Financial problems can create a huge amount of stress in your life. If you’re routinely relying on credit cards to get by every month or struggling to pay your bills, it’s time to make some serious changes. And that starts with a budget.
A few small steps are all it takes to become a successful budgeter. Fortunately, financial expert Dave Ramsey has the exact baby steps already laid out for you in his popular budgeting tool EveryDollar.
EveryDollar is budgeting software designed for the person who can’t stomach the thought of tracking their expenses in an Excel spreadsheet. This article will look more closely at the pros and cons of EveryDollar, as well as how to use it.
In this review:
Getting to Know EveryDollar
EveryDollar is a no-frills budgeting app created by personal finance expert Dave Ramsey. It supports a zero-based budget, which means you account for every dollar you earn by assigning it to a category, such as bills, entertainment, and savings. The goal is to have no money left over at the end of each month.
When you’re using EveryDollar, you can also assess where you are in the seven Baby Steps, Ramsey’s personal method for attaining financial wellness. The Baby Steps include:
- Save $1,000 in an emergency fund
- Pay off all debt (minus the mortgage) using what’s called the debt snowball method
- Save 3-6 months of expenses
- Invest 15% of your income for retirement
- Start a college fund for your kids
- Pay off your home
- Build wealth and give more
How to Use EveryDollar
EveryDollar is only available to customers in the U.S. and Canada. Once you’re signed up, you can begin creating your first budget. EveryDollar comes with eight preset categories, but you can set up as many of your own custom categories as you want.
Next to each category, you’ll set a planned monthly budget amount. This is the total amount you expect to spend in that category during the upcoming month. Within the categories, you can make notes and track individual transactions. EveryDollar will show you how much money you’ve spent in each area as the month progresses.
If you’re using the free version of EveryDollar, you’ll have to track your expenses manually. The paid version, EveryDollar Plus, uploads your transactions for you — you’ll just need to drag and drop them into the correct category.
However, the Plus version costs $99 a year. If you’re interested in EveryDollar Plus but aren’t sure if you want to shell out the membership fee, you can try that version with a free 15-day trial. Or, if you join Dave Ramsey’s Financial Peace University, you’ll get a one-year subscription to EveryDollar Plus.
The Pros of EveryDollar
Starting a budget is considered step zero in the Baby Steps method, so EveryDollar can be a way to get started on achieving your financial goals — especially if you don’t consider yourself a very financially savvy person. All you have to do is input what you spend, the date, and the merchant before assigning the transaction to a budget category, making it incredibly easy to track and budget your money.
EveryDollar even lets you split your transactions. For instance, let’s say you went to Sam’s Club and spent $140, but $120 of that was for food and $20 of that was for clothing. You can divide the transaction between those two separate categories.
The app syncs between multiple users, too, so it’s easy for couples to track their finances simultaneously. At the beginning of a new month, you have the option to copy last month’s budget and adjust your planned spending as needed.
If you sign up for the paid version, EveryDollar will automatically connect to your bank account and upload all your transactions for you. You’ll just need to assign each item a category.
The Cons of EveryDollar
If you choose to use the free version of EveryDollar, you’ll have to track your spending manually. There is a paid option that will upload your transactions for you, but it comes with a $99 annual fee. This can be a lot of money to pay for a little extra convenience, especially if you’re trying to cut your spending.
Plus, some people find the software lacking in certain areas. For example, EveryDollar won’t track your investments for you. If you’re looking for a more robust software that includes this category, you might want to consider another option like Mint or YNAB (You Need a Budget).
If you have any long-term financial objectives or just want to take a holistic look at your overall spending, you may want to use a program such as EveryDollar. EveryDollar is a great option for someone who needs to get their finances in order and wants a simple solution using adaptive technology. The free version is also fairly user-friendly.
However, there are many other similar programs, so it is important to compare your options and select the tool that gives you the best and most convenient view of your finances.