My experience getting started with NeoBudget

In a good budgeting system, you decide in advance how to spend and save your money.  A reader recently brought NeoBudget to my attention as an online tool that can help you easily create and manage a personal finance budget based on the envelope system.

I signed up for the NeoBuget free 7-day trial to check out the system.  The nice thing about the trial is that NeoBudget doesn’t collect any payment information up front.  I liked this because it made me confident that there were truly “no strings attached”.  At the end of the trial, you can subscribe to the service for just $2.50 per month. 

I was signed up for the trial in less than one-minute!  It was very simple. 

Setting up a budget and managing money with NeoBudget

Once you have created an account, then NeoBudget walks you through the setup process with an easy to follow wizard.  There are really just four steps to complete:

1. Create an account – You name your accounts.  The system does not require you to enter account numbers which is a nice security feature.
2. Add envelopes – In this step, you create your budget envelopes or categories.  You can have as many as you like.
3. Income allocation – Step 3 actually has two parts.  In the first, you name your sources of income.  This would include your paycheck and any other forms of revenue you enjoy.  In the second part of this step, you decide how to allocate each of these income sources to the various envelopes.
4. Initial balance – Finally, you have the opportunity to enter the existing balances in your account.  This step also gives you the chance to allocate your existing balances to your envelopes.

NeoBudget was a cinch to setup!  If you have all the information gathered up, then you can finish all four steps in a matter of just a few minutes.

My highlights from using NeoBudget

NeoBudget has a very clean and well-designed user interface.  It is fast and very intuitive.  I really like the way NeoBudget works.  Here is some of what I consider the highlights of the system.

1.  At-a-glance view of balance in all envelopes

The best way to explain this is to show you the screen shot below.  I really like this feature.  You can even choose the colors for each envelope yourself which is a nice way to highlight the envelopes that are most important to you.

2.  Consumer debt worksheet for getting out of debt

NeoBudget includes a worksheet that will help you payoff what you owe on credit cards, car loans and other forms of consumer debt.  It even allows you to choose the order in which you want to attack these debts.

3.  Ability to import transactions from banking systems

The system has the ability to import transactions from your banking accounts which alleviates the need to enter everything manually.  It supports both the Quicken Interchange Format (QIF) and Open Financial Exchange Format (QFX).

4.  Financial data is protected from loss

I like that NeoBudget is an online system.  This way if my computer at home crashes, then I won’t lose all my financial tracking information.  In addition, NeoBudget doesn’t store any account numbers or other information that bad guys could use to steal my money.

NeoBudget Questions & Answers

I was fortunate enough to be able to ask Luke, the developer of  NeoBudget, some questions about his system.  I think you will find this useful in your evaluation.

Why did you choose to create a new personal finance system when so many already exist?

There were many reasons I decided to create yet another one.  Basically it came down to two things. 

First, many of the good envelope-based systems out there are just too expensive.  I wanted to make one that was dirt cheap.  There are many free ones out there too, and it’s hard to get cheaper than that. 

Which brings me to the second reason I created my own.  Nothing I found out there had all the features I needed for my family’s budget, and combined them all in a simple, intuitive online interface.

What is the most notable and unique feature of NeoBudget?

I think the best part of NeoBudget is how it manages income.  When you sign up with NeoBudget, you can specify all your sources of income, like your paycheck and your wife’s paycheck. 

As part of this, you can set goals for each envelope, such as $300 per month for groceries.  NeoBudget will help figure out how to fund that envelope based on the paychecks you have entered.  After you configure all your sources of income, every time you get paid, you simply say which paycheck this is, and NeoBudget splits it out across all your envelopes.  You only have to configure your paychecks once, and NeoBudget applies it every time you get paid.

There are many benefits for handling your paychecks this way.  One thing I did this year was set aside a small amount from each paycheck all throughout the year into a separate envelope labeled “Propane”.  I actually forgot about it through the summer.  Without needing to remember, I was saving to fill my propane tank.  Winter is here now, and I’m thankful for this savings.  It would have been a steep bill had I not been saving all year.

Why did you decide to make NeoBudget an online system?

I had been using some desktop software that I really liked, but I like having my information stored online.  It’s much more convenient that way. 

I can access my budget on my iPhone when I’m at the grocery store, or on my brother’s computer when I visit him in another state.  It also ensures that if my computer crashes, I won’t lose all my financial history.

Some people have told me that they are concerned about storing financial information online.  This isn’t really a problem with NeoBudget.  No personal account numbers or credit card numbers are stored with your budget.  There is nothing worth stealing stored on our servers.  All that is stored is how much money you have allocated in each envelope.

NeoBudget doesn’t automatically connect to bank accounts, but many other financial planning tools do.  Isn’t that very inconvenient?

I don’t think so at all.  This was a choice for security purposes.  I don’t use the other online financial planning tools because I don’t want to give out my account information to people I don’t know and trust.  That would just make me incredibly nervous.

NeoBudget does have an import feature that is almost as good as directly connecting to a bank, but it’s a lot safer.  If your bank lets you download your bank statement in a supported format, you can upload it to NeoBudget.  In this way, you get all your recent transactions without needing to pass sensitive account information to NeoBudget.

Who will benefit the most from choosing to use NeoBudget to manage their personal finances?

I consider NeoBudget to be a mid-level budgeting solution for families.  It has many powerful tools, so it’s not designed for someone who wants a completely hands-off approach to their budget.  But I have also made a great effort to ensure that it’s simple enough to be used without an accounting degree.  It is geared toward people like myself who want to be on top of their personal finances, but particularly don’t like dealing with accounting programs.

What does NeoBudget cost?

I’ve set the price at $2.50 per month, but I offer significant price breaks for semi-annual and annual subscriptions.  Basically, I wanted NeoBudget to be dirt cheap, but I can’t offer it for free because I need to make a living.  For what you’re getting with NeoBudget, I believe $2.50 is very reasonable.

Has anyone else used NeoBudget?  What was your experience?