Okay, sometimes budgets get a bad rap! Many believe that budgets are too controlling, time consuming and complicated. Given the correct tool, budgets can be simplified and quickly put together. And really, it will only be as restrictive as you make it. It wasn’t until Luke and I actually put one together that I realized the power behind this simple tool. Our budget has definitely provided us with some good insight into our monthly spending habits.
Even though we paid more than the minimum amounts on our school loans and even a little extra on our house each month, there was still money that we were frivolously spending. Sometimes, it is hard to account for where all of the money has gone at the end of the month. We were doing good but the truth is, we weren’t doing our best.
Realizing that we could better manage our income and spending, we sat down and did our first budget in January 2018. We knew that we needed a compass to get us pointed toward our goal. So, we did some research and decided to start using everydollar.com. We absolutely love this app. It is super easy to use and incredibly simple which makes setting up our budget and tracking our progress fast and easy. It’s a zero-based budget which involves giving each dollar that is earned a mission before the month even begins. Here is how everydollar.com works:
Once you enter the app/website, the month is listed at the top of the page and underneath there are 11 different groups: Income, Giving, Savings, Housing, Transportation, Food, Personal, Lifestyle, Health, Insurance and Debt. Under each group you will find individual items that you would spend money on within that group. Custom groups and items can be added or changed to tailor the budget to your lifestyle.
At the beginning of each month, Luke and I place our projected monthly income under the income group. The total in that income group populates the top of the budget as the amount that is “left to budget.”
Then we roll down the list and populate the amount of money we want to give, spend on housing items, spend on transportation, etc. As we start to populate the spending fields, the amount of money (our income) at the top of the page begins to decrease. Once all of our necessary expenses are listed, the remaining balance at the top of the page is placed into savings (when we had debt, everything extra was added to our debt snowball).
As the month progresses, we add all of our transactions into everydollar.com. The website easily allows us to see what we have spent in each category and for individual items in the budget. And because I have the app downloaded on my phone, it is super easy for me to add cash transactions almost instantaneously (I will forget to log the cash transactions almost every time if I don’t do it right away). Debit card transactions are usually logged at the end of the week because it is easier for me to spend 15-30 minutes logging transactions than a couple minutes every night. And there is also a pro version of the app that can be purchased which automatically syncs to your bank account to allow for easy transaction additions. For now, we have been doing well with the completely free version.
The first few months we created a zero-based budget, we definitely made some adjustments and mistakes. It took a lot more time setting up and revisiting the budget during that time because we were new to it. This is completely normal and expected.
We were blown away when we really dialed into our zero-based budget after about the third month. Wow, there was money leftover at the top of our budget after all necessary payments were accounted for. We went right ahead and placed that on our smallest loan. Because of the extra money we found in our budget by cutting down on unnecessary expenditures, we were able to pay off our debt more quickly than we thought.
Our biggest piece of advice when it comes to budgeting is to always involve your spouse. Doing a budget together allows you to agree on the goals that you are working toward; the things that are important to your family. Luke and I decided to cut a lot out of our budget to accomplish debt freedom. We decided to not go out to eat as often, didn’t buy any new clothes, and really cut down on our grocery bills. We decided to align our spending with what was really important to us: freedom. We wanted the freedom to plan for our future instead of constantly paying for the past.
It is incredibly easy to sign up for and is completely free so why not start your first budget today. Give Everydollar.com a try and let us know what you think.
The budget is not just a collection of numbers, but an expression of our values and aspirations.
-Jacob Lew
