This App Will Digitize Your Cash Envelope Budget
The cash envelope budgeting method can be a very effective way to control your spending.
The premise is simple. You come up with spending limits for your variable expenses, like groceries, eating out or entertainment. Next, you fill up envelopes with cash to match what you’ve budgeted for each category.
As you shop throughout the month, you can only spend the amount of money in your envelopes. Once you’ve run out of cash, you’ve got to freeze spending until it’s time to fill the envelopes again.
There’s one significant flaw in this budgeting method though: What if you don’t shop with cash? Many people opt for online shopping or use a debit or credit card rather than dollars and coins.
Fortunately, there are ways to adapt the cash envelope budget for cashless shoppers. One of the solutions is to use a budgeting app, like Mvelopes.
In this Mvelopes review, we’ll explain how this app works to help you keep your spending in check.
What Is Mvelopes?
Mvelopes is a budgeting app from Finicity, a fintech company owned by Mastercard. It’s based on the cash envelope system, so all of the categories you set up in your budget are essentially your digital envelopes.
Mvelopes syncs to your financial accounts, so whenever you pay a bill, shop online or swipe your debit card, that transaction shows up in the app. The app uses bank-level encryption to keep your information safe.
Once you assign the transaction to its appropriate envelope, you’ll automatically see how much money you have left to spend in that category. And if you do happen to use cash for something, you can manually enter that info in the app.
New to cash envelope budgeting? Here’s how the cash envelope system works.
How to Get Started with Mvelopes
Mvelopes offers three tiers of service. Mvelopes Basic costs $5.97 per month or $69 per year and lets you set up your budget by syncing to all your financial accounts. The next step up is Mvelopes Premier, which costs $9.97 per month or $99 per year and includes access to the Mvelopes Learning Center and Debt Reduction Center.
The Mvelopes Learning Center has online video lessons on topics like mastering your spending, creating an emergency fund, insuring your future, home buying and how to have stress-free holidays. With the Debt Reduction Center, you get support to create a tailor-made debt payoff plan.
The app’s top tier of service is Mvelopes Plus. This plan connects you with a real-live personal finance trainer for one-on-one virtual sessions four times a year. You’ll also get higher priority customer service support. Mvelopes Plus costs $19.97 a month or $199 a year.
Although there is no free version of Mvelopes, you can sign up for a 30-day free trial of Mvelopes Premier — the app’s most popular option — to test out the service with no financial commitment.
The Pros and Cons of Mvelopes
Mvelopes can sync with over 16,000 financial institutions, so most users can track their spending with minimal effort. Keeping your spending in check means you can free up more money to go toward saving or debt.
According to the company, Mvelopes has helped users save an average of $6,175 and pay off an average of $17,425 of debt.
One disadvantage of this app, however, is that it’s not free, like the budgeting apps Mint or Clarity Money. Also, if you’re looking for a tool that tracks more aspects of your financial life, such as your net worth and where you stand with your investments, you might want to consider an app like Personal Capital.
Who Is Mvelopes For?
The Mvelopes app is a great option for fans of the cash envelope method who are looking to digitize their money management.
It is also a good choice for people looking to nix overspending, because the app keeps you up-to-date with how much funds you have left to spend in each budget category.
Additionally, Mvelopes can help you boost your personal finance knowledge via online courses or pay down debt with a tailored payoff plan.
By signing up for the free 30-day trial, you’ll have a month to decide whether Mvelopes is the right choice for you.
Nicole Dow is a senior writer at The Penny Hoarder.