A year of EveryDollar

For the last year or so I’ve been using EveryDollar a free Budgeting App / Web Site published by the Dave Ramsey group. (https://www.everydollar.com)

At first the idea of following a budget, just sounded too constricting and impossible to me, though over the last year, I’ve actually been successful with using EveryDollar to do ….. a Budget (?) It actually works out that at first, the Budget followed my behavior, then my behavior following the Budget. Once I established the pattern, I was able to consistently follow it, with the end result being that my spending has been more under control and paradoxically more liberated.

I’d say this first years has been a success. More of my money is going to my mortgage, and planned expenses, meaning I have more control of my money, as well as less stress. I find myself being more mindful of my spending (which means I have more control over my spending).

Background

Over the years I’ve tried different ideas of tracking my spending. Quicken, GnuCash, MoneyDance. All of these have been based on a per transaction basis, of simply tracking EACH EXPENSE and putting it into a Register. These really weren’t “Budgetting” apps.

I’ve also tried making my own SS and tracking expenses that way, it was a little more satisfying. (Maybe this helped to break down my resistance to a budget).

Now that I have a house and mortgage payments, I felt I had more responsibility and I had project (paying down my mortgage). I had good cash flow, and I was arriving at my next paycheck with more surplus, but I still felt I could do better at controlling my money. (A broad look at my fixed expenses vs what I had left over, left me wondering where so much went).

Sometimes last year I started listening/ watching Dave Ramsey. Before I would listen to Clark Howard (and he was the person responsible for starting me cleaning up my Debts and becoming more financially stable). In fact, before I took out my Mortgage, I was debt-free. Both Dave and Clark are very good advisors, though they are very different.

One thing Dave recommends for his listeners if to live on a Budget, at first when I heard this I imagined at Penny Pinching existence, micro-managing how I lived. Instead, I find myself more wondering just worrying less and sort of excited to see, if how much I will be able to save.

In order to help his users to do their Budgeting, Dave’s company has put out a tool called EveryDollar. Once you have an account it can be accessed via a Websie or an Iphone/Adroid app. Best of all it is Free. (If you want to link it to a US Bank you can for a fee, but I don’t).

About a year ago I started to use it for my Expenses. I thought I’d write a little about how it works and how I set it up, the tools I use to help, and how I use it.

Preperation

For me, the first step to using EveryDollar, Ironically did not involve EveryDollar itself.

EveryDollar tracks Expenses based on Catagories, in order to figure out how much each Catagory would get allocated, I needed to look at my bank account and see where every-dollar went.

Almost all of my transactions are done via PIN, so I was able to simply download my past history from my bank. Sitting down with some paper and my Calculator App, I started by Dividing my Expesnves up into Catagories, based on where I spent the money… (If the place was a Restaurant, then it went into Dining; Grocery Stores went it groceries, etc).

What I saw allowed me to create 3 main categories for things which might occur in lots of diffrent places and where fluid:

  • Dinning
  • Groceries
  • Computer

As well as some very specific Categories for known/fixed Expenses:

  • Cable
  • Health Insurance
  • Homeowners Insurance
  • Cell Phone

The Default EveryDollar interface comes with several default categories already. (I don’t think Computers is one of them, NOTE: I no longer have a computer category in my present budget).

Once I had my Categories I was ready for setting up the App.

Setup

Simply goto https://www.everydollar.com/ click “Get Started”. After verifying your email, the website will take you through a Wizard to set up a basic budget. (Basically, you will fill out a form with all of your details, collected above, it is very easy to adjust these numbers later)

Hopefully, as you go through the Wizard EveryDollar will Congratulate you for having money left over. (At the end they will ask you, if you want to pay for EveryDollar Plus, this is not neccesary, I’ve been able to use the Free Version without any issues.

The neat thing is that once you create the account, you can simply log into it on your phone or another browser and you have all of your details. I have most of my fixed expenses coming out automatically, so once I see these coming out of my account, I just start up my iPhone app and record them (using EveryDollar and (Virtual) Cash Envelopes, my main account has only a fixed amount of transactions per month and it quite boring (except when I can make extra payments against the mortgage). I’ll cover those aspects in a different article.

After Setup/ Usage

This is the simplest part. after you’ve created the account and categories, simply enter every transaction as they come up.

The First few months, it may take some adjustment to get numbers matching your lifestyle.

Also as you record each transaction you become more mindful of where you are spending your cash.

This article is already very long, I have other ideas I’d like to share, on how I use EveryDollar and a Budget for best effect (i.e. feeling more confident about my money, avoiding stress, paying down the mortgage, etc). Things like:

  • Cash Envelopes / Virtual Cash Envelopes
  • Sinking Funds
  • PrePayday and Payday activities
  • Working with stuff not lining on on the month
  • More about the day to day attitude

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