Rainy Day Pennies | Debt Free Living and Personal Finance

I’ve been an avid Quicken user for many years. I keep my bank accounts up to date every other day or more. Keeping close tabs on my spending and statements allowed me to find when my debit card had been used fraudulently, and my credit card charged by a subscription service without my authorization. In both cases, I called my banks immediately and had the cards numbers canceled and reissued. Unfortunately, I will never know how my debit card number was stolen – it could have been any number of online purchases or an unscrupulous restaurant owner. I’m surprised that many of my friends never look at their bank and credit card statements. My close tabs allowed me to get my money refunded and cards secured immediately.

Quicken has worked very well for me as an electronic checkbook ledger. The budget tool has never worked to my satisfaction or helped me balance my budget. I was intrigued by envelope based budgeting, which I was first introduced to at Mvelopes.com. I like web based tools as they can be used, theoretically, by any computer (I regularly switch between several locations with different computers) and platform independence (I use both Macs and PCs). In theory because it seems mvelopes.com doesn’t behave well in Safari.

However, the reason why I don’t use mvelopes is the subscription pricing. $94.80 per year with a 2 year subscription is much too expensive. My copy of Quicken 2005 has averaged out to $25 per year, and gets cheaper by the day. I don’t see why I should upgrade to the newer copy of Quicken as I don’t use any of the other features except for transaction downloads and the ledger. So I haven’t experimented with envelope based budgeting as I couldn’t find one that was stand alone.

I just found Budget from Snowmint Creative Solutions. I was thrilled by an envelope based budget system that was standalone and on the Mac! It also has a PC version, but sadly, the data formats are binary rather than open data based, like a xml format or the like. Nevertheless, I tend to do my productivity stuff on my Mac anyway, and the game fun stuff on my PC. Getting the copy for my Mac seemed the best choice.

I downloaded the trial version. I have to admit – as a Quicken user I was a bit lost about how to get my money allocated into envelopes the way I want. Unfortunately, by the time I got it figured out, my trial transactions limit had been reached! For $29, I thought it would be worth giving a try. I really wanted the ability to pre-allocate my money in each of my accounts.

After about a day of fiddling, I finally got my envelopes and accounts setup the way that I want. That is not to say the software is hard to use – quite the contrary. I just had to get used to the difference in budgeting. Instead of “categories”, you have envelopes as a visual representation. Each of your accounts has an “available” pool where you can move money into each of the envelopes. Every time you make a transaction, such as buying lunch, you make a “debit” transaction on the “Food” envelope. If you budgeted $60 per pay period for food and paid $5 for lunch, the envelope would show you have $55 for the pay period left. Simple and intuitive.

I created 2 envelopes and 1 envelope group for my Ebay and Amazon.com sales. I put my earnings in the “Sales” envelope and my shipping charges into the “Expenses” envelope. The higher level group envelope showed my total profit. I could then move my earnings into the “travel” envelope. I split my money market balance into “Debt Payment” and “Vacation” allocations. I bought groceries and deducted the cost from my groceries envelope. I can select the overview of all my accounts and see where I’ve allocated all of my money for this pay period. I pay for my car insurance in a 6 month lump sum, so I created an “Insurance” envelope, figured out my monthly cost, and budgeted it. It’s great being able to see that I have $80 allocated to Insurance and $37 to car registration in my savings account rather than just the account total.

So far Budget fits my needs for being able to separate out the money in my accounts in advance, rather than just a big total unallocated amount. I don’t think I’ll be replacing Quicken with it completely, as it still fits my needs for an electronic checkbook ledger.

You can setup an envelope based budget in Quicken. I’ve used split transactions in Quicken similarly. I’m liking Snowmint’s Budget software better because it was designed for this type of budgeting. Although, I *do* prefer to use one tool. I’ll have to see how Budget works out in the long haul.

-Cathy-

Filed under:
Budgeting, Software by Cathy