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Goodbudget Review: The Hands-On Digital Envelope System

Budgeting, Personal Finance
goodbudget-app-review

There are many ways to approach building a budget. One traditional method, known as the envelope system, involves physically dividing your cash into separate envelopes for expenses like groceries and your cell phone bill.

Goodbudget is the virtual — and less risky — way to do this. This website and mobile app let you specify how you want to spend or save your funds. The basic free membership is an effective way for rookies to control and track their finances, but folks with expansive budgets might want to upgrade to the paid membership.

What is Goodbudget?

Formerly known as Easy Envelope Budget Aid, or EEBA, Goodbudget is a budgeting service that helps you log and allocate your finances. You can access it via your web browser or download the free app on iOS and Android devices from the App Store and Google Play store. You just need an email address and password to sign up. Your account syncs between the app and website, so you can easily manage your budget at home or on the go.

Goodbudget puts a modern twist on the old envelope tactic. The idea is to divvy up your money into digital “envelopes,” or categories based on wants and needs. For example, you set aside $100 in one envelope each month to use for eating out and $150 in another envelope for gas. You can choose from pre-labeled envelopes or create your own.

How does it work?

Goodbudget gives you “regular” envelopes for your frequent expenses like rent, groceries and entertainment. Use “more” envelopes to allocate money toward annual expenses and savings like a vacation, Christmas gifts or an emergency fund. Start by customizing your envelopes, adding your income and listing a financial “account” like a checking account, savings account, credit card or cash.

Every time you spend or receive money, log it in your Goodbudget account. Once you’ve assigned an amount to each envelope, you can start to enter your transactions and see how they affect your budget. For example, say you allot $200 per month to your grocery envelope. You make a trip to Wal-Mart and spend $50 on food. Afterward, click “add transaction,” enter the store name and the amount you spent, and select your grocery envelope. That $50 will be taken out of the envelope, and you’ll have $150 left to spend on groceries for the month.

Each envelope’s balance is represented by a colorful bar on your home screen that adjusts to reflect your activity. Green means you have money left in the envelope; red indicates you’ve gone over budget.

Pick your plan

There are two Goodbudget plans: a free plan and a paid Plus plan that costs $5 per month or $45 per year. Both versions let you log into your account on multiple devices, raise or lower your budget as needed, transfer money between envelopes, schedule future transactions and set email notifications for scheduled transactions.

You can import your bank transactions using a supported QFX (Quicken), OFX (MS Money) or CSV file to make recording your history less tedious. Download the file from your bank’s website, then upload it to Goodbudget and select the corresponding envelope for each transaction listed. Both plans also include charts and graphs that visually represent your spending and budgeting habits.

goodbudget chart

Here’s how the two differ:

 Free planPlus plan
PriceFree$5 per month or $45 per year
Number of envelopes10 regular, 10 moreUnlimited regular and more
Number of accounts1Unlimited
Connected devices25
History remembered1 year5 years
Priority email support NoYes
Web versionYesYes
Syncs to your financial accountsNoNo

As you can see, the free version has its limitations. For example, it restricts users to one financial account. So those who want to monitor their credit card and cash spending simultaneously can do so only if they pay for the Plus plan. The free plan gives budgeters a maximum of 10 regular and 10 annual envelopes, whereas Plus plan members can track as many categories as they please. Plus members get the added perk of priority email support, which means the Goodbudget team will answer their messages quicker.

The ‘good’ in Goodbudget

Users say Goodbudget is easy to use for the most part, according to reviews posted in the App Store and Google Play store. However, we had to poke around a bit to get familiar with the service. We recommend consulting the user guides and instructional videos on the Goodbudget website before you get started.

Goodbudget helps put your spending in perspective, because it lets you break down your budget by expense and view personalized reports. Also, you can play around with your envelopes, adjusting allowances as you see fit.

The ability to access the same Goodbudget account from multiple devices is useful for partners who want to share their activity.

The not-so-good

The free version isn’t a realistic option for everyone. Some users find it doesn’t include enough envelopes and dislike that it restricts them to one financial account. Of course, the paid plan lifts these restrictions, but paying for a budgeting service seems counterproductive.

Another notable downside is that you can’t control everything from the app, regardless of the plan you choose. For example, you must use the web browser to edit your budgeting period or listed accounts. And entering purchases is time-consuming; even if you import files from your bank account, you still have to categorize each transaction manually.

The verdict

Goodbudget is fairly easy to use but high-maintenance. It doesn’t automatically sync with your bank accounts or credit cards, which means you have to manually enter all of your transactions to stay up to date. It’s a helpful tool for beginners looking for a hands-on approach to budgeting.

The free version of the app is limiting and might be too basic for most users. The Plus version will provide a more accurate, all-encompassing picture of your finances. But paying to use a budgeting tool may not be the best option for those trying to watch their spending.

Lauren Schwahn is a staff writer at NerdWallet, a personal finance website. Email: lschwahn@nerdwallet.com. Twitter: @lauren_schwahn.