Our latest success story comes from Barbara, who lives with her husband in rural Arizona. Barbara has this to say about her love for Mvelopes:
“I love Mvelopes! I discovered it on New Year’s Day last year (2008) and started my free trial right away. One of my intentions for the year was to build savings and manage my income more consciously. I was so excited about finding a system that would help me track expenditures using all the different tools (ATM, cash, credit cards, checks from several accounts, etc.). This was an answer to my prayers. I recommend it to anyone who would like to feel more peace about their finances.”
During a delightful conversation I recently had with Barbara, she provided the following additional comments:
Q: How long have you been using Mvelopes?
A: Just a little over a year.
Q: How has Mvelopes assisted you in living within your income?
A: That’s an interesting question, because I really didn’t feel that it was a challenge for me to live within my income-we had sufficient income for our needs. However, I found that I was spending everything I had each month, and not really doing much in the way of saving. Now I really think about purchases and ask myself, “What envelope would this come out of and do I have the funds to cover it?” and I find that my decisions for purchases and spending are quite different.
Q: How much consumer debt have you been able to eliminate during that time?
A: For quite some time, we have been in the habit of paying off our credit cards every month, so we don’t have consumer debt-just our mortgage.
Q: How much have you been able to save while using Mvelopes?
A: Oh, that aspect of our financial situation has been wonderful! We’ve saved $22,000 in less than a year, and that’s money we likely would’ve spent unconsciously. We initially established an “emergency fund,” but decided we didn’t like the negative feeling associated with the term “emergency,” so we changed our “emergency fund” to our “adventure fund.” We’ve also watched our self-employment and retirement funds grow. It has been a wonderful tool for funding these types of things. In the past, we put the majority of our tax refund into our retirement account, with few (if any) additional contributions throughout the year. Now we put money into our retirement accounts each and every month, and it has been great to watch these accounts build. We’ve saved an additional $5,000 in retirement funds.
Q: How much has your average checking account balance increased while using Mvelopes?
A: Our average checking account balance really hasn’t changed because we take extra money out of the checking account and put it into savings, retirement or other accounts. However, we did open an interest-bearing checking account (we are more aware of those kinds of things now and don’t want our money to just “sit” in an account). It’s fun when I even earn $3 in interest and can decide where I want those funds to go. It’s very reinforcing to see the money adding up in our envelopes. It’s very concrete. I’ve never used Quicken or any of those accounting tools, but I just love Mvelopes. Budgeting can be challenging, but the Mvelopes software makes it relatively easy.
Q: What financial goals have you achieved while using Mvelopes?
A: I set some financial goals for myself using Dave Ramsey’s “Seven Baby Steps for Financial Peace” (a program I found on the Internet near the same time I discovered Mvelopes) and, in just one year, I have been able to complete the first four steps, which are:
Step 1: Put $1,000 in an emergency fund
Step 2: Pay off all our debt except mortgage (there wasn’t much)
Step 3: Put 3-6 months’ expenses in savings
Step 4: Invested 15% of Income into an IRA account
Step 5: Establish a college fund
Step 6: Pay off your home early
Step 7: Build wealth and give!
The BIG one for us was Step 3. I had no idea where my money was going before Mvelopes and suddenly I was able to plan to save and, boy, did we save! My husband is totally supportive of using Mvelopes and really pleased with the results. We talk over big expenditures beforehand and we have a tool to set goals, weigh our options, and prepare for big purchases. We were able to take a fabulous vacation and totally enjoy ourselves without worrying about spending money on going out to a nice restaurant or going on a special day trip, because we had put money aside every month in our “vacation spending money” envelope.
We had just started working on Step 6 and had made a big extra payment towards principal. Then my husband had a change in his employment. My husband is now starting his own business and our focus has changed. We are still able to live well within our means and we’re able to look at our spending and funding plans, make adjustments, and see that we will be okay with just one income for a little while, if necessary. In addition, we feel relaxed because we always have those 3-6 months of expenses in savings, if we need it. We haven’t even had to touch it either, because we are keeping such good track of our expenditures.
Q: What are your next financial goals?
A: We’re looking to maintain-actually, not even touch-the “adventure fund” and completely live off our current income. As we look to build the new business, we want to get to the point where we’re making a profit. So, we’ve recently gone from a “steady” income to a less-predictable income. We are now making day-to-day decisions about our finances and it feels very manageable.
We are also looking to live a more sustainable lifestyle (we have purchased a wood stove, we use solar electric power, we have a generator). We’ve taken the money we’ve previously spent on diesel fuel and put it into propane tanks and wood. It is great to see where we can make adjustments, and to then actually make them, when needed.
Q: How many envelopes have you created?
A: We have about 60-70 envelopes. The envelopes budget tool is very versatile.
Q: How has Mvelopes helped to reduce financial stress?
A: Hugely! I have a way to keep track of what we’re spending and to plan what we want to spend. Prior to using Mvelopes, we felt out of control. My husband has recently decided to start a new business and we feel confident that we’ll be okay. One of our children who is in his 20s was borrowing money from us as he started out on his own, and it was a great tool to keep track of how much he had borrowed, how much he had paid back, etc. It really helped reduce the stress and helped us all keep track of the money we were lending him and it helped him be responsible.
Q: If married, how has Mvelopes helped you better collaborate with your spouse?
A: We now have the framework so that we can discuss all of our options and make decisions together. My husband and I definitely use all of our envelopes to budget.
Q: What advice would you give to new Mvelopes users?
A: In the beginning, I used the “live chat” feature often and it was very helpful. I also ordered the printed books and they were great references to have. I was initially suspicious of the security factor and was hesitant to give my bank account information, but researched it and felt comfortable.
Barbara and Ryan’s excitement and love for Mvelopes Money Management Software is contagious, as is their positive approach to life. I particularly appreciated when Barbara shared with me how they had changed the name “emergency fund” to “adventure fund.” We wish you the best on your continued life adventures!