You’re looking at 25 envelopes all with $0 next to them. Another envelope, the Income Cash Pool, has all your money. It only takes a few minutes to get from that point to tracking your purchases and keeping to your budget. But it can be a harrowing few minutes for anyone, especially if you just started your Mvelopes account.
Funding your envelopes takes what is in your account and allows you to divy it up between the envelopes you can create and edit. That way your envelopes reflect what you’re planning on spending. You don’t create envelopes and assign amounts to them to then check how you did at the end of the month, but to plan what you’ll be spending during the month and keep track from start to finish.
Initially, you need to put the money currently in your accounts into your envelopes so you’ll have money until the next time you get paid. If you have money in a savings account, put it in the savings envelope. If you want to split it up for specific purposes, create different envelopes and have one for vacation, one for your emergency fund and another for your planned home renovation in a year or so.
Place the money you’ll be using to pay bills and spend on a daily basis into the bills and everyday spending envelopes. That way you’ll be able to keep up with your transactions until you have everything set up and ready.
The most important part of funding is assigning every dollar a purpose, which means putting every cent available to you into an envelope. Whether it will get spent a few days from now or it will be in your emergency fund until an emergency happens, put each cent in an envelope.
Funding in the Middle of the Month
Until you have enough money saved in the bank that you can live one month ahead and spend money you already have on your expenses, you’ll be funding in the middle of the month whenever you get paid.
At this point, your funding of envelopes should mirror the budget you have set up. In setting up your funding, you’ll also be setting up when and how much you get paid and what expenses will be coming out of each paycheck. Once you have grouped your paychecks, you’ll be able to see when you can fund your different bills and debts as well as your saving goals.
When you have set up your grouped paychecks and assigned your needed amounts to each paycheck, you will have funding profiles based on those paychecks. Now when your paychecks show up in your inbox, you can assign them to your Income Cash Pool and fund based on the profile. Voila! Your money is ready to be used as you have planned.
Funding a Month Ahead
Most of us, especially those who are newer to Mvelopes, don’t have enough money saved up to live for a month on money already in the bank. When you get to this point, you’ll be simplifying your expenses even more.
Instead of funding as you get paid, you’ll fund once for the month and track your purchases on a monthly basis. Your paychecks will wait to fund the next month while you’re living off the money you already had put away.
Also by this point, your budget should be pretty consistent and you’ll know just what you need to watch out for when it comes to spending. Plus, you have at least a month’s expenses in the bank, so emergencies won’t be as stressful.
Once you have funded your envelopes you’re ready to assign transactions so you can keep to your budget and accomplish your financial goals. Mvelopes will help you spend less, save more and pay off your debt.
Mvelopes is an award-winning budget app that helps you set up a digital envelope budget so you can manage all your expenses, track your transactions and achieve your financial goals. Get started today with a free trial.