We’ve all heard about the envelope budgeting system. For each spending category in your budget, you determine your spending limit and place that cash into a labeled envelope. Once the envelope is empty, you are done spending in that category. Sounds simple, right?

The theory behind the envelope system is that people are less likely to overspend if they are dealing in cash transactions versus debit or credit card transactions because the cash is more tangible. However, in this day and age, carrying around envelopes full of cash does not align with how we typically manage our cash flow. Everything is done online –from completing banking needs, receiving our paychecks, to making online deposits.

Mvelopes is a budgeting app inspired by the envelope system and can help you stay on track with your student budget! Here’s how it works:
Mvelopes connects to your bank account to keep track of income and expenses. You can use the app to set a monthly budget for all of your expenses, plus set up individualized savings goals. 

If you want to try Mvelopes to manage your budget, here’s the nitty gritty:

1. Sign up online at www.mvelopes.com.
Or you can download the app for iOS or Android.

2. Add your accounts.
You may link Mvelopes to as many accounts as you’d like. Including checking, savings or even investment accounts. You’ll need your online banking username, password and possibly an answer to a security question.

3. Define your income.
Add the date and amount of any fixed paychecks, or if you are unsure of your income every month, you have the option to add variable income month by month if your income isn’t consistent.

4. Create a budget.
Creating your budget in Mvelopes is similar to creating any other budget. You’ll create envelopes for what you spend money on and assign a monthly limit to each. You should create envelopes for fixed monthly expenses, like rent, car insurance, car payment, utilities or cell phone bill. Then, separate the leftover funds into your variable expenses envelope, like gas, groceries, shopping and other personal expenses.
Mvelopes also reminds you to budget for larger periodic expenses, like car registration, holiday gifts, buying a new car and vacations. This helps you set aside a little for each every month, so you’re prepared when they come up. 

5. Fund your envelopes.
Next you’ll fund your envelopes, which means assigning part of your balance to cover each expense. You’ll do this with each paycheck to distribute your income as needed across your anticipated expenses.
When you “fund” the envelopes, no money is actually being moved around, or in or out of your bank account. Mvelopes just works with your balance to help you keep track of your digital money the way you’d do with hard cash.

6. Get an easy snapshot of your budget.
When you want to know what you have left to spend, you can check the Mvelopes app on your phone or your account online.

This should help you keep your spending in check, but the app won’t do all the work for you. You will have to “maintain” the budgets by making sure each transaction is assigned properly and that you’re watching the spending limit for each envelope.

If you’ve already used the envelope budgeting system to keep track of your cash, and you’re looking for a digital companion, this is a great alternative. Give it a try today!