Inzolo (www.inzolo.com) is an online, zero-based, envelope budgeting system. It is the work of sole developer Dustin Davis. Just in case you were wondering “Inzolo” is an African word that means peace or tranquility.

Inzolo is obviously designed to support a very particular way of budgeting – it has something to do with envelopes and its zero based – but the system is not explained on the site. If you do not know what envelope budgeting is it would be best to understand it at least in principle before trying to use Inzolo. (I give quick overview of it further down the page.)

The site is still in development. I understand that it is a poor use to time to create tutorials for a product that is still evolving, however the underlying system is unlikely to change in the long term. Laying out a high level overview of goals and use of an envelope budgeting would greatly benefit those coming to it and Inzolo for the first time.

There are some instructional videos in the help section where Dustin explains how the site works, but not why the actions are been done nor what the ultimate objective is.

Inzolo’s budgeting system was derived from the work of author Dave Ramsey. His latest book is The Total Money Makeover: A Proven Plan for Financial Fitness (that’s an Amazon affiliate link by the way) which is one place to go for instruction on the system.

For those not familiar with envelope budgeting here is the briefest of run downs. An envelope budget consists of a number of envelopes. Each envelope represents a category of spending – food, rent, clothing, etc. When money comes in (from a pay check for example) it it divided between the envelopes. When it comes to spending money you go to the envelope for the expense and see if there is enough money for it. If there is you take money from the envelop for the expense, if not you either wait until there is enough in the envelope or move money from another envelope. At the end of your budgeting period if there is any money left in an envelop it stays there and is added to for the coming period. In the good old days the envelopes were paper and contained cash. These days the envelopes are more likely to be categories in a spreadsheet.

Inzolo does all this.

To start with you go through a simple wizard to make a list of envelopes. By default this list is one envelope for each bill which are then grouped into categories. This can make the interface very daunting in the beginning as you you will typically have a long list of dozens of envelopes to manage.

For simplicity’s sake I would suggest starting with just half a dozen categories with a single envelope in each, or one category with half a dozen envelopes. As you become familiar with the system you can break out more envelopes and rearrange them as you see fit. Envelopes can be reordered and recategorised by dragging them around.

A shorter list of envelopes will help you in a number of ways. A feature of the site is that you can assign an expense to an envelope by dragging and dropping. However if the envelope is off the screen when you start dragging, which it often is with a long envelope list, you cannot get to it to drop the expense on it.

Apart from dragging and dropping, which is great for small, discrete expenses, you can also split expenses across several categories. This is good for when a single credit card item includes items from different categories. You open the expense and split it across as many envelopes as you wish. The interface will total up how much you have yet to allocate as you go along.

Similarly when money comes in it is usually in lump sums that have to dealt out to all the envelopes. In this case Inzolo helps you by allowing you to save a particular distribution as a template. It can them be applied to future income. This is really helpful for those of us with a regular income.

Finally the site is set up to take advantage of open financial exchange (OFX) feeds. These are used by nearly every American bank to automate the downloading of transaction records over the Internet. I have talked about my problems with automated downloads before. In Inzolo’s case most of those problems are side stepped. While you transactions can be entered automatically they then have to be allocated to envelopes manually. In the process large transactions can be split across multiple envelopes. Finally you can always enter everything manually, unlike Mint.com.

I should mention that this site has a build in bias for monthly budgeting. When setting up envelopes you are asked for a monthly target amount. With weekly or quarterly expenses you are forced to convert them to monthly totals outside of Inzolo. For a site that does so well with all its other automation tools this seems an oversight.

The interface may not be something you are used to in a web application. Hidden in the list of envelopes on the left of the screen is a whole lot of functionality that can be accessed through drag and drop and edit-in-place. Expect to see more of this kind of thing right across the web in the future. In the case of Inzolo the interface’s functionally is not reflected in its appearance. The videos in the help section reveal a many of the hidden features – just be prepared to watch several times to catch them all.

As a total aside to how effective Inzolo is as a budget, as a web developer I can immediately see the jQuery UI and FamFamFam’s ubiquitous Silk icon set in use. Dustin is obviously a kindred spirit.

Features:

  • Automatically download of online bank records via OFX
  • Manually upload bank records via OFX or Quicken file
  • Extremely rich web application interface
  • Good automation tools that still leave the user in control.

Things it does right:

  • Rigorously supports its chosen budgeting method.
  • Balances flexibility with tools to automate processes.

Things to watch out for:

  • You need to understand envelop budgeting before you start using Inzolo. There is no high level explanation of the budgeting system it has encoded.
  • The inbuilt wizard breaks you budget down into too many envelopes.
  • The site is still under active development – expect occasional bugs and feature changes.

Cost:

There is are free and pro versions of Inzolo.

The free version restricts you to 3 months of transaction data and limits some of the bank integration functions. It is also supported by advertisements. When you first sign up for the free account you are given 90 days access to the fully featured pro version.

The pro version is US$7.23 a month and is advertisement free.