Electronic Envelopes: The Good & Bad

I’ve read innumerable posts on budgeting strategies. I’ve tried so many different approaches, some successful and some not so successful. The primary reasons some approaches were not successful was because of how I function. There is nothing wrong with those approaches, they just didn’t work for me. One of those strategies was electronic envelopes. Despite it not working for me, I’ve seen great benefits with this strategy.


I used Mvelopes for my attempt, utilizing their free plan. The interface was relatively easy to use and very clean. I was able to fund my envelopes quickly. I did not like that when I entered in my retirement and savings account information it counted both of these as fundable sources. This made it particularly difficult when I was trying to establish my savings goal. I attempted to use these electronic envelopes for a month however I was unable to keep up with it. I did not like having to long in and categorize every purchase I made. If you want to stick with an all-debit/credit approach, this may work well for you. I did have some purchases I made with cash that I could not add these transactions in easily. Overall, I found electronic envelopes did not work well for me and my style.

  • Clean, easy interface
  • Website and app access
  • Ability to split transactions
  • Ability to create a “profile” to fund your envelopes automatically
  • Offer free, premier, and custom coaching packages
  • Connects to a variety of banks, credit unions, and lending agencies


  • Does not work well with cash transactions
  • Counts all accounts as possible fund sources (even savings/retirement)
  • Account transfers show up twice (expense and income)
  • Not all banks, credit unions, and lending agencies as available

While electronic envelopes didn’t work out for me, it’s definitely a great strategy for explore. If you are a more tech-savvy person, I’d recommend Mvelopes as a starting place.


I’ve also tried You Need A Budget (YNAB).  They are basically the Mac Daddy of budgeting/electronic envelopes. YNAB operates off of 4 very simple rules:

  1. Give Every Dollar A Job

This is zero-balance budgeting at its core. When you create your budget, you better believe YNAB isn’t going to let you have $149.23 of uncategorized money. This helps to visualize your priorities and help you focus on where you can cut or modify expenses.

  1. Embrace Your True Expenses

This is where you start to really focus on the future. How long will it actually take to pay down debt? Are you really saving money? What do you monthly expenses really look like?

  1. Roll With The Punches

Flexibility is the key to real success. Not everything is always going to go according to plan. This is why emergency funds are so necessary. This is always where YNAB can vary from other envelope systems in that they encourage you to borrow from other discretionary funds if you overspend in one category (such as entertainment or clothing).

  1. Age Your Money

This is YNAB’s way of saying ‘stop living paycheck to paycheck.’ The longer you can go comfortably between being paid and spending your money (i.e. aging your money), the better you will be financially. The goal of this step is to get to a place where your money is routinely 30 days old or older. Another way of saying this is you are a month ahead of your expenses.

  • Free software download for offline use
  • Web, app, and offline access
  • Free trial with access to all resources
  • Online classes offered daily
  • Many resources to read and gather information
  • Great customer service
  • Ability to split transactions
  • 30 money-back guarantee


  • Does not work well with cash transactions
  • Not the best option for tracking investments

Bonus Features: They offer a 34 day free trial to let you determine if they are a good fit for you, after which it’s $5 a month or $50 a year (with a 10% lifetime discount). They also offer YNAB 100% free for currently enrolled college students (must provide proof of enrollment).
Those are some awesome bonuses!

*This post contains affiliate links. If you make a purchase through links listed on this page, I may receive a small commission.

Have you been successful with electronic envelopes? What worked best for you?

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