If you’ve been around my blog for any amount of time, you probably know that I value the importance of personal finance (borderline obsessed, maybe?) and the importance of planning and following a budget.
Covering and tracking how much money comes in each month, in addition to tracking where that money goes, can sound pretty overwhelming. I get it! When I first did a budget before Kevin and I got married, I didn’t have a clue where to start. I had very broad budget categories with a very loose handle on how I tracked those expenses.
I went with the “if there’s money in my account I must be good” principle. For someone who doesn’t carry credit card balances, this way of budgeting wasn’t absolutely horrible, but there was a much better system that would allow me to track my dollars and put them to much better use. I’ve tried several different methods, but my favorite method is utilizing Dave Ramsey’s Every Dollar website and App.
What is an Every Dollar Budget?
An every dollar budget is quite simple – every dollar that comes into our household has a job, and is sent out for a very particular reason. This method of budgeting is very efficient and allows the most in depth analysis of how we spend our money.
Budgets generally have a negative connotation – I can’t do x, or I can’t handle that because i’m on a budget. False – i’ve found this is really not the case at all, and in fact having an every dollar budget allows me to spend money more freely, because I know my money has been marked to be spent in a certain way. Having an every dollar budget gives me the freedom to spend my money the way I want, with no fear that I can’t.
What is EveryDollar.com
Everydollar.com is very simple to use, and makes actively tracking my budget second nature. That is the main reason why I love it so much!
Everydollar.com is an online tool created by Dave Ramsey to assist in tracking your dollars and cents. Once you create an account, you can use a simple, free version or pay a monthly fee to obtain added benefits.
Since I use the free version, i’ll start by explaining what you can do with the free option. Simply put, it’s a money tracking system for your personal budget. With the free version you must manually enter in what your income and outgoing expenses are. The system automatically splits your outgoing expenses into several categories – savings, housing, transportation, food, lifestyle, insurance & taxes, and debt. You also have the option to add additional groups, such as travel, saving up for a car, etc. I love that this system allows for different categories, because it has another tool that can break down what percentage of your budget goes into each category (i’m too lazy to do this myself, plus it’s automatic!). This is very helpful when creating your first budget, since there are plenty of suggested percentages to spend on certain categories, like 5-10% for groceries, less than 25% for a mortgage, etc.
If you chose to pay for the premium version of everydollar, you get added benefits like syncing your bank account so that transactions post automatically. This sounds neat, but it’s not really a feature Kevin and I were willing to pay for. We’ve been quite happy with the free version.
What I do Monthly, Weekly, and Daily
Typically we start each month at the end of the previous – so right before I get my paycheck on the last day of the month, I have a working budget for my money.
For your first budget, input your projected income based off your last month’s income, unless you’re aware of a large discrepancy. Then, do your best to plan out how much each category should need. I suggest looking through your past month’s expenses to create these projections. Remember, don’t worry too much if you go over your budgets for the first month or two – this is certainly a learning experience.
Once everything has been input and planned, I use the everydollar app on my phone to track expenses in real time. If we go out to eat, I input the expenses as soon as possible so I don’t forget about it. Occasionally this might not happen, so I make time in the evenings to go through my receipts and keep the app up to date as much as possible. Kevin and I use the same login information, so he can go in and track expenses as well.
Weekly I go through my categories to see how our projections are going and if any edits need to be made. For example, a particular sunscreen that is normally very expensive went on sale and I decided to purchase something I didn’t really have a budget category for. Therefore I took money out of our pool budget and grocery budget to cover the expense of my sunscreen.
By seeing where we’re at on our budget i’m also able to say yes, we can plan to go out to eat with our friends this weekend, or no we don’t have a ton of money for groceries left so let’s try and eat up what’s already in our freezer.
The more you use everydollar, the easier it is to budget! Everydollar allows you to copy over your budget from month to month, so my August budget became my September budget. All I have to do is go in and add a couple categories, like travel since we have a wedding coming up!
Where to go from Here
If you’re trying to get a handle on your budget, I highly highly recommend giving everydollar.com a chance and taking a stab at an every dollar budget. Be patient and give yourself 2-3 months to get a good handle on your budget! If you’re giving EveryDollar.com a chance, i’d love to hear about it in the comments.