How to Get Ahead of Your Finances With the EveryDollar Budget
The EveryDollar budget app is intuitive and straightforward, but it has some downsides to consider.
Contributing Writer at Tally
September 22, 2021
Rome wasn’t built in a day, and neither is a good budgeting tool. Luckily, instead of building a system from the ground up, there are plenty of financial professionals with tools to help you spend and save wisely.
Enter personal finance expert Dave Ramsey. Ramsey is legendary in the personal finance space and now has an entire corporation focused on helping people get out of debt and manage their finances. Dubbed Ramsey Solutions, this company offers a range of popular personal finance tools, including the EveryDollar budgeting system.
Like many other budgeting apps, the EveryDollar system gives people a clean interface for managing their monthly expenses and repaying debt.
Let's dive into the EveryDollar budget, how it works and how it can help you get ahead of your finances.
What is the EveryDollar budget?
The EveryDollar budget is a software and budgeting method created by personal finance expert Dave Ramsey. While Ramsey's software has some unique features, the EveryDollar budget is essentially a zero-based budget.
The goal is to assign a job to every dollar you earn. By the end of the month, no money is unassigned.
It may sound scary to spend every dollar you earn, but that's an oversimplification. Sure, when you're paying off high-interest debt, like credit cards and personal loans, every single dollar may leave your possession. However, once you pay off the debt, you’ll “spend” the leftover cash by transferring it to savings, where you can access it in a financial emergency.
How does the EveryDollar budget streamline your budgeting?
Though based on the zero-based budget, which has been around for some time, Dave Ramsey's EveryDollar budget app helps you visualize spending. With a scan through your budget, you can see clear color codes and numbers indicating whether you're over budget, under budget or right on track.
If you upgrade from the free version to the paid Ramsey+ — formerly EveryDollar Plus — the system will connect to your bank accounts and credit cards to automatically import transactions. From there, you only need to categorize each transaction.
With this paid premium version, you also get access to Financial Peace University and Ramsey's BabySteps.
Financial Peace University is a collection of online and in-person personal finance courses.
BabySteps are the actions Dave Ramsey recommends taking to achieve financial independence, including:
Saving a $1,000 emergency fund
Paying off all debt using the debt snowball method
Building an emergency fund worth three to six months of expenses
Saving 15% of your income for retirement
Building a college fund for your children
Paying off your mortgage
Building wealth and giving
With the paid subscription, parts of the BabySteps process are tracked automatically, making it easier to see where you stand at each step.
The EveryDollar budget interface also breaks down your spending by percentages and dollar amounts. You can tweak this to show your planned spending, actual spending or the difference remaining between your planned spending and what you actually spent.
How does the EveryDollar budget work?
The EveryDollar budget is about as straightforward as they come, making it relatively simple to jump in and start budgeting. Here's how you set up and monitor your monthly budget with EveryDollar.
Enter your income
Start by entering all your anticipated income in the "Income for [Month]" category. To edit the paycheck line, click on the "Paycheck [number]" text box and edit the name of the check, then click in the "Planned" text box and enter your planned paycheck amount.
If you're a W-2 employee who gets taxes taken out, use your take-home income. If you do your own taxes, enter the gross check amount.
You have the option to lump all your income on one line or break it down per paycheck by clicking the "Add Paycheck" link at the bottom of the category. Adding a paycheck is great for folks who freelance and have multiple clients, as you can better track where your income is coming from.
Enter your monthly expenses
Next, enter all your expenses and expected costs for that month in their respective budget categories. The budget categories include:
The EveryDollar site will have some expense types already in place within their budget categories, like rent or mortgage, pet and child care, internet, electricity and others. However, you can add whatever expense types you'd like by clicking "Add Item" at the bottom of the budget category and typing the name of the expense type in the text box named "Label."
EveryDollar is flexible and allows you to be as detailed or simple as you like. You can lump all your utilities into one expense type or give each one its own line — this is true for all the expense types.
Enter your debts
Like most personal finance experts, Dave Ramsey is big on paying off debts. EveryDollar has a dedicated budget category for debts. Just like your expense types above, you can add all your debts, like a car loan, credit cards, personal loans and more.
Don't enter your mortgage in the "Debt" category, though. The EveryDollar budget places your mortgage payment in the "Needs" budgeting category.
When entering your debts, you will also enter their balances and update the balance every month. If you have the Ramsey+ membership, it will sync your debt snowball and BabySteps updates with your EveryDollar budget, and the system will automatically update the balance and anticipated monthly cost.
This sync allows you to set up a debt snowball process, which is when you focus all your extra money on the lowest-balance debt while paying the minimum payments on all other debts. With this sync, you’ll know if your debt-repayment plan aligns with your budget.
Add new budget categories
If you find you need more budget categories than EveryDollar’s default mode, click the "Add Group" button at the bottom of the screen to create and name a new group. Then, you simply add your expenses as you did above.
Connect your accounts
If you opted for the Ramsey+ subscription, one of its most useful benefits is the automated transaction importing from your checking accounts, savings accounts and credit card accounts.
So, if you go to the grocery store and buy $100 in food, it will automatically show up in the transactions list. You just need to categorize it from there. Unfortunately, some bank's security protocols prevent consistent automated tracking, so you may regularly have to reconnect accounts when you log in.
Connect your accounts by clicking on the "Accounts" button on the top-right section of the page and follow the prompts to add your financial institution.
How do you track your budget with EveryDollar?
Once you set up your initial budget, you can track your transactions to see how well you adhere to your budget. You'll also get a quick look at trouble areas where you may spend more than expected.
There are two ways to track your budget: with automatic import or manual input.
Tracking with automatic transaction imports
If you opted for the paid version of EveryDollar, you get automated transaction importing from all your connected credit cards and bank accounts. Simply click on the "Transactions" button on the top-right section of the page. This will open a list of all your uncategorized transactions.
From the transaction list, categorize spending by dragging and dropping each transaction to its respective expense type. You can also delete transactions you wish to ignore, split transactions among multiple categories or view and edit previously tracked expenses.
Tracking transactions manually
If you opted for the free version of EveryDollar or just needed to enter a transaction manually, click the "Transaction" button on the top-right section of the screen. Then, click "Add New" at the top of the transactions list.
When the "Add New Expense" box opens, select expense or income, then enter the date, where you spent the money or where the income came from, and the budget item it belongs to. Click "More Options" to add a check number and notes to the transaction.
If you need to split the transaction, the "Add a Split" button appears after adding the transaction amount, date and where you spent the money or where the income came from.
Click "Track Expense," and it adds the transaction to the budget item you assigned it to.
Starting a new budget month
Another convenient feature on EveryDollar is the ability to plan. Start planning for the next month by Click the downward-pointing arrow next to the current month at the top of the screen to plan ahead for the next month. Select the month you want to track and click the "Start tracking this month" button.
EveryDollar will copy the information from the current month to the new month you're budgeting for. Then, you can make all the necessary adjustments to the expenses.
Pros of EveryDollar
Like other budgeting software and methods available, there are some good and bad things about the EveryDollar system. Here are some of the best parts of the EveryDollar budgeting app.
Simple to use
EveryDollar has a simple, unintimidating interface with intuitive drag-and-drop functionality. This makes the system easy for just about anyone to jump into and start using. While some people prefer more complex systems, like You Need a Budget (YNAB), most beginner budgeters will likely feel more comfortable with the EveryDollar setup.
Automatic transaction importing
Automatic transaction importing is a gamechanger in budgeting, as it makes it virtually impossible to forget about a transaction and mistakenly go over budget. While this isn’t a rare feature in today's budgeting apps, it's not something you get with an old-school notepad and pen or Excel spreadsheet.
The ability to budget for future months sets EveryDollar apart from other budgeting tools. This allows you to look at future months and see where you may have extra money coming in to apply to your expenses.
Competitors like Mint lack this ability, which can be very frustrating to those who like to plan ahead.
EveryDollar's sandbox-like experience allows you to create a budget that fits your life, not the masses. You can add new budget categories and expense types at your leisure. Plus, you can make your budget as granular or simple as you like.
Links to Ramsey Solutions’ systems
The ability to set debt-free goals in Ramsey Solutions’ BabySteps and Financial Peace University is great, but the ability to connect these goals to your budget makes life easier.
With this connection, you can easily see if your planned debt payments fit your budget and make adjustments as needed.
Best of all, you can give EveryDollar a 15-day trial run before deciding to subscribe. This gives you enough time to get a feel for the system.
Cons of EveryDollar
While EveryDollar has plenty of good features, there are some downsides to consider. Here are some things to think about before signing up.
As of September 2021, EveryDollar runs $129.99 per year after a 15-day free trial. Sure, that's just over $10 per month, but for someone who's already likely on a tight budget, that's a pretty penny to shell out.
Plus, you can get a similar system from Mint for free. Sure, Mint lacks BabySteps and Financial Peace University, but it has goal setting and automatically imports transactions for free.
Accounts randomly disconnect
This isn't so much a fault of EveryDollar as it is the strict security protocols banks have, but your accounts may frequently disconnect. So you may have to reconnect them and enter a security code each time you log in.
What's worse is this reconnection sometimes imports duplicate transactions, adding to the frustration.
Lacks customizable financial goals
Financial goals are a huge part of personal finance. Without them, you’re a flying arrow with no target in sight. EveryDollar sets goals for you in its BabySteps and Financial Peace University, but these are hard-set goals with minimal customization.
Other budget apps allow you to fine-tune the preset goals and even create custom money goals, helping you save money for whatever you'd like.
The debt snowball method isn't for everyone
The debt snowball method is Dave Ramsey's preferred debt payoff process. The debt snowball is great for keeping you inspired by delivering small wins early in the process and motivates users to continue paying off debt. However, you will incur interest charges because you make only the minimum payments on your highest-balance debts, letting them accrue big interest charges.
The debt avalanche method prioritizes the highest-interest debts, saving you cash on interest charges. Some experts prefer this method. The debt avalanche method will save you money, but you may miss out on the quick wins the debt snowball method offers.
No account balance tracking
EveryDollar does a great job tracking expenses, but it doesn't give you a quick look at your account balances. So, you don't have a clue what your bank account balance is without logging into your bank's site.
Other budgeting apps clearly show you account balances and track your net worth in clearly marked areas.
EveryDollar budget: Useful but imperfect budgeting solution
The EveryDollar budget app is sound. Like all budgeting apps, having any system is better than having nothing at all. EveryDollar’s interface is intuitive and simple to use and its interaction with other Ramsey Solutions' apps streamlines debt repayment and other goals. What’s more, its automatic transaction importing makes life simpler.
However, with some glitches, a high price tag and a plethora of free options available, it may not be the right budgeting app for everyone.
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