It's not free, but Mvelopes (http://www.mvelopes.com/index.php) sounds like it might do the trick.

I've been doing the same thing with Excel since March using a set of rather complicated formulae. I still don't have any more money, but I spend it better and don't go overdrawn anymore. It also helps me save for the unexpected.

If you have a palm, there is a little expense app that will do the trick.

Every morning on the way into work, I usually pick up some breakfast, and a couple of energy drinks. This comes to about $7 dollars.

When I DON'T purchase these things, I make a transaction on my palm. At the end of the month, I total and transfer that money into an investment account. Basically rewarding myself for not buying crap I don't need.

Now, I don't think this would work for a bunch of "Virtual" accounts as stated above. But, instead of keeping seperate virtual accounts for car maintenance and such. Why not just keep one savings account, and split the total with a percentage? Say, 20% for Auto, 40% for college, 40% for medical?

You can do this quite easily in Quicken. Click on the "planning" drop down menu and choose "savings goals." You can create as many goals as you like. What Quicken does is create a virtual account (added to the "assets" list) into which you can deposit money. It asks for a dollar amount and date by which you want to attain your goal, but if you are just tracking savings or setting aside money in general for, say, car repairs, you can just select a date way out in the future and a ridiculously high dollar amount.

Once created, you select "contribute" from in the savings goal screen and "deposit" money from any of your other, regular accounts. Quicken keeps track of where the money comes from, also. In the register of the real account, you will see a deduction for that amount and your new balance will show as being lower. When you reconcile your accounts, it automatically adds the amounts back in so you won't have any problem. Then to have the money go back into your real account (remember, it never actually left there) you do a "withdrawal" from the savings goal. It will not let you withdraw more money back into a real account than came from that account. If you want to ever see the actual balance in your "real" account, you select the "view" menu in the account and check the "hide savings goals" option. You can also set up automatic, recuring transfers.

This works great and is like a virtual envelope budgeting system.

I was, as you can probably tell, very excited to learn about this feature. I had tried Mvelopes but did not like it all.

I use Quicken and also use Virtual Accounts. The trick is rather complicated, so I blogged about it. Here's the link (& shameless self-promotion):

http://www.amountaintop.com/financial_hack_virtual_accounts

I just created like 10 or 12 INGDirect accounts, to physically classify my money. :-) It works, they're all joint accounts so my wife and I can both see where we stand for vacation or car repair or whatever at all times... it works for us.

I would just use MS Money for this, especially since you already have it. Just go to the accounts page and create a new one for every "virtual account" you want to keep. When it asks for the bank that the account is at, just say its not listed and type in VIRTUAL. There's no need to emulate an account - MS Money has facilities for accounts built in. You can even transfer money in between the various accounts you set up. The only drawback I can think of, is if you already use Money to track your real account, and you use Money to import transactions straight from the bank, then it *might* get a little messy trying to keep all of your money balanced between the real account and your virtual accounts. What you would have to do is be very diligent about transferring money from your real account to your virtual account, and then when you want to use the money in the virtual account, transfer it back into the savings before you actually spend it, or import the data from your bank, to make all of your accounts balance out and add up to whatever total your real account holds. I think you would also have to turn off the feature that automatically balances your account.

Another good reason to do things this way is that if you use online bill pay through MS Money, then you can only pay bills from your real account, and if your real account only has X dollars because you've transferred money from it into your virtual accounts, then you won't be allowed to accidentally use money from those other accounts to pay your bills or other expenses.

The money management software I use, Budget by Snowmint Creative Solutions, works relly well for this purpose. It works on the envelope model. There's a free trial and then it's 29.95. I've been using it to track spending and savings the last two months and it's worked perfectly for my needs. Plus, it's available for Windows and Macs.

http://www.snowmintcs.com/products/budgetmac/index.php

I'd recommend just doing physical accounts. if you have access to a credit union, the minimum balance on a savings account is usually $5 or so (not $300 like most banks). The advantage with this method is that you can do direct deposits every month with your paycheck into each account (eg $xx into the emergency fund, $xx into the vacation fund, etc..) and since it's automatic and in seperate accounts there's less temptation to use the money for something else

I am currently using Envelope Budget by RameySoft for this. Each paycheck, you can distribute the amount across hundreds of virtual envelopes, and then you spend only what is available in a given category. I also use Quicken to track the checkbook, and the balances must match, therefore spending receipts must be double-entered. I'm looking for something else so that I can single-enter receipts and still reconcile the bank statement. I might just have to write it myself.
///d@
P.S. Just saw the website for Mvelopes online system, looks interesting. Instead of entering receipts, you drag-and-drop transactions it downloads from your bank into an envelope. Nifty. Might give it a try.

I'm confused by this, but maybe beause I'm overthinking the question, or the terminology is bad. So, to frame the question: do you want a mechanism for tracking 'unspent' cash, but you don't want to physically remove it from your checking account? From a good bookkeeping persepctive, that's a bad idea, since you can never properly reconcile your checking account again, or the effort is far too tedious.

Transferring small amounts (say, $5) to a savings account is impractical, but that is basically is what you are wanting. Because any money that is not required for your daily needs should be interest bearing account (either an interest bearing checking account, or savings/money market).

To manage your reconciliations, I would set up a new category in Quicken (I used to call mine 'Rain') and establish a new, real, savings account (and set that up in Quicken as well). When spending, use split transactions for your tracking cash withdrawls (or any other transaction that is relevant) and assign the unspend amount to 'Rain', so it reduces your checking account to the level you want, and assigns the savings in a place that is accurate (that is, your checking account is depleted by $5 and $5 is in your 'Rain' category).

Once a month, around the time your checking account statement closes, physically transfer the balance of your 'Rain' category Savings account. That way you have a clear paper trail in each transaction, and you can reconcile your accounts (and your checking balance is accurate at each monthly close). You can do category reports on a monthly basis at the detail level to see how the savings occured, and the transfers will also allow you establish a trend line for savings rate.

I use both Excel and Quicken to do this. Each pay period my wife and I have set up a certain amount to be transferred into our savings account to fund our various funds; car stuff, home (both a maintenance account and our “escrow” account), travel, emergency, utilities, debt reduction, investment, whatever we regularly spend or think we will need. After the transfer we have (ideally) just enough money in our checking account, based on our budget, to get us through the next two weeks. The totals of the funds are maintained in Excel – though I may now look into the Virtual Accounts in Quicken.

When it comes time to pay the bills or other wise spend down those funds we total up what we will need from the various accounts, write the checks, and then transfer the money back into the checking account.

Alan

I'm using GnuCash, which makes this fairly easy. It has an explicit notion of accounts, and sub-accounts, and rolls up the totals of the sub-accounts. The account is the physical account, then I track virtual accounts with sub-accounts. It makes reconciliation fairly easy -- the value of the top-level account and what my bank says I have should be the same.

It also avoids a (potential) problem with having a lot of small physical accounts. There are usually nice interest rate bumps at the $1k/$5k/$10k points. From my standpoint, the slight extra effort of keeping the sub-accounts is more than outweighed by nearly a doubling in interest rate.

GnuCash is also free (both beer and speech). Runs beautifully on OSX, but not for Windows, I think.

Wow, those are some really great answers! I really appreciate all the thoughtful advice, and Matt does too (he wrote a response on his blog).

There are a few new things you've mentioned that I need to try out myself. Mvelopes is intriguing and I'm eager to check out the lesser-known software you've recommended.

Thanks, and if anyone has something to add, keep it coming!

I am writing a web-based system to track my finances. The blog entry to track progress on the project is http://hasan.wits2020.net/~hdiwan/blog/archives/000131.html. Please feel free to go there and offer suggestions as to what you'd like to see.

Here are a few more:

http://www.budgetmap.com - Fits in your checkbook like a register but has columns so you can divide the money for different purposes. Read the info at their website; but it's cheaper to buy it at Amazon. I couldn't get used to it, myself, but some people apparently like it.

http://www.ingenlab.com/igmoney.html - IngenMoney. It's free software and I used it for a long time. It takes a while to figure out, and the dates are not displayed as we do it in the US, which takes some getting used to. But it does work pretty well. The main thing I didn't like was not being able to see ahead to where I'd be in a few months.

http://www.globihome.com/products.php?page=products - GBI Home Finance Manager. Read this in another blog, but haven't actually tried it yet. It's an online service that appears to be free, and from what I remember it's supposed to be based on the "envelope system" as well.

Personally, right now I use Quicken, my own spreadsheet in Quattro, and a bunch of different physical accounts at ING and a local bank.

I would like to correct a misconception about classes in Quicken. They are not an alternate to categories;They complement categories. They further refine where, to what, or to whom transactions apply. They even work for accounts. I have different savings goals but one actual acount so I have a class for vacation and a class for homeimprovement funds. When a make a transfer to savings I may have split lines [savings]/vacation and [savings]/homeimprovement with amounts allocated to each so when I run reports I can see how much in my savings account is earmarked for each savings goal.

I went through some of these machinations earlier this year. Here's the story of what I tried and what I'm using now:

http://highunimportance.blogspot.com/2005/07/quicken-killing-or-money-meditations.html

Virtual accounts, mini accounts and envelopes all tied up in the easiest and most efficient cashflow system in the universe: "The B Word". Out of habit, you will ask yourself for approximately 3 months or more...."there must be more I have to do".
http://www.thebword.com

It's a shame Microsoft Money doesn't support them directly. It's something I've requested from the Money team on a variety of occasions. It's even more pressing as in the UK, we have mortgage accounts where you can combine savings, checking and mortgage accounts to offset interest on the loan.

However, I'd have a custom report to see the balance and keep the accounts physically separate as they are in real life

Hi Matt and Frank and everyone else:

I have tried almost every envelope budgeting package and contemporary personal financial package available (i.e. Quicken, MS Money, Snowmintscs, etc.) and still have not found a product that meets my needs as an envelope budgeter. For the past year I have been working on a software package that addresses the issue Matt presented (and many more). I anticipate releasing it in January 2006. It allows you to manage both tangible accounts and envelopes simultaneously. It will truly fill a gap that most other software packages cannot fulfill. Send me an email at email@endevelopment.com and I will add you to the mailing list for the product release.

All my best to you.

Aaron Hampton