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Mvelopes Personal offers a new series of free informative articles dealing with such issues as budgeting, personal finance and other topics related to money management.
We invite you to read these money managment articles and
share them with friends, family, and others you know that would benefit from the valuable information presented.
Finding a Budgeting Tool – A New Spin on an Old Method
By Richard Irons
Countless number of people today struggle to meet the financial demands which they have placed upon themselves. With easier access to more and more credit cards, which are then used to cover gaps in spending, consumers are continually placing themselves into financial situations from which they cannot recover. Even as consumers turn to the numerous types and methods of budgeting systems and tools available today to help them manage their self-created financial crises, the failure rate continues to climb.
Twenty years ago people were less dependent on credit cards then than they are today. Companies are continually pushing their credit cards, offering on people with rewards, points, and discounts, all of which makes saying "no" much more difficult for the average consumer. How many times a month do you get in your mail box anreceive offers for a new credit card from companies? For me, it seems likeI know I receive at least 2-3 two to three a month. These credit cards, along with debit cards, online payments and automatic transfers Unfortunately, we are turning intoquickly creating a nearly cashless society. Consumers are relying more on credit cards to buy now,and planning to paying off their debt over a stretch of time. The high interest rates, service charges and fees associated with credit cards drive up the costs of these purchases and createThis is causing them to incur heavier financial burdens and paying more for their purchases due to the high interest rates. The problem is only getting worse and many current budget tools do not address the core problem of managinge spending.
As recently as 20 years ago, before the huge credit card craze started taking steam, people relied on cash much more than they do today. They knew immediately how much they could spend on an item. Checkbooks helped people track what they could and could not spend giving people a more realistic view of what they could afford. People were much less dependent on "virtual cash" in the form of credit cards than they are today.
You may recall hearing stories of your parents or grand-parents stuffing cash into envelopes. They called this 'budgeting with envelopes' or 'envelope budgeting'. This method of budgeting was simple, effective, and easy to manage. The envelope budgeting method worked like this: when the paycheck came in, it was immediately divided into various labeled envelopes. For example, these envelopes would be labeled entertainment, groceries, clothes, car repairs, mortgage, etc. Each envelope would hold the allotted cash for that category. When a purchase needed to be made within that envelope category they would know exactly how much they had and could spend. If the cost of the purchase was more than what they had in that envelope, they would take the available cash from another envelope to ensure that the purchase could be afforded.
This very simple yet real-time look at what people could spend gave immense financial power to those who used the envelope budgeting method. There was no guess work as to what their financial situation was and what could be afforded. Spending was kept under control and savings increased. Unfortunately, society moved away from cash transactions as people enjoyed the freedom and convenience of a digital economy. This change, however, caused enormous side effects with how people budgeted and managed their spending.
Mvelopes Personal modernizes the envelope budgeting system and has created a budgeting tool that has helped tens of thousands of users around the world. The Mvelopes system allows you to take your income and divide it into virtual envelopes online. It allows you to see your envelope budgets from any computer or mobile phone. Mvelopes also allows you to set up automatic bill payments so you are never late again for a payment. Other automated features will save you time and keep you in the loop as to what you can realistically afford. If other budgeting tools have failed you in the past or you are not better off with your spending habits than you were a year ago try the 30-day free trial of Mvelopes and see how powerful and effective this tool is. You can read more about this budgeting tool at www.mvelopes.com
*Based on a 2-year membership plan, other plans available.
**To avoid being charged the full service plan fee, simply cancel before the free trial period ends.
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