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Mvelopes Personal Offers New Approach to Spending Management

Hello everyone. Thanks for all the great responces I have been receiving to this blog. Today I just wanted to post some information on the budgeting system I use as the foundation to my personal finances. If you have followed this blog for long you know that I tell everyone I can to use Mvelopes because it has made such a big difference in my own finances. So today I am doing a full-on write-up on Mvelopes.

In2M Corporation recently announced the launch of Mvelopes^® Personal Web-Client 2.8. The web-based application offers the anytime, anywhere convenience of online banking in a one-stop financial management center that users can access from home, work, or on the go. The program allows users to plan for, track, and control spending, eliminate and avoid debt, pay bills, and monitor net worth.

Mvelopes Personal is the latest player in the personal financial management (PFM) space that Quicken^® and Microsoft^® Money have dominated for so long. But Mvelopes doesn’t necessarily consider itself a competitor to Quicken or Money – at least not directly. “Mvelopes really approaches spending management from a different paradigm than traditional software programs,” said David Neddo, senior product manager for Mvelopes. “Other programs simply track spending to let you know if you’ve reached your goals. Mvelopes helps you reach your goals by giving you up-to-date and accurate information, when you need it most – when making spending decisions. Mvelopes does more than simply allow you to view spending patterns, it helps you create them.”

Breaking the Mold

Unlike other PFM programs that simply track your transactions in an account register and show your ending balance, Mvelopes divides the money in your accounts among separate virtual spending “envelopes” such as groceries, mortgage, entertainment and savings – each with its own register and balance. So when a user looks at her money to make a spending decision, she doesn’t just see a checking account total, she sees exactly how much is remaining in each specific spending envelope. The idea is that by viewing the envelope balance instead of a checking account balance, you can see that although a specific purchase may not adversely affect your account, it can adversely affect your ability to cover other expenses, such as a car payment, groceries, or your daughter’s birthday.

The service links directly to your bank account(s) and automatically receives your transactions in real time. The transactions can then be assigned to the various spending envelopes to give you a visual snapshot of exactly how much you have left in any given category and how long it has to last. If you overspend, the budget category turns red alerting you that you need to adjust either your spending plan, or your spending.

Because the service is web-based, users can log on to view and update their spending plan from any computer with an Internet connection. Couples can simultaneously log on at different locations and go over their finances together over the phone. Unlike traditional software programs, users aren’t tied to a single computer. “I recently received a letter from a retired couple touring the country in their RV who use a computer at any local library to keep track of their finances and pay their bills while on the road. They love the freedom and control it offers them. We even have users in the military, serving in Iraq, who have been able to access Mvelopes through local Internet connections to coordinate with their spouse back home,” said Neddo. “Mvelopes really does allow for anytime, anywhere access.”

Mvelopes Personal also boasts a credit card feature that allows users to properly manage their credit card spending, avoiding costly service fees and high interest rates. When a user makes a purchase using a credit card, upon assigning the transaction to a specific spending envelope, the program automatically reallocates the transaction amount from that spending envelope to a credit card repayment envelope so the user isn’t tempted to spend the money elsewhere. When the bill comes, the exact amount due is sitting in the credit card repayment envelope to be paid in full. You can even pay the credit card bill using the included online bill pay service.

The prepaid subscription service, which is supported by over 8,000 financial institutions, is available starting at $7.90 a month*. According to In2M, that places the cost of Mvelopes Personal at roughly a third the price of either Quicken or Money once you pay for the additional features that Mvelopes includes standard. Important features include:

• Electronic envelope approach to budgeting
• Automatic transaction retrieval
• Anytime, anywhere access
• Credit card management
• Full-featured bill pay service
• Net Worth tracking
• Live customer support, and unlimited personal budget coaching

“Every so often a product comes along that changes the paradigm in a given industry,” said Neddo. “Mvelopes Personal is bringing spending management into the twenty-first century.”

Product Pricing and Availability

Mvelopes Personal is a prepaid subscription service available at www.mvelopes.com or by calling 1-866-367-4686. Plan prices are as follows:

• 2 Year Plan: $189.60 billed every other year (equivalent to just $7.90 per month)
• 1 Year Plan: $129.60 billed every year (equivalent to just $10.80 per month)
• Quarterly Plan: $39.60 billed every 3 months (equivalent to only $13.20 per month)

10 Tips To Stay Debt Free This Christmas

Christmas can be a financially stressful time for many people and that takes the fun out of the festive season. The funny thing about Christmas is it occurs every year and at the same time every year! So with a little bit of planning you can take the stress out and stay debt free.

Here are my Top 10 tips to get you on you way:

PLAN
Write a list of the friends and family members you wish to give a present to. Next decide on your total budget for Christmas presents. Next to each name add a maximum dollar value for the gift and ensure the total does not exceed you budget! If you have ideas for gifts start listing them now - it will help your shopping trips be more focused.

STICK TO THE PLAN
When you do your gift shopping stick to the plan - avoid impulse buying. That stereo might be a great "bargain" but if it is over your budget you need to keep walking.

I am sure you have great taste in gifts - do you ever buy a gift for someone and buy it for yourself as well? You will get plenty of gifts for Christmas - no need to buy for yourself as well.

START NOW
Rather than waiting until 2 weeks before Christmas and spending all your money in a short period of time start buying now. It is much easier to afford one gift each payday than 10 all at once. Find a good hiding place in your cupboard!

USE LAY-Away
Credit Cards are easy and convenient but if you struggle with debt over Christmas leave them at home! Interest rates on unpaid monthly balances are an unnecessary cost. If you have started shopping early you can pay a small amount each payday off your lay-by without going into debt. Keep your spending manageable.

HAVE A SAVING PLAN
Have a separate bank account for Christmas savings. Many banks have accounts that earn "bonus" interest if you make a deposit and no withdrawals in a month. Many of these accounts have no bank fees. You can arrange for set amounts to be automatically transferred to that account each payday. If you don't see it you can't spend it! If you are comfortable banking online there are also good "virtual" accounts with Credit Unions that pay around 5%pa and allow you to transfer money out of account with no penalty.

THINK OUTSIDE THE BOX
It really is the thought that counts so think outside the box. People love gifts that have a personal touch to them. - make Christmas chocolates, cookies, jam etc to give to friends - give a gift voucher for 10 hours of babysitting - make a donation to charity in their name - give a voucher for 5 lawn mowing afternoons (to be provided by you)

INVOLVE YOUR FAMILY
Discuss your plan to stay debt free with your family and discuss ways that the whole family can be involved. There are no rules - find something that works for your family and keeps Christmas fun. One popular idea is to not buy gifts for all the adults in the family - just the kids. The adults each select a name and buy a gift for that adult on behalf of the whole family. Christmas is about love and sharing not about how many presents you receive. You will probably find other family members feel relieved to be able to reduce their Christmas spending too.

ANOTHER COFFEE?
Start becoming aware of what you spend on "little extras" each week - coffee is my favourite place to start. Buying just 1 coffee a day can cost you $10 - $15 per week … buying lunch each day at work can cost you at least $25 per week. I think you get the point. If you are serious about keeping out of debt this Christmas start taking your lunch to work or having instant coffee …. put the money you save into your Christmas account. You will love how quickly this adds up!

LEAVE THE PLASTIC AT HOME
That's right - leave the Credit Card at home! If it is not in your wallet you cannot charge Christmas shopping to it. It is so easy to accumulate debt without even being aware of it - once you do it snowballs into something much greater than you can handle and becomes a weight to begin the New Year. Use cash or you debit card - you can't spend money you don't have.

BE COMMITTED
You have a choice. If you are 100% committed to being debt free for Christmas then you will make it happen. It takes focus, desire and discipline not to take the easy, convenient and expensive way out of Christmas shopping. 'Those who want to succeed will surely find a way, and those who don't will find an excuse' "a thousand paths to tranquility" David Baird


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Linda Anderson is a Certified Professional Coach working with Small Business Owners and Professionals in Australia, New Zealand and the USA. Linda helps her clients succeed in business and in life by creating strategies to overcome their obstacles to success. Linda brings this passion for challenge, new experiences and adventure to her coaching. You can visit Linda at her website - www.a2acoaching.com

Getting Past the Idea of Budgeting and Saving Money

I'm sure you'll agree that budgeting, saving money, and eliminating debt are very appealing ideas. If effectively tackled, these goals can secure your financial status for the future, and allow you to live a comfortable, debt-free life.

However for some unfortunate reason, these important financial goals hardly ever get accomplished, and most will continue to go through life consistently worried about their financial security, unprepared for what the future may hold.

I have been writing money saving articles and newsletters for http://www.SavingSecrets.com for over 5 years now. After being in contact with a number of readers over the years, I found that many who were interested in learning how to effectively save money simply lacked the foundation to accomplish this.

I am a firm believer that the ability to save and budget is dependant on the plan and approach one takes. Sure many proclaim they want to conserve and save more, but how many actually accomplish this? Saying one thing and actually doing are completely different from one another. Why do you think so many New Year's Resolutions are forgotten and never heard from again?

For example, think of the times you yourself started a new hobby or goal. Were you successful? If not, how long did you stay with this new undertaking? What was your reason for quitting or not following through with the intended plan?

From this short self reflection, you can probably guess the reality most would-be budgeteers are faced with. Even though these individuals have the desire to conquer their finances, for some reason the task never gets accomplished.

What is needed to help guarantee success is inspiration and a solid approach, or what I like to refer to as a "game plan".

Think about it.

If someone wants to learn how to play the piano, realistically, they are not going to just sit down and start banging away on the keys. They'll never learn to play the piano effectively that way!

In order to tackle the process of learning the piano, an eager student will take lessons, purchase "How To Play Piano" books, tapes, cd-roms, interactive software, browse the Internet for tips and related online forums, check local college for classes and instructors, etc..

Who do you think will have more success learning to play the piano? More than likely it will be the energetic individual with the planned agenda and goals, than the dreamer without a "game plan".

Designing Your Game Plan

Once you fully commit to accomplish a particular task, to help improve your chances for success it is imperative that you design and follow a regiment, a well thought out "game plan".

Every task, whether it's for work or pleasure, has some type of goal or objective. If your underlying task is to clean the house, then a specific goal may be to clean the kitchen or organize the cupboards by the end of the day. If your task is to learn how to play the piano, then a goal may be to learn how to play your favorite song within a month or two.

Take notice that the goals provided are very realistic and practical. You want to establish goals that are attainable in a reasonable amount of time.

Before you start planning how YOU are going to tackle the task of budgeting and saving money, take a moment to determine what goal(s) you want to accomplish and a specific time frame for each particular goal. This will give you something tangible to strive for and help keep you focused on task, thus increasing your chances for success.

Here's an example of a practical task along with the respective goals:

TASK: Spring Clean The Whole House

GOALS:
week 1 - kitchen; refrigerator, cupboards, monthly menu, coupons organized
week 2 - garage; organize boxes, Xmas decor, scrub/polish floor
week 3 - family room & bathrooms: cleaned, scrubbed, carpet & drapes
etc...

Putting Your Plan Into Action

Remember the piano playing example mentioned earlier? No matter how many books or tapes you buy to help teach you how to play, unless you devote serious time to practice, you will not improve and you will not accomplish your goal(s).

Your game plan MUST be put into ACTION! Don't let your wonderfully designed agenda get lost under a heap of papers or collect dust on some obscure counter top.

Put your plan into action!

Just like the piano player, you will need to devote focused time specifically to your task in hopes of accomplishing the predetermined goals. Keep in mind that only after serious time and effort is devoted to your cause will any real changes occur.

Best wishes accomplishing your tasks and goals to effectively save and eliminate that ever-present debt! Hopefully this has inspired and motivated you to accomplish your tasks and goals regardless of what they may be.

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The Secret of Envelope Budgeting

Isn't it amazing how often we learn about simple principles that, when applied, have the ability to impact our lives in profound ways? Such is the case with the traditional envelope budgeting method of personal financial management. Many have heard of or are familiar with someone who has used this simple system for spending management. The envelope budgeting system has worked exceptionally well for many people in the past. These people understood the basics of the system and how to use it, but many could not articulate the principles behind the system that allowed them to be successful.

The envelope budgeting system as it was used with cash is very simple. In the days before the proliferation of credit cards, debit cards, and other forms of cashless spending, many couples were very dedicated to this system and used it effectively for years. Initially, a couple would sit down together and determine how much cash they would receive each month. This available cash represented the net amount of all of their paychecks for the month. Then, they determined where they would be spending money. Their areas of spending included things that they would purchase and pay for each and every month, and things that they would spend money on only periodically. After completing their list, they took out a stack of envelopes and labeled one for each area of spending. Their next task was to determine the amount of money required for each area every month. For the areas of periodic spending, they calculated the amount they would spend each year, and then they divided this amount by 12. This represented their monthly spending plan.

When they received a paycheck, they would go to the bank and cash the check. Then they would sit together at the kitchen table and divide the cash into different envelopes based on their defined spending plan. When they paid for goods or services, they would simply spend from the specified envelope. Couples always knew how much money they had left to spend and how long it needed to last.

The envelope budgeting system automatically encapsulates four principles that are keys to financial success. They reveal the secrets of how you can achieve financial fitness utilizing the envelope budgeting system.

FIRST: Set money aside in advance

When you commit yourself to use a budgeting system, you become dedicated to living within your means. One of the primary reasons for this is that the envelope budgeting system requires you to set aside money in advance for each of the spending requirements you have, including monthly required and discretionary and periodic required and discretionary expenses. As discussed earlier, many people in America live paycheck to paycheck. This system helps eliminate this problem, because the funding for spending comes from available cash resources that are allocated to spending before the spending takes place. After following this system for just a few months, you can quickly get to the point where you have enough money set aside at the beginning of the month to meet all of that month's spending requirements.

One of the significant problems people face today is not understanding how future spending requirements will impact their monthly cash flow. Have you ever had an annual insurance payment surprise you? Other periodic spending requirements include vacations, property tax payments, holiday spending, gifts, auto registration fees, auto maintenance fees, house maintenance fees, furniture and appliance replacement costs, and so on. As you think about it, there are many things that can catch you off guard if you don't plan ahead. These types of expenses were constantly creating problems for Ryan and Christine. Much of their consumer debt was directly associated with being unprepared for periodic spending requirements.

Most people manage spending by their checking or savings account balance at the bank. Unfortunately, this account balance does not prepare you for the periodic spending needs that will arise in the coming months. It also does not alert you to the spending your partner is planning over the next few days or weeks. So you make independent decisions about how much you think you can spend without really understanding the big picture. This is a very dangerous approach and leads to problems, including bounced checks, frustration, and, ultimately, more debt. Most of the overspending in families can be traced to an inability to incorporate periodic spending requirements into their current cash resources and spending practices. A great example of this is the amount of credit card debt that is created during the holidays or on vacations each year as a result of not having money set aside in advance. Many justify this spending by telling themselves that they will pay the credit card balance next month. This rarely happens, because next month's spending requirements are already based on 100 percent of the cash resources for that month.

The Mvelopes Personal System addresses this problem of periodic spending requirements by allowing you to set aside money in advance of periodic spending needs. For example, if you were going to spend $2,400 on Christmas each year, you would be setting aside $200 each month. To state this another way, if you want to spend $2,400 each year for Christmas, you need to spend $200 less on other things each month. Perhaps your parents or grandparents used a similar system. Imagine how they felt each December when they prepared to purchase gifts for Christmas and the Christmas envelope was full! Imagine how you will feel when you want to take a vacation and know that the money is already set aside in advance. Or imagine how nice it will feel to know that you have money set aside to replace the tires on your car the next time it's required.

SECOND: Spend from how much is left

One of the significant secrets to not overspending is to know daily how much you have left to spend in any area of defined spending. While this seems very simple and even obvious, consider how often you make purchases without knowing how much you can really spend before your spending outstrips your available resources-or how many times you buy something without knowing how it will negatively impact your ability to meet other spending requirements. The unplanned gift purchase had a significant impact on the resources Ryan and Christine had for other spending requirements. When people used a traditional system to make purchases-to buy clothes, for example - they would take the clothing envelope with them. They knew immediately how much they had left to spend and how long it had to last before they funded the envelope again. This information was invaluable in assisting them to make sound spending decisions. If you choose to spend less than you make, then spending from what's left becomes very simple. If there is not enough in the envelope to complete the purchase being considered, the purchase is delayed or another purchase decision is made. Without knowing how much is left, you can only hope that the purchase decision you are making will not negatively impact other areas of your financial life. Unfortunately, you will not know this until it is too late. Knowing in advance how much is left to spend is the secret to making smart spending decisions every day.

THIRD: When you run out, you must make a choice

We all want to be fully empowered to make choices. Often, this is one of the justifications we make for spending money. 'It's my money, I've earned it, and I have the right to decide how to spend it! If I want to purchase that coat, I will, period.' The problem with this thinking is that it often takes choices away later on: because you purchased that coat, you may not be able to purchase the birthday gift you wanted for your daughter.

It is quite possible to run out of money before you fund the envelope the next time. If this happens, you have three options: (1) put off the purchase until you fund the envelope the next time, (2) purchase something less expensive, or (3) purchase the item and transfer money from another area to cover the cost. All three choices will still allow you to live within your means. With the third option, you can determine at the point of purchase which other area of spending you would like to impact. For example, if you wanted to purchase the coat and didn't have enough money in the clothing envelope to cover the cost, you could transfer money from your groceries envelope to cover the cost. If you made this decision, you would do it with the knowledge that you would not be able to spend as much on food this month. There's nothing wrong with having made this choice. Perhaps you know that your grocery needs were less this month than in the past, or perhaps you did not spend all the money in your grocery envelope last month and you have extra. Whatever your thinking, you have to be able to make a purchase decision and understand exactly what impact it will have in other areas of your financial life. Making a purchase choice is great as long as you do it on an informed basis.

FOURTH: At the end of the period, what's left is savings

One of the key principles to securing financial fitness is to save something first. In addition to setting aside a specified amount for savings each month, the system allows you to save the balance remaining in many envelopes at the end of each period. For example, if you have some money left in your groceries envelope at the end of the month, you could take that money and apply it to savings, since you would be funding the envelope with enough money next month to take care of your needs for that period. Many of your discretionary spending envelopes would qualify for this review at the end of each period. Discretionary spending id defined as areas of spending that are not tied to fixed or required expenses. Based on the spending decisions you make in these areas, you may often have money left over at the end of each period. Examples of discretionary spending envelopes include clothing, groceries, eating out, entertainment, and so on. By adding the amount left in each of these areas to your defined savings, you can significantly increase the amount you apply to savings, debt repayment, or long-term investments.

While people in our grandparents' day used cash to successfully implement the envelope budgeting system, it is more difficult today. Many purchases can still be made conveniently with cash; however, we often pay for goods and services using checks, debit cards, credit cards, online bill pay, and even automatic withdrawals from our bank accounts. For some, the cash-based envelopes may represent the best approach for ensuring financial management success. For others, cash may simply not be a feasible alternative. The principles outlined above are not dependent on the implementation tool used. As a result, you can successfully incorporate the envelope process using one of four basic approaches: (1) cash, (2) a paper ledger or computer spreadsheet, (3) a computer-based system, or (4) a combination of these.