Can Goodbudget help keep your finances on track?

by Jill Jaracz
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Can Goodbudget help keep your finances on track?

The Good

  • Doesn’t collect your account information
  • Robust reporting makes it easy to see where your money goes
  • Makes you smarter about personal finance

The Bad

  • Definition of “on-track” is simplistic
  • Creating envelopes mid-budget period is cumbersome
  • Can’t split expenses into more than two envelopes

What is Goodbudget & how does it work?

The envelope system is a popular money management strategy. Designate an envelope for each of your spending and savings categories, then allocate your take-home pay among the envelopes as you see fit. When you want to buy something in a category, you take the money out of that envelope. When an envelope is empty, you’re done spending on that category until you get paid and can refill it.

Goodbudget is an app and website that virtualizes this envelope system. It helps you manage your envelopes on the go and track your spending better.

You can customize your envelopes in many ways. First, choose your budget period: monthly, weekly, twice a month or every two weeks. Then set up envelopes by type. Spending envelopes are tied to your budget period. Annual envelopes are for more infrequent transactions. Goal envelopes are for savings or setting aside money for a big expense, like a vacation. Within each of these types, you can create your own spending or savings categories and budget dollar amounts for each.

As you enter your spending, Goodbudget’s envelope mascot lets you know if you’re on, ahead or behind your spending and savings targets. If you’re ahead, the envelope is happy, but if you’re behind, the envelope has a sad face, and the app will suggest that you lay off of spending in that category for a while. The main envelope screen also shows if you’re on target with spending, or if you’re in the red.

The basic version of Goodbudget is free and lets you manage one financial account and a total of 20 free envelopes (ten monthly and ten additional envelopes for annual spending or savings goals). The Goodbudget Plus platform offers unlimited accounts and envelopes, syncing with five devices, seven years of history and support. It costs $6 per month or $50 annually.

What’s good about Goodbudget?

Doesn’t collect your account information
Goodbudget doesn’t require your personal account information, which keeps your personal information private. However, that does mean you have to manually add your income and spending information and make sure it’s accurate.

Robust reporting makes it easy to see where your money goes
Goodbudget crunches the numbers in a lot of different ways, so you can easily see how your money is allocated and compared to your spending. The app only shows spending by envelope and income vs. spending, but the web version has additional reporting options, plus the ability to download transactions into a spreadsheet.

Not into apps? Check out our simple budget spreadsheet.

Makes you smarter about personal finance
Goodbudget is serious about helping you manage your money. It has an extensive, well-executed personal finance section called The Goodbudget Way with articles, podcasts and easy budgeting courses.

What’s bad about Goodbudget?

Definition of "on-track" is simplistic
Once you set a budget for each envelope, Goodbudget seems to calculate what you should be spending in that category per day. That means a recurring monthly bill can quickly drain an envelope when the bill comes due, sending the envelope mascot into sad mode.

Creating envelopes mid-budget period is cumbersome
If you add a new envelope in the middle of a budget period, it takes a few extra steps to move a dollar amount into that envelope. This is more of a hassle if you have a monthly budget period, because your income won’t automatically sweep into that envelope when you set it up.

Can’t split expenses into more than two envelopes
Goodbudget allows for split expenses, but only between two envelopes. If you have a multi-category transaction — say a vacation with many spending components — you can’t bundle them all together to help you understand how much you need to save for a future vacation.

Is Goodbudget worth it?

Even though it doesn’t have the capability to be extremely granular in some transactions, Goodbudget still has a lot of flexibility, and it’s easy to tailor it to your needs. The free version has an impressive array of features that can build your knowledge and confidence in managing your money well.

With Goodbudget, you can see where you think your money’s going, and also the reality of where you’re actually spending it. With a nice visual picture of what’s happening with your finances, Goodbduget can help you control your spending in a positive way and show you what it takes to reach your financial goals.

Image: Nastia Kobzarenko