Budgeting: Mvelopes

For some of the more flexible items in our budget, like haircut money, clothes money, etc., we use the envelope system. I first learned about this budgeting method through Ruth Hayden's wonderful books, but many others tout this method as well.

How does it work? Well, for clothing, we budget $20/month, so I put $20 cash into a designated envelope every month. When I go to buy clothes, I can use the cash that is in that envelope, and no more. I could take some cash from the Met Opera envelope, but that would mean we'd miss an opera.

Some people use this system virtually. They set up spreadsheets and divvy up their paychecks that way, but don't have actual cash in hand. I've recently seen a product called Mvelopes that intrigues me. You pay a subscription (about $14/month), and it guides you into setting up your virtual envelope system. Mvelopes links to your bank, credit cards, 401k, etc., and it keeps track of your spending for you! The subscription also includes on-line bill pay, and some other cool features.

Although I'm not sure I want to give Mvelopes $14 every month, they do have a one month free trial that I WILL try, and then report back to you. It seems like a really cool idea!