Cash Envelopes & Simplifi

Flopbot · May 2023

Greetings,

Awhile back @mollyllama posted an interesting question about setting up a Cash Envelope system in Simplifi. At that time I had just started down the path of using Cash Envelopes myself and still had a lot to learn.

In Molly's post, @DannyB made a pretty decent supposition…

'Simplifi is not an envelope budgeting tool and will only frustrate you if you are looking to do envelope style budgeting"

Six months later, I can confirm that Danny is 66.66666666% correct! In summary, there are three basic ways to set up an 'Envelope System' in Simplifi:

Where receipts play a critical role. - You enter every receipt and it shows up on your Spending Plan in Simplifi. If you miss a receipt, you end up entering account adjustments in your transaction register and your spending plan is off that month. Depending on how on top of things you are, Simplifi tracks the 'Envelope Balance'.
Where receipts don't play a critical role. - You enter every receipt like normal, but they don't show up on your Spending Plan in Simplifi. If you miss a receipt, you have to do a balance adjustment in your cash envelope to keep it accurate, but - at least - it won't throw off your Spending Plan. Depending on how on top of things you are, Simplifi tracks the 'Envelope Balance'.
Where you don't enter receipts at all. - You don't enter receipts at all and don't keep track of any 'Envelope' transactions. The money just leaves Simplifi and you stop tracking it from there. Because of this, Simplifi doesn't track the 'Envelope Balance'.

Like Danny said, methods #1 and #2 will only lead to frustration, but if you really, really, really…REALLY want to try them, you'll find the step-by-step instructions in my reply to Molly, click here. I'd only recommend attempting the first two for someone with lots of time on their hands to work through all the various challenges. Of the two methods, #2 is marginally less frustrating and would be more recommended.

Method #3 is my chosen path forward and certainly the best option for my particular situation (limited time, limited funds, limited bandwidth). Once I'm finally done transitioning to it, everything should be pretty frustration free going forward.

Here are some important considerations about my situation:

We don't have many cash envelopes (just food & clothing at this time).
I'm trying to cut down tedious data entry and want the easiest/fastest method possible.
My wife and I don't care too much about Simplifi knowing the current balance of each envelope - yes, it would certainly be nice. However, in practice, my wife NEVER asked for it and if we really wanted to know that, we could just count the money in the envelope quickly enough. When it comes time to spend, if we open the envelope and there's no money, then we stop spending…or at least we should!

To set up method #3, follow these basic steps:

Create a Recurring Series for the amount of the ATM cash withdraw that you'll be doing monthly. Make sure to categorize it as your spending category! Also, set it for whatever date you think you'd like to visit the ATM.
The Recurring Series will show up as a box on your account register until the actual bank transaction clears. When that occurs, everything matches up.
On your Spending Plan, the Recurring Series will show up under the 'Income after bills & savings' section.
If you want to track your spending over time in a pretty graph format, set up a Watchlist.
One oddity of our situation: For our Food budget, we pull out the majority of the money for the envelope; however, we leave a small portion in the bank account for times when we forget the envelope. In that case, I set up the Spending Plan > 'Planned Spending' section to track CC-only spending which gets categorized with the same spending category that was used in the Recurring Series. To see our entire food budget (cash + CC), I use the Watchlist set up in the last step.

Using this method:

At the beginning of the month, I find my "ATM Draw" series reminders waiting for me. Once I've withdrawn the money, Simplifi does a decent job matching the bank transactions to the Recurring Series; if not, it's an easy fix. Since the category in the Recurring Series is my spending category of "Clothing & Shoes" (for example), it immediately shows up on the Spending Plan.
I put the money straight into the Cash Envelopes.
When paying for something out of the Cash Envelope, you can simply throw away the receipt (or in my case file it away for three years).
When paying for something with a CC, I enter the receipt in Simplifi with a category of "Clothing & Shoes" (for example) and mark it with a special tag "Cash Env. Covered (Delete when repaid!)." When the statement arrives and I reconcile my account, I filter for this tag, take that amount out of the envelope, and deposit it back into the bank. For everything to not get too confusing, I then go back and delete the special tag from the various CC transactions. It's a bit tedious, but it works.

That's pretty much it. I know some people in the community want a more 'built-in' method, but this setup works well enough for me. If you're looking for an idea post for that more integrated way, click here.

Otherwise, good luck and feel free to let me know if you have questions or feedback. I'd be interested to know if anyone finds a different way that I'm not thinking of.

DannyB · May 2023

OK, @Flopbot, I take it back and I'll go with 66.66666666% frustration rate! 🤣

I have actually been wondering about how your Envelope system was coming together sense you mentioned you were working on it a while back and had planned to ask you at some point. Good to see you have worked something out.

I do have one "cash envelope" in my Spending Plan>Planned spending that I call "Petty Cash." The spending goal (limit?) is $200. Sometimes I'll actually go to an ATM and withdrawal the money and the envelope I put it in is $100 in my wallet and $100 in my wife's wallet (or wherever she keeps cash in her magic bag!). We don't track how this money gets spent, it's just cash to have on hand for whatever.

Otherwise, everything else is tracked in Simplifi with the tools at hand.

👍️

Cash Envelopes & Simplifi

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