Beacon is an envelope budgeting app. You budget the old-school way, and the app handles the math and the day-to-day work.
What is envelope budgeting?
Envelope budgeting means setting aside money into marked envelopes for specific purposes. That could be rent, groceries, or saving for a down payment on a house. Once money is set aside for a purpose, you keep your spending in that category to what is in the envelope.
There are many ways to build a budget. A good place to start is to understand your income, list your bills and expenses, and think about your savings goals.
How Beacon helps you get started
Beacon swaps the cash-stuffing for a digital process. Instead of paper envelopes, you create buckets for your expenses and goals.
Beacon connects to your banking institutions and takes over the ongoing work. It allocates money to your goal and expense buckets on schedule, calculates your Free-to-Spend balance, and matches transactions to the right bucket so your tracking stays current. You run all of it from your phone or the web.
Core concepts and key terms
Read on for the core concepts. To jump straight into setting Beacon up, head to Getting started with Beacon Budget.
Banking institutions
A banking institution is a financial institution where you have a checking account, savings account, or credit card. What matters for your plan is the number of institutions, not the number of accounts. Your plan sets how many you can connect: Essentials includes up to 3 institutions, and Premium includes up to 10.
For example, a savings and a checking account both at Bank of America count as one institution. A checking account at Bank of America plus a credit card at Capital One count as two.
Funding schedules
A funding schedule tells Beacon how often to allocate money to your buckets. It usually matches your pay schedule, but it can be anything you like: weekly, daily, the 15th and last day of the month, and so on.
When a funding day arrives, Beacon has already worked out how much to allocate to each expense based on its target amount, due date, and how many funding days are left before the due date.
For example, say your rent bucket has a target of $1,200 due on the 1st, and you have two funding days before then. Beacon allocates $600 on each funding day so the bucket is fully funded when rent is due.
Buckets
Buckets are Beacon’s version of envelopes. You create them for your expenses and goals. Each bucket has a target amount and a due date. For recurring expenses, the due date can repeat on a schedule, such as the 1st of every month. For a one-time expense, the due date is a specific date in the future. Once a one-time due date passes, Beacon no longer funds that expense.
Beacon keeps allocating money to an expense until its due date. Once you pay the bill, Beacon sees the transaction and spends from that bucket automatically.
Beacon can also spend from a bucket when you set up a spending configuration. A spending configuration can be tied to a specific merchant or a general category. As new transactions come in, Beacon tries to spend from the matching bucket and keeps a record of it.
Free-to-Spend
Free-to-Spend shows how much money in your checking account is really available to spend without taking money away from your upcoming expenses and goals.
It is the amount left after Beacon accounts for the money you’ve already allocated to your budget.
Expenses
Expenses are usually your recurring bills and regular spending, such as rent, Netflix, groceries, or electricity. You create an expense for each bill or regular expense and set its target amount and due date.
You then attach a funding schedule, and Beacon allocates money to that bucket each time the schedule runs. For recurring expenses, the due date repeats according to the schedule you set. For one-time expenses, funding stops after the due date.
Goals
Goals work like expenses, but they are designed for one-time or longer-term needs, like a new couch, a new laptop, a home repair, or a vacation.
Pick a target amount and a funding schedule, and Beacon handles the allocation. Both expenses and goals are buckets backed by your checking account(s).
Free-to-Save
Free-to-Save shows how much money in your savings account is really available to save toward something new.
It is the amount left after Beacon accounts for the money you’ve already allocated to your vaults.
Vaults
Vaults are backed by your savings account(s) and have the same core features as expenses and goals. They are designed for longer-term savings, like a new car, a wedding, or a vacation.
Pick a target balance and a date by which you want the money allocated, and Beacon works out the math.
One thing to know
Beacon does not directly access your accounts, and money cannot be moved in or out of your bank accounts from within Beacon.