Mvelopes

My friend Toby came across this really interesting system for budgeting called Mvelopes. It's based on the idea of budgeting by using cash and splitting that cash across many envelopes, each titled things like Food, Mortgage/Rent, Utilities, Gas, etc. By budgeting in this way, it's easier to see when the money is running out and you have to figure out which envelope you might be able to pull money from to compensate for another envelope that is out of money. It's a method to keep people from getting into debt by using credit cards, etc. Mvelopes takes this idea one step further by putting everything in an online account that "talks" to your bank account(s), credit card account(s), etc so everything is linked and you can easily see where your money is going without dealing in cash and physical envelopes.

We started using the system recently and so far, love it. It forces us to make decisions about our activities and we can now save more money every month. The money seemed to just "disappear" before but now we're forcing ourselves to pay very close attention to every dollar that goes in or out of our accounts and envelopes. We've also budgeted for a lot of the things that usually catch us by surprise, like vehicle maintenance and home repairs, so hopefully this will help with what seems to be a never-ending flood of surprise expenses. Mvelopes also takes the guilt out of spending for me. I'm unfortunately one of those people that always feels guilty when I go shopping because I feel like money is tight and I shouldn't be shopping for anything that I don't really need (even if there is disposable income available). But now I have a budget for clothes and another envelope for my miscellaneous spending so I don't have to feel bad about using that money to play.

I highly recommend it for anyone, and especially those of you that are living month to month and trying to figure out where all the money is going. It's also great for a numbers geek like me because I can see exactly how much we're spending in various areas of our lives.