Envelope budgeting that adds up to the cent

What it does

Envelope budgeting is the old cash-in-envelopes method without the envelopes. You start with the money you actually have, and you give each dollar a job (groceries, rent, the car insurance due in March) until nothing is left unassigned. When you spend, it comes out of an envelope. When an envelope is empty, you either stop or move money from another one.

Kemback’s envelope mode does the bookkeeping, so the method stays simple and the numbers stay right.

How it works in Kemback

• Ready to Assign. At the top of the budget, Kemback shows the money you haven’t given a job yet: your starting funds plus income, less what you’ve assigned. It’s green while there’s money to assign, amber at zero, and red if you’ve assigned more than you have.
• Assign to each envelope. Each category is an envelope. Type how much to put in it this month. To move money, lower one envelope and raise another; Ready to Assign updates as you go.
• Balances roll forward. Whatever is left in an envelope at the end of the month carries into the next. That’s how sinking funds work: put $50 a month towards a $600 yearly bill, and the money is there when the bill arrives.
• Overspending is handled once. If an envelope goes below zero, it shows as overspent that month, and the shortfall comes out of next month’s Ready to Assign. Nothing is counted twice and nothing disappears.
• Start from your spending. New to envelopes? Kemback can suggest an amount for each envelope from your recent months, and you keep, change or skip each one.
• See it at a glance. The overview shows each envelope as a bar that turns amber and then red as it runs low, and alerts can tell you when you go over.

Every figure is calculated in whole cents, never in floating point, so Ready to Assign plus every envelope always equals the money you’ve had. That rule is tested on every change to Kemback.

Envelopes for a household

A budget in Kemback belongs to the household, so a couple or family works from the same envelopes, each person with their own sign-in. Roles decide who can edit and who can only look. If one person keeps an account private, its spending counts only in their own view of the budget, so the shared envelopes stay shared.

If envelopes aren’t for everyone

Some people love envelopes; others find assigning every dollar tiring. Kemback’s budget has a second mode, category budgets, where you set a monthly plan per category and compare spending with it. Both modes read the same data, and switching never changes your budget lines or transactions. See two budget modes for how they differ.

Where it runs

Envelope budgeting works in any browser at kemback.com and in the iPhone app, which is in beta. The budget is on the Free plan with no limits on envelopes. Transactions come in from files you download from your bank (OFX, QFX, QIF or CSV) until automatic bank sync arrives with the Plus plan.

New to the method? Give every dollar a job walks through a first month with real numbers, and digital envelope budgeting covers how it differs from cash.

Questions

Is Kemback's envelope budgeting free?

Yes. Envelope mode is part of the Free plan, with no time limit and no limit on envelopes or accounts.

What happens when I overspend an envelope?

The envelope shows as overspent for that month, and the shortfall comes out of next month's Ready to Assign. The envelope itself starts the next month at zero, so the overspending is accounted for once.

Can I use a normal category budget instead?

Yes. Switch to category mode in Budget settings and set a monthly plan per category. Switching never changes your budget lines or transactions, so you can switch back at any time.

Do envelopes roll over?

Yes. In envelope mode a positive balance always carries into the next month, so money set aside for a yearly bill builds up until you need it.

Does it work for a couple?

Yes. Everyone in your household sees the same envelopes, with their own sign-in. Any account can stay private to one person; its spending counts only in their view.