Tips for living within your envelope balances

envelope_with_money2For many people, the biggest challenge to living within their means is keeping track of their envelope balances and staying within them.  It can be difficult to stay within your envelope balances, especially if you don’t always know that the balance is.

I often get asked for tips or advice on how to stay within the envelope balances as you progress through the month.  When I am asked that question, I typically reply by asking how often they are logging in to Mvelopes.  Generally the people who are having the most trouble staying within their envelope balances are also not logging in very often to the application.

Therefore, my first tip is to log in more often. The more often you log in to Mvelopes, the more in touch with your spending you are.  I typically log in to the application 3-4 times a week.  I generally only have a couple transactions each time I log in, so it only takes me a matter of seconds to assign them to their appropriate envelope spending accounts.  I then review my discretionary envelope balances (Such as groceries, fuel, dining out, entertainment, etc.) and log out.  It’s quick and easy, yet I always know what my envelope balances are so that I can focus on spending within the balances.

The next tip would be to manually assign your transactions for your discretionary envelopes.  The automatic transaction assignment feature is great, but if used too much, you can get out of touch with your spending habits.  When you manually assign your transactions to your grocery envelope, for example, you see the balance in the envelope change each time you assign a transaction.  This visual reminder can help you to remember what your balance is and help you focus on staying within the balance.

Mobile access is another way to stay in close contact with your spending and your envelope balances.  If I am in doubt about one of my envelope balances, I simply log in on my mobile phone and double check.  If you do not have Internet access on your mobile phone, it may be helpful to print out the Current Envelope Balance Report and slip it into your purse, planner, wallet, etc.

The other challenge of course can be staying committed to not overspending, even when the envelope balance gets low.  If you spend more than what is in your envelope, you are spending money that you thought you had set aside for other purposes… that could mean you won’t have the money to pay the mortgage, the insurance payment, go on vacation, or even buy holiday gifts.

It’s not always easy to skip a lunch or dinner out, or not run to the grocery store when you want to pick something up, but the only way an envelope system will help you improve your financial position is if you spend within your means, and that means sticking to the envelope balances.  So, if the grocery envelope is just about empty, try making dinner for a few days out of what is in the pantry or the freezer.

-Jennifer, Money for Life Coach

“You have to use Mvelopes to really understand its true value.”

Ryan and his beautiful family

Ryan and his beautiful family

Ryan, from South Jordan, Utah, recently submitted the following comments about his appreciation for Mvelopes.  Ryan said:

We have been using Mvelopes for nearly a year. We absolutely love it! We spent several months researching various web applications that claimed to offer the best budget application. As we reviewed various other options, we found ourselves coming back to Mvelopes. Using Mvelopes has allowed us to manage our monies more effectively. We are now saving more each month and expensing our monies based upon specific priorities. It is good to be back in control. We love the flexibility to create a number of folders that make sense to us. You have created a great product that we hope to use for some time to come. Every chance we get, we tell others about what Mvelopes has to offer. We are thinking of having Mvelopes be our new wedding gift for friends/family getting married. What a great way to start off a marriage! Thank you for your product!

Last week, I had the privilege of speaking with Ryan and, during our conversation, he answered the following questions:

Q:  How long have you been using Mvelopes?

A:  Just short of a year.

Q:  How has Mvelopes assisted you in living within your income?

A:  It has been instrumental.  We have always been able to live within our means, but it has allowed us to save in ways that we haven’t been able to in the past.  We recently used Mvelopes as a budgeting tool as we worked to finish our basement.  As we worked on the project, we were able to focus specifically on line items, so that we didn’t overspend in any one area.

Q:  How much consumer debt have you been able to eliminate during that time?

A:  Zero.  We do not have any consumer debt.  However, I must say that using Mvelopes has kept us from taking on any debt.

Q:  How much have you been able to save while using Mvelopes?

A: We actually had some savings set aside prior to use Mvelopes, but we’ve gained efficiencies as we’ve managed our money more productively with the tools Mvelopes provides.  As we’ve saved, we’ve used those funds to complete the basement project, which has been great.

Q:  How much has your average checking account balance increased while using Mvelopes?

A: Overall, we’ve netted an increase of about $300 a month.

Q:  What financial goals have you achieved while using Mvelopes?

A: The biggest financial goal we’ve set (aside from finishing the basement) is to take a vacation–this time, without the kids.  We have taken our additional savings and put it in a vacation envelope.  We’re heading to Southern Utah (somewhere we’ve never been) and we’re going to spend just under a week there.  Like most people who use Mvelopes, we have had a goal to save additional money each month and be more “saving minded” and we’ve been able to do that more than we actually thought we’d be able to.  Then, of course, there’s the “finishing the basement” project that I mentioned earlier.  We had some money already earmarked and set aside, and we used those funds as a base for the project.  We then set up sub-envelopes within that project to help track the expenses (bathroom, plumbing, electrical, sheetrock, etc.) and we were able to easily identify areas where we could save, which also kept us from spending more money than we should.

Q:  What are your next financial goals?

A: I assume that the vacation we will soon be taking will be a success and we’d like to make that more than just an annual thing–maybe even a couple of times a year.  We’re also saving for our children’s education and other home improvement projects.

Q:  How many envelopes have you created?

A: When we were working on the basement construction project, we had 110 envelopes, but we’ve since scaled back and are now using 65 envelopes.

Q:  How has Mvelopes helped to reduce financial stress?

A: We are probably somewhat unique, I guess, because we don’t really have any debt other than our home, but we’ve been able to identify in a moment where our money is going and how much we have left.  Although we’ve used many other programs, we’ve never had one that would help us forecast where we’re going to be spending our money.  Other programs were helpful to show us where our money was going and how it was being spent, but with Mvelopes we can look ahead and proactively make decisions about our future spending.

Q:  If married, how has Mvelopes helped you better collaborate with your spouse?

A: My wife and I have always worked fairly well together in terms of finances, but this tool has provided an opportunity for the two of us, on a regular basis, to discuss our finances.  We have a weekly “Mvelopes meeting,” which is what we call it, and during that meeting we assign transactions and make sure that we’re still on track.  It also helps us openly communicate about our spending so that one person doesn’t make a financial decision that the other person doesn’t know about and ought to know about.

Q:  What advice would you give to new Mvelopes users?

A: To use the product often and encourage others to use it.  I can’t tell you the number of people that we’ve referred to Mvelopes–mostly family and friends.  You have to use it to really understand its true value.  If we don’t access it frequently, then we lose some of its value, so my advice would be to use it as often as you can for whatever financial goals, opportunities or challenges you may have.

Q:  If you could create a “tag line” for Mvelopes–keeping in mind what it’s done for you–what would the tag line be?

A: The first thing that comes to mind is that it is the only web-based money management application.  There aren’t any others that compare.  As I mentioned earlier, others track expenses, but Mvelopes takes it a step further and allows you to literally put money aside for future expenses.

It was a privilege to speak with Ryan.  His excitement over recently finishing their basement and setting aside funds for a much-needed vacation was contagious.  It got me thinking about all the things I could do if I really set my mind to it.

Ryan, thank you for taking time to speak with me, for sharing your experiences with us, and for recommending Mvelopes to your friends and family members!  We wish you and your wonderful family continued financial success and much happiness.