Discovery Of Envelope Budgeting

Envelope Budgeting is the single best discovery I made for personal finances.  It gets right at the heart of my obsessive love for having a complete understanding of the financial picture I am in.  I know exactly how much money I can spend on whatever I am currently coveting.  Which can be annoyingly sobering but great for self discipline.

So what is it?  Its Grandma and Grandpa’s way of budgeting.  The basic concept is that each time you get paid, you put the money into a series of envelopes which represent different expense categories like rent, groceries, clothing, etc.  Then you only spend the money that is actually in the Envelope.  When you run out, you stop spending until you get paid and can fill the envelope again.

It works great because you cannot overspend you budget and end up in debt.

Now lets bring this 21st century.  No one is going to actually cash a check and put the cash into envelopes and then carry around a stack of envelopes.  That wouldn’t make much sense and it would be impossible to purchase anything on the internet.  So what I do is use a tool called Mveleopes.

If you google Envelope Budgeting Software you will find several.  What I really like about this one is the following:

  • Auto-Uploads transactions from bank/CC accounts
  • Great Smartphone App
  • Cloud Based
  • Easy to share with a spouse
  • Free for up to 25 categories

I spend maybe 5 minutes categorizing the transactions that upload every few days and then maybe an hour every quarter adjusting how much money to autofill to each envelope.

A lot of these Apps also do not support credit cards however this one does.  I am a big fan of credit cards provided you are not paying monthly fees or holding a balance.  The rewards are too large to turn away from.  More on the best credit cards later.

If you are struggling to get on a budget, want to save more money, want to get out of debt or just want to know what you are spending you money on then Mvelopes is the way to go.  There are more common apps like Mint or Personal Capital that give a good picture of your net worth but they are not nearly as powerful in managing your monthly expenses.

Have fun setting up your first Mvelope Budget and watch your personal finances be transformed.  Also, I’d love to hear from you you have experience with Envelope budgeting or have any helpful tips and advice.


Five Minute Journal

I have been trying to keep a journal since high school.  It always starts well.  I write pages and pages for a few weeks and then I give up.  I get bored.  I run out of things to say.

I have even kept a list of prompts to use so I can at least write about something.  But it still never took.  I felt defeated and it was hard to try to journal again.

I was missing something.  It was purpose.  I wanted to keep a journal because it was something that successful people did.  But I didn’t know why they did it or to what purpose.  I never felt like I was getting anywhere.

Then I found the Five Minute Journal.  I was listening to a Tim Ferriss Podcast  and he suggested it as the single best thing that has helped a lot of his audience.  What I loved about the pitch was the emphasis of gratitude.  I am not a naturally grateful person and it is something I wanted to work on.

So I bought the journal right away.  It has been the single best purchase I have made it years.  It is super easy to do.  It takes less than five minutes in the morning and the evening.

In the morning you write top three gratitude’s and top three actions that will make the day great.  It gets you thinking about what you love about life and how you will make today count first thing in the morning.  No need to drone on with a bunch of words to fill the page.  One sentence per item so 6 sentences in total.

In the evening it is 3 things about the day that were amazing.  Really easy to accomplish and keeps the gratefulness ever present right before I go to bed.

The other side effect is that I feel a huge sense of accomplishment each day.  It is easy for me to get caught in the day doing what others want me to do rather than being mindful in accomplishing my purpose.  Spending these five minutes to journal is one way I can do something specific that helps me get in touch with what is important.