In2M budget system wins raves
By Jenifer K. Nii
Deseret Morning News
Published: May 1, 2007 12:08 a.m. MDT Scott Szabo jokes (and then emphasizes that it's a joke) that Mvelopes, a money management software program from Draper-based In2M, saved his marriage. "Finances were the one thing that my wife and I could not talk about without — we don't argue, but without having discussions that just never ended well," said Szabo, of American Fork. "Since doing this, it's been wonderful." Szabo is talking about Mvelopes Personal, a spending management system from In2M, a privately held Internet and mobile software services company online at www.in2m.com. Late last month, In2M released its latest version of Mvelopes, which pulls together a user's financial data into a single application that can be accessed from any device that can connect to the Internet. From there, the application allows users to check balances, create automatic bill-paying and set up a budget based on, as the name suggests, envelopes. "People can make great decisions, as long as they have the right information," said In2M President Steven B. Smith. "We're helping them make better spending decisions, because they're able to make those decisions based on real-time data." The old envelope method of budgeting is this, in a nutshell: one determines one's expenses (groceries, credit card bills, utilities, cable, clothing, recreation, etc.), and how much one will need to pay. Paychecks are divided among various envelopes designated for specific spending categories. In the envelope method, money must be deposited before it can be spent — you have to have it to spend it. When purchases are made, money from a designated envelope is deducted. When the money in an envelope is gone, either the spending is done, or money must be shifted from another envelope. Either way, Smith says the focus intensifies on making informed spending decisions. Which means more focus on spending within one's means, and less of a likelihood of prolonging or deepening debt. The old envelopes system, according to Smith, "provided some pretty basic, but remarkably important information, for making good spending decisions." "All they really needed to know was not how much they'd spent in the month, but how much was left to spend," Smith said. "By allocating their cash as it came in to different spending areas, they were able to do a much much better job of living within their means, staying out of debt, and investing and saving more money." Those are increasingly rare abilities, as suggested by a U.S. Commerce Department report last month that found personal savings as a percentage of disposable personal income was a negative 1.2 percent in February 2007, amounting to a negative $119.6 billion nationally. "Traditionally, people have used cash to spend, and then we became a check (writing) society, and then we moved into a cash-less society," Smith said. "We've done a great job of creating more ways to spend money, but not as many tools and resources to help people do a better job of spending that money."
First released in 2002, Mvelopes bridges this old-school budgeting system with the latest technology, according to In2M vice president David Neddo. Available for Mac and PC, the version released in April can connect to more than 14,000 financial institutions, daily gathering and updating deposits and expenditures, enabling automatic bill-paying, and allowing users to create 16 different reports detailing their spending cash flows, account balances, funding and more. This information can be accessed by everything from desktops and laptops to cell phones, Neddo said. Because it's Web-based, there's no need to sync the information. "It allows you to really decide on a paycheck-to-paycheck basis how you want to divide that money into those envelopes, tying your budget to real dollars," said In2M spokesman Jeff Stevens. Szabo found Mvelopes two years ago, after an atypically expensive month. "It was after a trip to Disneyland, and there were a lot of expenses one month, and I felt a little out of control," Szabo said. "I pay off my credit cards every month, and all of the sudden I wondered whether we'd be able to do that." The Szabos had used financial management software before, but it never took. Mvelopes took, Szabo said. A loyal user for two years, Szabo said he checks his balances almost every day, and over the last two years the family's checkbook balance has steadily increased. According to in-house research, 73 percent of Mvelopes members reported that their average bank account balance has increased by 10 percent or more since they began using the software. Twenty percent reported increases of 50 percent or more. Mvelopes costs money — $39.60 every three months, or $129.60 for a one-year plan. It also requires a broadband Internet connection for the best experience and uses a platform requiring Adobe's latest Flash player. In exchange, in addition to the software, users receive tech and customer support (via telephone or email, or live chats), and the promise of 128-bit secure socket layer encryption of all sensitive information during transmission and storage of that data behind firewalled, monitored servers. Because the company has worked to make the software user-friendly and the data secure, Neddo says Mvelopes isn't as easily relegated to the shelf. "Sixty-two percent of our customers are logging on once or more per week, and 26 percent log on once a day," Neddo said. "We've made spending management fun, and as a result, it gets used." For Szabo, staying with Mvelopes came down to the convenience of automatically updating data — no hunting down receipts, no coordinating checkbook balances — coupled with the budgeting components. "About a year ago, I talked with my wife and said we could probably do this on our own, with a spreadsheet," he said. "But we decided jointly that the $8 we spend a month (on Mvelopes) is well worth it. It saves us such hassles."
E-mail: jnii@desnews.com