Hello everybody and welcome back to my channel.
In today's video I'm going to teach you how to budget using Dave Ramsey's EveryDollar
app.
So if you want to learn how to budget like a pro, keep watching.
All right here we are at everydollar.com.
You can actually use the desktop version of the app or just go to the app store and download
EveryDollar directly.
I'm going to be using the desktop version for this tutorial since it's easier and bigger
to see, but there really is no difference between features and functionality of the
two; one's just on your phone and one's on a computer.
If you haven't already, go ahead and create an account.
I'm going to assume you will know how to put in your name and email address and sign up
for things.
After that, let's go and sign in.
Since this is my first time creating a budget, you are going to be brought up to the current
month and everything is going to be blank.
I'm going to click this create October budget button.
What this does, this brings up a template of some very common items that the majority
of everyone has, and it's a great template for starting your budget and getting everything
off to the right foot.
EveryDollar is based on the zero based budget philosophy, which basically that all of your
income minus your expenses equals zero every single month.
What you're going to be doing is you're going to be counting for all the income coming in
and then you're going to give every dollar a home in the budget.
So there's not going to be months where you have an extra 200, $300 just floating around.
With zero based budgeting you are forced to put that somewhere, even if it's just putting
it into savings.
Let's get started.
The very first section that you need to fill out is the money coming in or your income.
There are two ways that you can do this.
You can either lump everything into one line item.
Let's say in this example I get paid weekly and I get paid $1,000, so I can either just
have one line item like this and just put $4,000 and then every time I get paid I can
just click and drag it to that section.
Or you can actually split it out paycheck by paycheck.
I prefer to do it this way because it allows me to easily add new paychecks when there's
months where there are five weeks, you can just click and add a fifth week and then put
the number right in there and then on your next month's budget you can just go ahead
and delete it.
Versus if you are adding it all in one paycheck, normally people don't have nice round numbers
that they are getting paid, so then you have to do some sort of calculations.
For me it's just easier to know that hey, this is what I'm getting paid every single
week and go from there.
In this example, I have $4,000 that I am getting paid.
Now as part of the zero based budget, it is my job to find every dollar a home.
All right, let's go ahead and get started with this.
The very first section is giving.
This is if you pay tithing to your church.
I'm just going to put that I pay a 10% tithing, so you can just go and put that in there.
The next section is savings.
You can see that this is a fund because it has this little piggy bank next to it.
I'm not going to actually go in and put any money in this fund yet because I still need
to budget for my food and my water and my mortgage.
But in this example, let's say that I'm on baby step one, which is to have $1,000 emergency
fund.
If you're not familiar with the baby steps, you can go here on this menu on the left hand
side and it will actually walk you through the different baby steps, and it actually
knows which one you are in based on your budget, which is pretty cool.
Let's say that for my emergency fund, I want to have a savings goal of $1,000.
So you just go right there and you save that.
Let's say that I already have $500.
Now the great thing about these funds is that it remembers month to month how much is in
here.
If I'm able to add money to this fund this month, next month, let's say I add 100 bucks,
next month it will show the starting balance as $600, and then it will help me get to my
goal.
Now with these other funds, you can add other funds.
Let's say I want to do a Christmas fund.
Any item that you add isn't automatically going to appear as a fund, but what you do
is you click on it and then right here you click make this a fund, click the button.
Let's say I want to do $500 for Christmas.
You can do a variety of different funds; vacation fund, emergency fund, Christmas fund, whatever
works for you.
But again, since I have debt and I haven't really allocated any money, I'm not going
to put any money in these funds yet because if I scroll down, I still need to pay my mortgage.
Here is your big housing section.
In this example, let's say that I have a mortgage.
You can just click on it and you can rename these or delete or add things and you can
make these categories work for you.
These are the ones that are most common, so that's why they populate.
In this example, my mortgage is $750, my water bill is 50.
Let's say I don't have natural gas, so that's not something I have to deal with.
$100 for electricity.
I'm going to do cable/internet, since those are bundled.
And 125.
And trash, I'm just got to delete trash because in this example, I don't have that.
I'm going to add another item.
I'm going to add home maintenance because I am homeowner, sometimes there are things
that come up.
Let's say I'm going to be working on my lawn this month and I'm just going to allocate
$50 for that because that needs to happen this month.
So as you are putting in the different amounts of what you're planning to spend during the
month, you'll notice that it is subtracting up at the top.
So I started with $4,000 and it's letting me know that I still have $2,525 left to budget.
So I need to make sure that all of that, this eventually goes down to zero.
For transportation, I'm going to put 125.
That's just gas getting me around town.
Maintenance, I'm just going to put $10.
For me, maintenance is car washes and things like that.
I mean I could put a separate one for car washes or whatnot.
All right the next category is food and it has these two categories right here.
There's groceries and restaurants.
I like that these are broken up because groceries are the basic things that you need to live,
and restaurants are more fun, nice to have things but not necessities.
In this example, let's say I use $500 on groceries for my family and I'm actually going to leave
restaurants blank right now because I don't know if there's going to be enough money in
this budget to go out to eat this month.
Let's talk about budgeting.
Let's say your goal is $500 but just month over month you're not hitting it and you're
realistically spending more like $600.
You need to be honest and open with your budget and realize that you might need to up certain
areas or decrease certain areas.
If you're budgeting higher than you need, then the next month maybe drop it down a little
bit.
That's the nice thing about the budget.
But you do need to remember that if you are upping something, it's going to have to come
from somewhere else, so just be aware of that.
The next section is personal.
These are things; clothing, phone, fun money, hair, cosmetics, subscriptions.
Since I know that I still have $1,000 to pay off on my credit card, I'm not going to allocate
anything for clothing or anything fun.
I know that I do have a hair appointment this month.
I'm going to get my hair cut and colored.
It's going to be 100 bucks.
I'm hoping that can happen, but depending on what's left at the end, we'll see if I
might have to cut that.
Lifestyle; these are for things, it's kind of similar to personal, but it's things that
are associated with you; your pets, your children.
So pets, children, entertainment, that's kind of broad.
Some people like to switch that out.
You can put movies.
I'm going to put sports.
Now when you are using EveryDollar, you click these six dots on one of the [inaudible 00:07:14]
items or up at the main category and you can move those around.
Let's say I want to put sports next to movies.
And I'm going to add a section called back to school, even though it's October, let's
just pretend.
I'm going to move that up by the kids.
It's back to school time; we're going to have to have $150 for back to school, clothes and
supplies.
Now there is this category here called miscellaneous and this is actually one of my favorite categories
because even though you are doing the budget and you are doing your best to try and anticipate
what you will be spending and needing over the month, for me I find that there are things
that I end up having to buy that I don't necessarily plan on or think about at the beginning, so
I like this miscellaneous category because it's kind of a catchall for those.
I'm just going to say $150 for catchall spending and we'll go from there.
Health; this is things like the gym, doctor's visits, medicine.
Say I go to the gym and it's $100 a month.
But I'm not planning on having these two expenses this month.
This last section; this is different types of insurance.
These are pretty standard month to month.
I'm just going to throw in some example numbers here.
Let's say my home and auto insurance is just bundled into the same payment.
I'm going to get rid of this.
I don't need identity theft insurance, so I'm going to delete that.
All right, now we are to the very last section, which is debt.
To keep this example simple, we'll just say that the only debt that I have is a credit
card payment.
You can click on that and then I'm going to add the starting balance of the credit card
to $1,000.
I'm not going to mess with any of these ones right now.
Now remember, since I'm in baby step one, I actually need to go and create a $1,000
emergency fund before I even start tackling any of the debt.
I'm going to go down to that emergency fund.
I have $500 in it already, so I have $810 left of my budget, so I'm just going to put
$500 there.
Perfect.
Now I have $310 left for my credit card, so I can go ahead and put all $310 right there.
But going back and looking at some of my other items, I really want to get that credit card
down and paid off, so I don't want to deal with that, so I'm actually going to get rid
of my hair appointment this week and I don't know, let's just put $510 for groceries.
Let's see if I can use some coupons and spend less on groceries this month.
Now that actually allows me to have $500 to put toward my credit card payment, which is
half.
I'll put 500 towards this and then my goal next month will be to pay it off entirely.
The very last section here; if you have very unique needs for your family that don't fall
into these main categories, you can add a group and then you can add different items
underneath each one of those.
All right, now you can see that there is a green check mark up here by the date and it
says it's an every dollar budget, which means that every dollar has a home, every single
dollar is accounted for, which is really, really exciting.
All right, you can see here on the right hand side there is a little pie chart that has
a breakdown of all the money you are spending for the month.
Again, we have $4,000 and here's where it is going.
About 13% is going to debt.
About 13% is going to savings and 27% is going to housing.
So that's where the good majority is going.
That's a lot of money to be going to some of these other things like debt and savings,
which means that you don't have a lot of extra money to do fun things like go out to restaurants.
This month I couldn't get my haircut.
You have to sacrifice.
That's just the reality of when you're in debt is that you don't have money to do these
things.
That's what I really love about doing this budget is it makes it really, really clear
where all of your money is and where it's going.
Another thing that I want to call out with EveryDollar, if you have categories that you
spend a lot, you can just click on it.
There's a little star right here and you click add to favorites group and now it creates
a new section right underneath income called favorites.
These are things that maybe if I'm going to the grocery store every week.
Or another one that I can add, I'm going to add gas for my car because I'm probably filling
up once a week.
And I'm going to add miscellaneous because it seems like miscellaneous things kind of
always up here.
Now let's go up here to these transactions.
So if you click on the accounts button, this is actually going to bring up a prompt to
try EveryDollar Plus.
We are using the free version of EveryDollar, which means that I have to manually put in
all of the transactions during the month.
But what EveryDollar Plus does, it connects with your bank and it automatically pulls
in the transactions.
I'm going to show you an example of what that looks like.
It makes it so easy because all you literally have to do is drag and drop, and then you
could do your budgeting and put everything in their categories within 60 seconds and
be on your way.
I really would recommend doing this.
You can try it for 15 days free.
And trust me; you will not want to go back.
It is $100 for a year or $10 a month, but I find by having this convenience, it saves
me a lot more time and I actually end up saving a lot more money because I'm sticking to my
budget, it's making it so easy.
So for me the $100 a year is totally, totally worth it.
All right, so now let's go to the transaction section.
Go up to the top left corner, click this plus sign.
This is where since we are using the free version, we're going to have to manually go
in and put some of these transactions.
You click add new.
I'm going to do an income first.
Let's say that I'm getting paid on the first Friday of the month and I'm just going to
put employer, and then what you do is you choose where you want this to go.
This is going to be a paycheck one and you click track income.
You can see right here before they have these gray lines underneath it, that means there's
nothing in there, but when it's all the way green, it means that you have completely filled
up 100% that section.
So I was expecting to get paid 1,000, and I did get paid 1,000.
Let's go in and add a few other transactions.
Next we're going to click expense.
Let's say that I did $100 on this date and I'll just say grocery store, and then you
click, and since I already saved groceries as a favorite, it's right there and you just
click and do that.
You can see when I scroll down to groceries, the bar is about more or less one fifth of
the way completed.
I spent $100 and my goal for the month is 510.
Now I'm going to show you an example of splitting an expense.
Let's say I pulled $150 out of my bank, so I'll just put bank ATM.
Let's say that I spent this money on two different things.
You're first going to click the first thing that you spend it on.
Let's say that I paid my phone and then it will pop up at a split.
So then you go and you add your second item.
Let's say that I spent the second on back to school.
My phone bill was $50 so I'm going to put that there.
You can see that it leaves this zero and says $100 remaining.
You can actually click and click on the $100 remaining and it will automatically fill it
out for you, which is super nice.
Or you can just type it in.
Let's say you did even more things with this, you can continue to add even more splits and
split things up that way.
All right, here are some sample transactions that I created.
If you want them to appear un-categorized when you are creating the transaction, you
just don't assign it to a budget item.
So anything unassigned will appear right here.
Now, if you have EveryDollar Plus, this is what it's going to look like when you log
into your app.
Anything that you have spent, it is automatically going to pull these transactions in.
It makes it really easy to actually start doing the budget as you go.
Now all I have to do is drag and drop.
My first one is that credit card payment, and then my gym payment, just dragged that,
health insurance, drag that right there.
You can see the green line is going the whole way.
Now I did this to show an example.
I went to Costco; I spent $450, which is crazy.
You can see because I'd only anticipated spending $510 and I spent 550, so it's showing this
red bar indicating that I have overspent in this category.
So in this example, I'm really going to have to look back at my budget and see where I
can cut things.
So maybe that back to school I spent $100 and maybe I can't afford to do anything else
and maybe we can buy the other things that we need later.
The last thing I'm going to do is I'm just going to categorize my mortgage.
That is how you create your budget and then how you load the transactions.
I want to show you one more thing before we go.
Let's say that I'm getting ready to do my November budget now, so you just click this
little button right here, this little down arrow and click November and it's going to
basically clone last month's budget.
Click start planning for November.
You'll notice that it pre-populates the things from last month, so all the categories and
the amounts that I had last month, it's going to automatically have those in there.
This is really nice because once you get going, there are a large majority of items that are
the same month over month.
Your different health insurance or insurance premiums, those are probably the same.
Your mortgage or your rent is the same.
The nice thing about it cloning the budget is that a lot of the items are already pre-filled,
and then you can go in and simply change different items based on what you think.
Let's say for example, now I paid off my credit card, so that is zero in this example, which
is awesome, which leaves me so much more money each month to do some of these other things.
I can go back up and back to school.
That was a one time expense.
I'm just going to go ahead and delete that.
Now I have money to do my hair appointment.
I'm going to go back up and for the remaining money, let's say that everything else is good
for this month and is not going to change.
I'm going to go back up here to my emergency fund, and remember I started with $500, I
added $500 last month, so now my emergency fund is fully funded, so I don't need to put
any money in here right now.
Let's say I've moved on to the baby step.
I already completed baby step one.
Now actually all my debts are paid off.
In this example it's showing the current month, so it still thinks I haven't paid everything
else off.
So now I would be saving for three to six months of expenses in November.
I'm actually just going to throw all that money that's left; $1,060 into creating this
second emergency fund.
Baby step one is you create kind of a baby emergency fund and then baby step three is
to create an emergency fund of three to six months expenses, and you just go from there.
All right, so that is how you create a budget using EveryDollar.
I personally love EveryDollar.
Use it every single day.
I get so excited when new transactions come in and I get to drag and drop them to their
different locations.
I hope you found this helpful.
If you did, and you're going to start budgeting using EveryDollar, be sure to give this video
a like and subscribe and of course check out these two other videos for more helpful tips
on social media marketing and how to manage your life.
See you guys.