card. You set the credit card up under the main account and any transactions on the credit card are deducted from checking. So at the end of the month when you get your credit card bill the money is already set aside to pay it off. I don't like using my debit card because I am afraid of someone getting access to my checking account, but I love the convenience of a card.

Hope this helps!

[72Tiger]

Originally Posted by Anthony Marrone

mvelopes seems to be the consensus around the web. The problem I have with the envelope system is that it seems too restrictive and reactionary. I understand that the system is built on a classic model where Ma and Pa actually would take money out of the envelope, but what happens when the grocery envelope is empty and you need milk? My budget system needs to be rigid enough so I can maintain a high-level of discipline with my spending, but flexible enough to account for ever-changing circumstances.

it doesn't ruin your budget to borrow/take money from another envelope.

[Linsey Knerl]

Mvelopes worked well for us. The problem we had was that we live in such a small town that our banks don't automatically link up to the software. We didn't even have online banking till much later than most folks.

If you are looking for a program that tracks everything down to the penny, and is a real-life electronic application of the envelope system, this does it. It's a little confusing to set up at first, but they have excellent customer service that can walk you through any problems. I also like that it's web-based, so I can track expenses from the road.
I reviewed the program recently on my website, you can see details here.

[Lynnae]

I like You Need a Budget. I'm a huge fan of both Mvelopes and YNAB, but YNAB is easier to use and less expensive.

I just wrote about tools for maintaining a budget here.