I often get asked for tips or advice on how to stay within the envelope balances as you progress through the month.  When I am asked that question, I typically reply by asking how often they are logging in to Mvelopes.  Generally the people who are having the most trouble staying within their envelope balances are also not logging in very often to the application.

Therefore, my first tip is to log in more often. The more often you log in to Mvelopes, the more in touch with your spending you are.  I typically log in to the application 3-4 times a week.  I generally only have a couple transactions each time I log in, so it only takes me a matter of seconds to assign them to their appropriate envelope spending accounts.  I then review my discretionary envelope balances (Such as groceries, fuel, dining out, entertainment, etc.) and log out.  It’s quick and easy, yet I always know what my envelope balances are so that I can focus on spending within the balances.

The next tip would be to manually assign your transactions for your discretionary envelopes.  The automatic transaction assignment feature is great, but if used too much, you can get out of touch with your spending habits.  When you manually assign your transactions to your grocery envelope, for example, you see the balance in the envelope change each time you assign a transaction.  This visual reminder can help you to remember what your balance is and help you focus on staying within the balance.

Mobile access is another way to stay in close contact with your spending and your envelope balances.  If I am in doubt about one of my envelope balances, I simply log in on my mobile phone and double check.  If you do not have Internet access on your mobile phone, it may be helpful to print out the Current Envelope Balance Report and slip it into your purse, planner, wallet, etc.

The other challenge of course can be staying committed to not overspending, even when the envelope balance gets low.  If you spend more than what is in your envelope, you are spending money that you thought you had set aside for other purposes… that could mean you won’t have the money to pay the mortgage, the insurance payment, go on vacation, or even buy holiday gifts.

It’s not always easy to skip a lunch or dinner out, or not run to the grocery store when you want to pick something up, but the only way an envelope system will help you improve your financial position is if you spend within your means, and that means sticking to the envelope balances.  So, if the grocery envelope is just about empty, try making dinner for a few days out of what is in the pantry or the freezer.

-Jennifer, Money for Life Coach

Some companies, or financial institutions, charge fees to use their online bill pay services. Obviously they want you to use it so that they can make money.  Usually the fees are fairly small, and when you factor in the money you pay for stamps if you are still mailing your bill payments, it may even be saving you money.

Others offer an online bill pay service as a convenience, because they are hoping to increase your loyalty to their financial institution or company.   Increased loyalty typically means that you would be less likely to switch to another service, bank, credit union, etc.

Mvelopes offers an online bill pay service as part of our Mvelopes Personal service because we want you to be a loyal, long time customer. We also offer online bill pay because, and perhaps more importantly, it makes managing your spending easier and more convenient.

Mvelopes Bill Pay is a fully integrated part of your Mvelopes Personal Application.  You can pay your bills and immediately see the pending transactions that have been scheduled to go out.  This information allows you to see the immediate effect on your envelope balances, each time you pay a bill.  You can also set up automatic bill payments, which means you spend less time each month paying your bills. I for one and in favor of anything that reduces the time I have to spend paying bills each months.

My favorite part of Mvelopes Bill Pay, however, is that you can make payments to anyone, including individuals.  I use this feature all the time to send money to family members or friends that I owe money to for one reason or another.  It’s very convenient, especially since I don’t carry a checkbook with me, and very rarely have cash.  Just the other day, someone from the office picked up lunch for me and brought it back to the office.  I then realized that I didn’t have any cash to pay him, so I simply went into Bill Pay and sent him a check for the money that I owed him.  It was simple and easy, and he had the check within just a couple days.

-Jennifer, Money for Life Coach

Ryan and his beautiful family

Ryan, from South Jordan, Utah, recently submitted the following comments about his appreciation for Mvelopes.  Ryan said:

We have been using Mvelopes for nearly a year. We absolutely love it! We spent several months researching various web applications that claimed to offer the best budget application. As we reviewed various other options, we found ourselves coming back to Mvelopes. Using Mvelopes has allowed us to manage our monies more effectively. We are now saving more each month and expensing our monies based upon specific priorities. It is good to be back in control. We love the flexibility to create a number of folders that make sense to us. You have created a great product that we hope to use for some time to come. Every chance we get, we tell others about what Mvelopes has to offer. We are thinking of having Mvelopes be our new wedding gift for friends/family getting married. What a great way to start off a marriage! Thank you for your product!

Last week, I had the privilege of speaking with Ryan and, during our conversation, he answered the following questions:

Q:  How long have you been using Mvelopes?

A:  Just short of a year.

Q:  How has Mvelopes assisted you in living within your income?

A:  It has been instrumental.  We have always been able to live within our means, but it has allowed us to save in ways that we haven’t been able to in the past.  We recently used Mvelopes as a budgeting tool as we worked to finish our basement.  As we worked on the project, we were able to focus specifically on line items, so that we didn’t overspend in any one area.

Q:  How much consumer debt have you been able to eliminate during that time?

A:  Zero.  We do not have any consumer debt.  However, I must say that using Mvelopes has kept us from taking on any debt.

Q:  How much have you been able to save while using Mvelopes?

A: We actually had some savings set aside prior to use Mvelopes, but we’ve gained efficiencies as we’ve managed our money more productively with the tools Mvelopes provides.  As we’ve saved, we’ve used those funds to complete the basement project, which has been great.

Q:  How much has your average checking account balance increased while using Mvelopes?

A: Overall, we’ve netted an increase of about $300 a month.

Q:  What financial goals have you achieved while using Mvelopes?

A: The biggest financial goal we’ve set (aside from finishing the basement) is to take a vacation–this time, without the kids.  We have taken our additional savings and put it in a vacation envelope.  We’re heading to Southern Utah (somewhere we’ve never been) and we’re going to spend just under a week there.  Like most people who use Mvelopes, we have had a goal to save additional money each month and be more “saving minded” and we’ve been able to do that more than we actually thought we’d be able to.  Then, of course, there’s the “finishing the basement” project that I mentioned earlier.  We had some money already earmarked and set aside, and we used those funds as a base for the project.  We then set up sub-envelopes within that project to help track the expenses (bathroom, plumbing, electrical, sheetrock, etc.) and we were able to easily identify areas where we could save, which also kept us from spending more money than we should.

Q:  What are your next financial goals?

A: I assume that the vacation we will soon be taking will be a success and we’d like to make that more than just an annual thing–maybe even a couple of times a year.  We’re also saving for our children’s education and other home improvement projects.

Q:  How many envelopes have you created?

A: When we were working on the basement construction project, we had 110 envelopes, but we’ve since scaled back and are now using 65 envelopes.

Q:  How has Mvelopes helped to reduce financial stress?

A: We are probably somewhat unique, I guess, because we don’t really have any debt other than our home, but we’ve been able to identify in a moment where our money is going and how much we have left.  Although we’ve used many other programs, we’ve never had one that would help us forecast where we’re going to be spending our money.  Other programs were helpful to show us where our money was going and how it was being spent, but with Mvelopes we can look ahead and proactively make decisions about our future spending.

Q:  If married, how has Mvelopes helped you better collaborate with your spouse?

A: My wife and I have always worked fairly well together in terms of finances, but this tool has provided an opportunity for the two of us, on a regular basis, to discuss our finances.  We have a weekly “Mvelopes meeting,” which is what we call it, and during that meeting we assign transactions and make sure that we’re still on track.  It also helps us openly communicate about our spending so that one person doesn’t make a financial decision that the other person doesn’t know about and ought to know about.

Q:  What advice would you give to new Mvelopes users?

A: To use the product often and encourage others to use it.  I can’t tell you the number of people that we’ve referred to Mvelopes–mostly family and friends.  You have to use it to really understand its true value.  If we don’t access it frequently, then we lose some of its value, so my advice would be to use it as often as you can for whatever financial goals, opportunities or challenges you may have.

Q:  If you could create a “tag line” for Mvelopes–keeping in mind what it’s done for you–what would the tag line be?

A: The first thing that comes to mind is that it is the only web-based money management application.  There aren’t any others that compare.  As I mentioned earlier, others track expenses, but Mvelopes takes it a step further and allows you to literally put money aside for future expenses.

It was a privilege to speak with Ryan.  His excitement over recently finishing their basement and setting aside funds for a much-needed vacation was contagious.  It got me thinking about all the things I could do if I really set my mind to it.

Ryan, thank you for taking time to speak with me, for sharing your experiences with us, and for recommending Mvelopes to your friends and family members!  We wish you and your wonderful family continued financial success and much happiness.

Bethany and her beautiful family

Yesterday, I had the privilege of conducting a telephone interview with Bethany from Florence, Arizona.  Bethany and her husband are the proud parents of a three-year-old boy and they will soon (next week) be leaving for Ethiopia where they’ll be adopting a baby girl.  During our interview, Bethany shared how helpful using Mvelopes has been in not only helping them save the money they need for this adoption, but in managing their day-to-day living expenses.  She discusses how Mvelopes is unlike any other budgeting program she has ever used before.

Bethany sent us the following information in an e-mail message (which prompted my call): 

Prior to using Mvelopes, we had tried many other budgeting software programs, but always found ourselves perplexed in regards to how much money we actually had in each budgeted area. It seemed it was never cut and dry, or up to date with what was occurring in real-time. Mvelopes has been a life-saver for us in allowing us to find out how much money we have remaining in a particular area, right when we need to know. We love that we can be out running errands and use our cell phones to find out if we have money left in our “eating out” envelope, to decide whether or not we will stop for lunch. It always used to just be a guessing game. Next week we are leaving to travel to Ethiopia to bring home our adopted daughter. Thanks to Mvelopes, we were able to succesfully budget for all of our adoption expenses and come away from the process debt-free. We were also able to track our expenses throughout the lengthy adoption process, in a way that will allow us to easily file for the federal adoption tax credit. So thank you Mvelopes, for helping us bring our daughter home and helping us to run our finances, instead of allowing our finances to run us!

Please continue reading to learn more about Bethany’s Mvelopes experience (she answered the following questions during our telephone conversation).

Q:  How long have you been using Mvelopes?

A:  I think it’s been two years–possibly a little less.

Q:  How has Mvelopes assisted you in living within your income?

A:  I think the main way it has assisted us is just being able to see exactly how much money we have in each area of our budget at the exact time we need to know (it’s always up to date and current).  We have always budgeted, but this program has really helped us.  It’s just different from other programs we have used.  The unique feature of Mvelopes is that the money has to come in before there’s money to fund the envelopes.  If we’re making a decision to spend money and Mvelopes tells us the money is there, then we have confidence knowing that it’s really there to spend.

Q:  How much consumer debt have you been able to eliminate during that time?

A: We haven’t really ever carried debt.  We do have a couple of school loans and we’re working to pay those off, but we never carry credit card debt.  We also have a mortgage and an auto loan, and Mvelopes really helps us budget for those payments.

Q:  How much have you been able to save while using Mvelopes?

A: We have a goal to save at least 10 percent of our gross income and, when we first set up our envelopes, we designated an envelope for that 10 percent savings.  We’ve always been able to save at least that much.  We have a new motivation to save even now, too.  When our son was two-and-a-half years old, we started thinking about having more kids.  Ultimately, we want more kids to love.  Through a set of circumstances, we really felt called to adopt.  My husband is a pastor and we both have a strong Christian faith.  It felt like what we were supposed to do.  We did a lot of research on various ways to adopt and we decided to adopt from Ethiopia and officially applied to our agency one year ago.  We worked on the paperwork for about six months, then received a referral, and were sent photos of our little girl.  After reviewing her file, we knew that this was what we were supposed to do.  When we first decided we were going to adopt a baby, we looked at our entire budget again and knew that we’d probably need to dip into that 10 percent savings envelope, but we also created an “adoption savings” envelope and have been able to save even more.  We have been able to save close to $15,000 in just the last year.  We’ve had fundraisers, garage sales, etc., to help us to get into a better financial situation so that we could manage this adoption without going into debt.

Q:  How much has your average checking account balance increased while using Mvelopes?

A: Maybe by about $1,000 a month.

Q:  What financial goals have you achieved while using Mvelopes?

A: Well, our biggest goal has been saving for the adoption.  We set up ahead of time just how much each stage of the adoption process was going to cost.  We have a tax credit that we’ll be able to apply for this coming spring and our initial goal was to save above and beyond what the tax credit would be.  When all is said and done, we will be debt free for this adoption.

Q:  What are your next financial goals?

A: We are looking at possibly going to one income (we both work right now and we’re hoping to make it so that I can stay home with the kids in a year or so).  As we review our finances and look at our options, that’s something we’re considering.  We hope to be able to have more kids in the future, too.  We also enjoy being able to give to people or things when opportunities come up and we want to continue to be able to give!  We never want to feel that our finances are so restricted that we can’t give to worthy causes.

Q:  How many envelopes have you created?

A: The total number of envelopes we currently have is 52.

Q:  How has Mvelopes helped to reduce financial stress?

A: I think, in marriage, finances can be one of the biggest triggers of fights or arguments.  Part of the stress often comes as a result of simply not knowing where you’re at financially.  When there are questions about whether we have enough to spend on something, we now have a neutral place where we can get that information.  Taking away the unknowns and eliminating the “guessing game” has been very helpful.

Q:  If married, how has Mvelopes helped you better collaborate with your spouse?

A: We are a team.  We came up with the budget together.  We decide how much we’ll put in each envelope.  If I stop working, we’ll know just where we’re at and what that will look like.  We are able to look at things objectively without anyone having to be the bad guy.

Q:  What advice would you give to new Mvelopes users?

A: Be committed to the goals that you set.  Decide what your goals are and create the appropriate envelopes.  When you spend, make sure that you have the funds to do what you want to do, without affecting your goals.  Don’t overspend.  In the end, you’ll really see the benefits pay off.

It was a privilege to speak with Bethany and to learn a little bit about what is going on in her life.  It is definitely an exciting time for her and her family as they prepare to bring their baby daughter (and sister) home from Ethiopia.  Bethany, thank you so much for taking time to share with us the many successes you are enjoying.  And thank you, too, for sharing with us the powerful message that when you have dreams that you want to accomplish, you don’t need to go into debt to make them happen.  We wish you and your family continued success and much happiness.

My Auto Registration envelope is actually named “Auto Registration (November).”  This way I know when the bill is due and can keep a close eye on how I am doing with my savings goal.  You, of course, could also add in the amount of the bill to the envelope name if you like.  An envelope name like “Auto Reg. (Aug $150)” provides a great deal of detail that can be helpful when reviewing your envelope spending account balances.

The same type of naming can be useful for your monthly bills, such as utilities bills.  You could include, for example, the date the bill is due to help you remember when to pay it (in the event that you do not have it set up with an automatic payment.)   Including the amount of the bill may also be helpful for the bills that do not tend to fluctuate (i.e. cable/satellite, phone, etc.) from month to month.

One of my coaching clients today asked if there was a way to include notes in the envelopes about what you are setting aside money for.  There really isn’t a way to create a note, but she found the idea of adding information to the envelope names very helpful.  She was having trouble remembering when her property tax bills are due, so she added the months to the envelope name and problem fixed.

Please share any tips that you may have for customizing your envelopes, naming them in a more effective way, etc.   It’s always great to hear what methods others use.

-Jennifer, Money for Life Coach

I often suggest that they start by eliminating everything except their required expenses, both monthly and periodic.  Once you know how much you need for your mortgage, utilities, taxes, insurance payments, auto registration, minimum debt payments, etc. then you have a clearer vision of how much you can spend on the discretionary areas.

After you have entered all of your required expenses, you can clearly see exactly how much income you have left to spend on the discretionary areas of spending by looking at the difference at the bottom of the spending plan window.  Depending on what this amount is, you may want to explore options for lowering some of your bills.  Here are a few ideas

• Changing plans on your cell phone, home phone, cable or satellite, etc. can help to lower costs.
• Sometimes asking your credit card companies for lower interest rates will help to lower your monthly debt payments.
• Installing a programmable thermostat can help to lower your utilities bills.

When you are ready to start making allocations for your discretionary spending, start with the most important things first (i.e. groceries), and then go down the list from there.  When making your allocations, be sure to keep a close eye on the balance of how much you have left to spend.  In order to stay balanced, you may need to make some hard decisions to reduce spending in certain areas, or put other items on hold for a while.   These are not easy decisions to make, but living above your income will continue to jeopardize your financial future.

Once you have gone through all the areas of spending, if you truly do not have enough income, you may want to look at some ways to increase it.  Perhaps taking on a part-time job for a few months, or selling some items that you don’t need any more.

It’s not always easy to live within your income, but spending less than you make on a consistent basis is the only way to improve your financial position and create a stable financial future for you and your family.

-Jennifer, Money for Life Coach

So, how do you handle payments to a credit card that isn’t available for aggregation with Mvelopes?  There are a couple different ways to do this, but here is my preferred method.

I have one card, a Banana Republic (BR) card that won’t sync up with Mvelopes.  I don’t use the account very frequently, but when I do, I simply mentally deduct the amount of my purchase from my clothing envelope.  This way I know how much will be left in my clothing envelope after I pay off the BR card. In the event that I have another clothing purchase to make, I now know how much I have left to spend.

When I get home from shopping, I log into Mvelopes Bill Pay and make a payment on my BR card for the amount of my recent purchase.  When the bill payment transaction clears (usually just a couple of days), I simply assign the transaction to the Clothing Envelope.

It’s a little bit of a round-about way to handle it, but it works fairly simply and just take a few extra minutes.   This way I can still use my card and get the points that go along with my purchases, but I am also sure to pay off my balance in full each time I use the account.

- Jennifer Streiff – Money for Life Coach

[photo courtesy of flickr / CC BY 2.0]

It’s great to automate your spending management and reduce the amount of time that you spend assigning transactions, but it’s also important that you stay in close touch with your spending levels and envelope balances.  Our Money for Life Coaches are often asked for tips on how to keep better track of their envelope balances; This can be extra challenging if you auto-assign all of your transactions.

The auto-assign functionality is perfect for transactions such as your mortgage payment, utilities bills, insurance payments, etc.   These envelopes are often funded with the exact amount of the bill, and assigning one transactions usually will take the balance to zero.

However, for discretionary envelopes (such as groceries, dining out, fuel, or entertainment), the process of assigning transactions manually to each envelope can help you to keep better track of your spending and envelope balances. When you manually assign the transaction, you can see the balance reduce with each and every transaction.  This process can be valuable in creating heightened awareness of your current envelope balances.  This awareness will also help you to plan ahead better for the expenses that you still have coming during the month. Knowing exactly how much you have left to spend and how long it needs to last, are keys to making the envelope budgeting system work effectively.

- Jennifer Streiff

[photo courtesy of flickr / CC BY-SA 2.0]

NEW FEATURES:

• Mortgages and Loans in the Debt Center
You can now add your mortgage and loan accounts to the Debt Center and include them in your Debt Roll-Down Plan. You will be required to enter additional information for mortgage accounts in order to accurately apply only the principal and interest as the Planned Payment for debt roll-down and payoff calculations.

Even though you will be able to add mortgage and loan accounts to the Debt Center, transactions for these accounts will still not be downloaded or appear in the New Transactions register. However, all you will need to do is simply assign the payment transactions that you get from your Checking account (or whatever account you would make payments to these types of accounts from) and assign them to the associated debt envelopes. Then, the matching deposit transactions for these payments will be created for you in the Debt Register for your mortgage or loan accounts in the Debt Center and adjust your Current Balances accordingly.

Plus, if your mortgage or loan happens to be added as an offline account, that account balance will automatically be updated in the Net Worth and Account Manager windows as well, no longer requiring you to manually update the account balance for those offline accounts.

To learn more about mortgages and loans in the Debt Center, click on the support icon within the application and search for the keywords “mortgage & loan.”

• Debt Registers
We have added an additional tab in the Debt Center called Debt Registers. This tab will list all of your debts, their individual totals for Payments and Interest Remaining, as well as the associated account registers.

For Credit Cards and Lines of Credit, these account registers will be the same as the ones in the main screen of the application. But the account registers for mortgages and loans will list the matching Debt Transactions that are created for you when assigning payments to these accounts.

To learn more about the new Debt Registers tab in the Debt Center, click on the support icon within the application and search for the keywords “Debt Registers.”

• Finance Charges Envelope
We have implemented a Finance Charges envelope to better handle the finance charge transactions that you get if you are carrying a credit card balance from month to month.

The Finance Charges envelope is automatically created when you add a credit card or a line of credit to the application, and it cannot be deleted. It is simply a place for you to assign your finance charges and keep track of how much you are paying to carry a balance on your card or line of credit.

When you assign a finance charge to the finance charges envelope, the application will automatically transfer funds from the money for envelope to the finance charges envelope. This however, will not affect the balance of your money for envelope. The system will recognize that out of your most recently funded payment to that particular card or line of credit, this finance charge was included, and it will automatically account for the finance charge without any additional effort on your behalf.

• Beta Feedback
We would still love to hear any feedback that you might have on this beta release of the Debt Center, especially now with the ability to add mortgages and loans. Just click on the “2 Cents” icon in the top right corner of the Debt Center window and send us your suggestions!

PERFORMANCE ENHANCEMENTS:

• Backend and Frontend Systems Improvements
We continue our efforts to improve our backend and frontend systems to help provide a better support and overall product experience. With this release we have made improvements that have sped up the loading time as well as the response time of the application.

• Debt Center Enhancements
We have tried our best to include some fixes and enhancements that were submitted to us through the “2 Cents” feedback icon in the Debt Center.

We have included an optional automatic debt roll-down within the Spending and Funding Plans as debts in the Debt Center are paid off. This option will be displayed to you when the account register balance of a debt reaches $0.00. By opting to have us automate the debt roll-down for you, the allocations for the associated debt envelope will be re-allocated to the Extra Debt Payments envelope. That way the money used to make payments for the paid off debt can now be routed to the next priority debt in the Debt Center.

We have also fixed some of the calculations in the Debt Center that were reported to be off, like the One-Time Payment that is part of the “What If Scenarios” section.

Remember, please continue to send us your feedback and suggestions on the Debt Center by clicking on the “2 Cents” icon in the top right corner of the Debt Center window.