The Modern-Day Version of Envelope Budgeting: Kaiku, a Prepaid Visa Card

When’s the last time you opened a bank account and expected it to be free? It always seems like there’s a hoop to jump through. If you don’t want to pay a lot of fees to store your cash, you’ve got to make a lot of debit purchases. Or you have to keep a ridiculously high balance to have that fee waived.

The average person pays about $150 a year to keep a bank account in good working order. Wouldn’t it be nice to have a cheaper option?

Well, I found one. This spring, I tested out Kaiku. This prepaid Visa card is aimed at tech-savvy Millennials — you know, those of us who don’t know how to balance an old-fashioned checkbook, but regularly check our account balances on our phones.

If you’re a smart spender who doesn’t want to be tied to a stuffy bank, Kaiku might be for you.

Kaiku’s Like a More Modern Wallet

My favorite use for Kaiku is an update on the old envelope method of budgeting. With the envelope method, you stow cash away for a specific purpose — maybe you’ve got one for home repairs and another for trips to the movies. By physically putting cash away, you only see it when you need it for its designated purpose, so you’re not tempted to spend it elsewhere.

That’s what Kaiku is great for. Think about something you spend money on, but don’t want to use cash for: books for your Kindle, or big sales at your favorite online shop. For me, it’s when I eat out.

It’s easy to load your Kaiku card with your budget for a week, month or even a year of that fun thing you really love, to make sure you don’t over-spend. Knowing you have a designated fund for that activity or hobby means one less aspect of your budget to worry about.

A Simple Sign-Up Process

Signing up on the Kaiku site only takes about five minutes. The toughest part is probably picking your card color: teal, pink or another of the six colors available.

Once you choose your color, it’s a matter of supplying your Social Security Number and address to get started. Your card will arrive in about a week — but you’re not ready to roll quite yet.

How to Prepare for Prepaid Life

You can’t start that spending spree until you’ve loaded your Kaiku card! You have several options:

• Direct deposit: Your Kaiku card comes with a direct deposit form you can hand right over to your HR department. Choose to put all of your paycheck or a portion into your account, then get ready to rest easy — there’s no fee for direct deposit.

  Even if you already have direct deposit with a regular bank account, this feature comes in handy. If you want to set aside a certain amount (and only a certain amount) for fun stuff like coffee shops or a hobby, allocating a portion of your pay to this card automatically will help you keep your personal expenses in line.

• Personal check: The Kaiku app for Apple or Android makes it easy to upload a personal check — and it’s one of the few prepaid cards that lets you deposit money this way. Snap a few photos, and you’re good to go.

  But pay attention to your options for how fast you want your money. If you’re willing to wait 10 days to access that cash, your deposit is free. If you want that money right away, you have to give up a small percentage of the funds for your convenience. The minimum charge to load a check and have immediate access to it is $5.

• Deposit cash: This one’s perfect for jobs that leave you lugging around tons of small bills, like bartending or busking. Just check the app for your nearest Visa ReadyLink location, like a MoneyGram, and ask the cashier to do a ReadyLink load. He’ll swipe your card, you hand him your cash, and you’re out of there in a flash. Kaiku doesn’t charge a fee for loading your cash, but you’ll have to pay Visa ReadyLink a fee of about $3 to $5.

• PayPal: If you’re an eBay or Etsy seller, you’ll want to pay attention to this one. You can add your Kaiku card as a bank account on PayPal. Simply transfer PayPal funds onto your Kaiku card and get ready to put those earnings to work for you.

Tips for Managing Your Money

Kaiku has just a $3 per month maintenance fee (the fee is waived if you direct deposit $750 or more each month) — so much better than the $15 or so at your bank — and with different options for loading your card, all you need to do is fire up your card.

I’ve found Kaiku to work seamlessly at the register, even with temperamental card swipers at coffee shops and takeout counters. The app’s QuickLook feature lets you see your balance and recent purchases without even logging in, so it’s easy to see how much you spent, and where you spent it, while you’re on the go.

You’ll always see your balance front and center when you log into the app, and a “Funds-Ometer” at the top keeps an eye on your spending. If you suddenly begin using your Kaiku card constantly, the meter will go into the red — a gentle reminder to slow down! So when it’s only the 10th of the month and you’re already close to hitting your takeout budget, you know it’s time to start cooking at home.

And if you want to check up on your spending the old-fashioned way, you can always log into your Kaiku account online.

What’s the Catch?

There really isn’t much of a catch, as long as you plan ahead to load your card. If you don’t want to pay the check deposit fee, then plan ahead so you don’t need that cash in a rush. There’s no way around the ReadyLink or MoneyGram fee if you want to deposit cash, but you can minimize those costs by depositing one large amount each month rather than several small deposits. Either way, you know what you’re going to be charged, so no secret fees will creep up on you.

It’s all about planning ahead and being aware of how much money you need on hand at any given time. And if you end up needing to pay for convenience to get your funds loaded right away? That’s fine. Sometimes paying a few bucks is still better than waiting in line at the bank.

Is Kaiku Worth It?

Kaiku doesn’t have the flashiest app with the most bells and whistles — it’s more focused on function — and you’ll definitely want to take a few minutes to get oriented on its website.

But this prepaid card does make it easy to start managing your money without living up to the scary expectations that some other options throw at you. Not having to keep a high account balance has got to be one of the biggest perks. You can adjust as you go and plan for your own needs for the week or month.

Your Turn: Have you tried the Kaiku card? What was your experience like?

Sponsorship Disclosure: A huge thanks to Kaiku for working with us to bring you this content. It’s rare that we have the opportunity to share something so awesome and get paid for it!