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Envelope Budgeting


I bought a subscription to MoneyWiz because I noticed on the information that it included Envelope budgeting which is something I really want in home budget software.

Having had a play with the app I have found budgets but nothing that resembles Envelope budgeting as far as I can tell. Envelope budgeting should allow me to set an amount as a budget for each category and then allocate my income to each envelope to put aside for it.

As an example, if I pay £120 a year on insurance, I want to allocate £12 of my income to that each month. Each month I would see my balance increase by £12 until it reaches £120. Then I pay my insurance and it goes back to zero.

MoneyWiz doesn't seem to work like this. It doesn't allocate anything to my budget until I actually spend money. So in my example above I'd have a budget of £120 each year, but my spend would be £0 until I have to pay for my insurance. 

Am I missing something here? 


Hello Curtis,

The problem with the term "envelope budgeting" is that it means something slightly different to everyone so each customer expects to see something slightly different. We gather all those comments and suggestions and work to re-design our budgets implementation to make it suitable for everyone but this takes time.

In MoneyWiz, you create budgets and set them monitor categories. You can, if you want, create one budget per one category but you'd end up with dozens of budgets. What most of our customers do is create a budget that monitors a couple of categories. For example, budget "Food" can monitor Groceries, Sweets, Mineral water categories. "Car maintenance" can monitor Car Insurance, Petrol/Fuel categories, etc.

You can achieve what you need with MoneyWiz. You just create a budget with £12 monthly with rollover enabled - as long as you don't touch this money, it will grow to £120 when you need to pay it.

I guess what you're missing here is that you expect your available money to decrease when you allocate money to a budget. Indeed, this figure is not present in MoneyWiz. This is because we want the Accounts section to reliably reflect your account balances and not artificially reduce it when you make changes to budgets. At first, this might appear as if this prevents you from using the budgets but it's not really so. Once you set your budgets up you can stop looking at the accounts figures completely and "live" in budgets only. That's where you see how much you have left to spend for Food, Entertainment, etc.

The only comment I would like to add here is that I, also, am a former long-time YNAB user and have been migrating toward using MoneyWiz, principally. The Budgets section is visibly very small and limited in what can be seen. By that, I mean that the app focuses mainly, in my opinion, on transaction tracking. The visible areas for that are very large. But the visible area under Budgets is very small, and the number of budgets that are easily visible in this little screen area is really limited. It would be nice if there could be, somehow, a redesign that would give a much larger view to the Budgets list and the balances left in those. In other words, if the advice is to "live in the budgets only," it would be great if the Budgets area were much larger and more easily visible. Just my opinion.

Hi Pawel,

the problem with your approach to budgeting is, that you do not see the bigger picture.

You can "live in budgets only and see how much you have left to spend for Food, Entertainment, etc." as you wrote, but you do not see if you have enough financing to cover the budgets. In other words, your Food, Entertainment, etc. budgets in total can be more than your opening balance and income for a period. It's correct that it can be higher (it's a flag that you need to do something) but it's incorrect that you cannot see the situation.

The same vice versa - If you could see that you have a big surplus over the budgets for a period you could decide to allocate more to e.g. Vacation budget.

The solution doesn't necessarily need to be envelope budgeting. I believe people keep mentioning YNAB because they achieved very elegant high-level view of "what I can afford". You are much better in analysis but you are lacking in a holistic view. In my opinion at least, I'm struggling myself to decide which one to drop. In MoneyWiz, I can see trees, but it's difficult to see the forest. In YNAB, I can see the forest, but it's difficult to see trees.

The quickest solution that fits into your overall approach would be, in my opinion, to include budgets into your forecasts modelling in reports. Therefore, the scheduled transactions together with budgets would be used to generate forecasts (I'd start with CF forecast). Actually, it can't be very difficult...

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