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If you’ve been researching ways to improve your finances, you’ve likely stumbled across an idea called envelope budgeting. Several top financial gurus, including Dave Ramsey, are proponents of this method. It’s a simple way to keep your finances under control and help prevent overspending. It’s something your grandparents may have done, and there’s a reason why — it’s effective.
But if you don’t relish the idea of having to keep all that cash on hand stuffed in various envelopes in your house, there’s a digital solution to your personal finance situation. It’s called Mvelopes, and it creates a marriage between the envelope system and the technology you’ve grown to love and depend on. Let’s look at what Mvelopes is, how it works, and whether it might be the right financial management system for you.
In this review:
Using a virtual envelope budgeting system, Mvelopes will help you divide your savings and expenses into specific categories (called envelopes). You’ll make a virtual envelope for anything you spend money on, including groceries, entertainment, student loans, gifts, fixed monthly expenses, and even credit card payments. How many envelopes you have and their categories are up to you.
Mvelopes will also encourage you to budget for larger expenses that only come up occasionally, like holiday gift-giving, vacations, or anything else you may be saving for. It’ll allow you to save some money for those goals each month so you’ll be ready to plunk down the cash for those expenses when they happen.
By seeing what you have coming in and going out, you may feel inspired to cut down on what you’re spending and beef up what you’re saving. And by asking what your goals are, the program helps you define what’s important to you and leads you on a path to getting there.
How to Use Mvelopes
Mvelopes isn’t a free service, but the basic plan is highly affordable and will likely save people much more money than it costs — if it is utilized properly. It costs $4 per month, but if it is paid annually, you are only charged for 10 months.
With the Mvelopes Basic plan, you’ll get digital envelope budgeting, account balance monitoring, interactive reports, live chat support, and auto transaction importing/live transaction syncing to help you reach your financial goals.
The Mvelopes Plus plan costs $19 a month, but you’ll get two months free if you pay annually. Along with all the basic Mvelopes features, you’ll receive a quarterly check-up from an Mvelopes personal finance trainer, debt reduction tools, 1-on-1 setup assistance, access to the Mvelopes Learning Center, and high-level priority support.
The complete plan costs $59 per month, with the same two-months-free deal if you pay annually. You’ll get all the features of the plus and basic plans as well as other financial planning tools, such as monthly sessions with a personal finance trainer, accountability and motivation, a trainer-guided financial education, and a customized plan.
With all these plans, you also get a free 30-day trial to see if this service works for you. So you aren’t risking anything by giving it a chance for a month.
Here are the steps you’ll take to use this service:
- First, you’ll sign up online and decide which plan you want.
- The second step is adding your bank accounts. You’ll want to link your main checking account for bill paying to your Mvelopes plan, but you can also connect savings accounts or any others you think should be included.
- Then you’ll add in your income. If you don’t have a fixed income because you’re a freelancer, you can change your income to reflect that fluctuation.
- Next, you do the fun part — creating your envelopes.
- You’ll fund the envelopes by throwing part of your balance toward them with every paycheck. Each month, watch to see how you are doing.
When it comes to selecting the plan you want, you should look at the main features offered by each and decide what’s important to you. If you love the idea of getting a checkup from a personal finance trainer, you’re going to have to spring for more than the basic plan.
But if you’re a go-getter who’s already well-educated and motivated when it comes to your money, you might be fine with the basic plan. That will give you access to the star of the show when it comes to Mvelopes — the digital envelope system.
The Pros of Using Mvelopes
There are several great aspects about using Mvelopes.
- It’s intuitive and straightforward, which cuts down on frustration and makes you more likely to keep using the service to better your finances. And the best financial system is one that is frequently used because it keeps you on track.
- It may help with your peace of mind if money management is a stressor for you. If it helps you create an emergency fund or have Christmas money saved up by August, it could save you some sleepless nights.
- It has three plans that can work with different budget levels.
- Mvelopes is available via mobile app, so you can stay on top of your budget on the go.
- It may help you better plan and budget for mid-range goals such as vacations or buying a car with cash instead of payments. Since it helps you think ahead when it comes to your goals, you can stay more focused on what you want to achieve.
The Cons of Using Mvelopes
There are a couple of drawbacks to using Mvelopes, but you may find the benefits far outweigh them.
- There is no free version. The basic plan is the cheapest one available at $4 per month. It might not have enough features to help everyone unless they have a lot of drive to improve their finances.
- It’s not as comprehensive as some other financial services because you can’t use it for bill payment or investment monitoring. If you’re looking for a system to monitor and improve your retirement accounts, you’ll have to keep searching.
- There is a fair amount of work involved with this system because you’ll have to enter a lot of data manually. That’s not necessarily a bad thing because it will help you track trends, such as an envelope where you’re consistently spending more money than you should. But you should go into it knowing you’ll have to do some work — it’s not an automatic, set-it and forget-it system.
If you have used the envelope budgeting method in the past and it worked for you — or you want to give it a try but are leery of keeping that much cash around or constantly running to the bank to make cash withdrawals — Mvelopes may be a good bet for you. It’s a solid system when it comes to creating unlimited envelopes, getting your finances organized, and targeting trends that are sinking your financial plans.
To get started, consider signing up for the basic plan to see how it works for you. If you find it useful, take a look at the additional features that come with the more expensive Mvelopes plans. You may want to upgrade and see if the extra features are worth the money.
Author: Shannon Serpette