Is the Budgeting App Worth It?

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Have you heard of EveryDollar? EveryDollar is a budgeting app that was created by famed financial expert Dave Ramsey. The budgeting app is meant to piggyback off of Ramsey’s most popular book, The Total Money Makeover.

In the book, Ramsey describes his seven “baby steps” to financial independence. Budgeting is a big part of his plan, and thus, the EveryDollar budgeting app was born.

In this article, we’ll go over the features and other details of the app. We’ll give you plenty of information so you can decide whether the EveryDollar budgeting app is worth your time and money.

I tried the app myself to get a clear idea of how it works, so I’ll share my personal experience with it as well.

Let’s start with some basic details about the EveryDollar app and how it works.

How to Sign Up for EveryDollar

The signup process for EveryDollar is very simple. You start by visiting the EveryDollar home page and clicking the “Sign up — it’s free” button.

After you click on that button, you’ll get directed to a short signup form. It’ll ask for your name, email address, ZIP code and country of residence. In addition, you’ll need to create your EveryDollar password on this page.

Once you’ve entered all of that information, you’ll click “Create My Account.” At that point, an email verification will be sent to the email address you entered when you signed up.

After you’ve clicked on the verification box contained within the email, you’ll get taken to a landing page with a “Take me to my budget” box. Click on the box and you’re ready to get started!

How to Get Started Using EveryDollar

From the “Take me to my budget” landing page, you’ll get directed to a goals page. You have a choice to choose one or more of the following six goals:

  • Pay off debt
  • Save for retirement
  • Stop living pay to pay (paycheck-to-paycheck)
  • Pay for kids’ college
  • Save for a home
  • Travel

You can choose as many of the six boxes as you’d like. I chose the first three: pay off debt, save for retirement, stop living pay to pay.

After you choose your goals, the site will ask you some other questions about your financial situation, such as:

  • Whether you own or rent your home
  • If you have a car
  • Whether or not you’re married
  • If you have kids or pets

Again, you’ll simply choose all that apply here. In the next step, you’ll enter your monthly income.

Your Monthly Income

There’s a space to add each source of income you have. The default for one person is two pay sources. However, you do have the ability to add more if necessary.

After you’ve entered your monthly income, the site will take you to the actual budget. This is where you’ll enter your basic expenses.

Basic Expenses

The boxes all have default names, but you can change the names of the boxes. For instance, one default box asked for our monthly water costs.

Since we live in a rural area and get our water from a well, I don’t have a monthly or quarterly water bill. So I changed the name of that default expense box to Phone/Internet and put our monthly costs for that bill in there.

The default budget has six boxes for basic expenses, but gives you the ability to change names and add more as needed. Don’t worry about adding in groceries, etc. at this point; EveryDollar will ask you about this stuff later.

Transportation Costs

The next step in the budget is to add in your transportation costs. Any car payment you have won’t be included at this point, but they’ll ask you about it later. Gasoline and maintenance costs are the only default boxes mentioned here, but as with all expense sections, you have the option to add boxes.

Food Costs

Food expenses come next. The app will ask you what you spend on groceries, as well as what you spend on restaurant meals.

Personal Expenses

After that, you’ll enter personal expenses. The Personal Expenses section covers items such as:

  • Clothing
  • Cellphone costs
  • Hair/salon expenses
  • Subscriptions
  • Blow money/fun money

Note: Be sure to add all miscellaneous expenses not covered (excluding debts) up to this point.

Again, you can add additional boxes if that doesn’t cover your personal expenses, or you can modify the existing boxes.

Insurance Expenses

The insurance expenses section covers health, life, auto, homeowners insurance and more. Since most health insurance costs are taken out pre-tax by employers, you may want to modify that section.

Either skip the expense, knowing that it is already figured into your net income, or modify your income as if it weren’t.

The same goes for your homeowners insurance if it’s escrowed in with your mortgage payment. Either separate escrow expenses out and record them individually, or just lump them in with the mortgage payment and skip the homeowners insurance expense section.

Lifestyle Expenses

This section is where you’ll enter pet expenses, child care expenses and entertainment expenses. You’ll need to add additional boxes if you have other lifestyle costs.

For instance, you may want to add a section for extracurricular activities. Also, note that entertainment expenses are listed here. We often include going out to eat as an entertainment expense.

You’ll have to decide whether you put restaurant expenses up with food or in with your entertainment budget.

Health

In the Health section, you’ll record expenses such as gym memberships and medicine and vitamin expenses.

You’ll also record expenses for visits with doctors, dentists and other health professionals. If you have an HSA (Health Savings Account) that covers these costs, you can skip this section altogether.

Otherwise, you can record the HSA savings deposits and offset them with the expenses that are paid for by the HSA. Just do whatever is easiest for you and what suits your budgeting habits.

Note that this part of the process could be a bit tedious if you aren’t already familiar with your budget and spending habits. I’ve been budgeting manually with an Excel spreadsheet for years, so I have a pretty clear idea of what my family’s monthly expenses are.

If you don’t already have a clear idea of your budget, do your best estimate for the first one and then modify from there if you need to.

Your Giving Budget

Next on the list is your giving budget. There are two default boxes in this section: Church and Charity. You can modify them as you see fit, and you can add additional boxes.

Your Savings

The system will also ask you about savings habits. You can use the default Emergency Fund box or edit/add your own savings goals.

Your Debts

In this next step, you’ll enter your debt payments. Enter the name of each debtor and the monthly payment.

After you finish this step, the system will tell you how much in monthly payments your debt is stealing each month. It’ll also tell you if you’ve got money left over or if you’re in the hole from a payment perspective.

Just for fun, I wrote my budget in a way that showed me having more month than money. Doing so prompted a screen that showed me how much I was short.

Then it asked me to edit my budget to add in more income or modify my expenses. If you’ve got money left over, it’ll prompt you to assign that money to a spending (or savings) category.

Once your budget is balanced to have zero dollars left over, you’re finished. This is called a zero sum budget, and it’s one of my favorite budgeting tools. When you give every dollar a job, it leaves little room for waste.

This covers the basics of putting your budget together. What happens next depends on which plan you choose.

EveryDollar has two plans you can choose from: The Free Plan and EveryDollar Plus.

EveryDollar Free Plan

The EveryDollar Free Plan is, obviously, free. It comes with the following features:

  • The ability to create unlimited EveryDollar budgets
  • Access to the free phone app
  • The ability to pay off debt using Dave Ramsey’s debt snowball method

This is a good basic starter plan. However, it does require you to add in all of your expenditures manually.

EveryDollar Plus Plan

The EveryDollar Plus Plan does cost money. However, it also includes some great added benefits. The main one is the ability to auto-download transactions from your bank.

The Plus version costs $99 per year, billed on an annual basis. This works out to an average of $8.25 a month.

Note: Since Ramsey touts paying all bills with cash/debit cards, you can’t pay for your EveryDollar Plus membership with your credit card. Debit cards only, please.

If you want to sign up for the Plus plan and get your transactions automatically downloaded, you’ll have to let the system connect to your bank account.

Once you enter your bank information, the EveryDollar system will pull all of your accounts from that bank. You’ll have to manually delete all accounts you don’t want to show up here, but that is pretty easy.

Transaction Downloads

With the paid plan, the system will automatically download your transactions from your bank. It lists them in the right sidebar. From there you can easily drag each transaction into a budget category. As you do, it’ll show you the remaining budget in that category.

If you don’t want to list a certain bank transaction on EveryDollar, you can just delete it. The system really does make it easy to work on your budget, including entering modifications.

You can add transactions manually at any time to your budget. You don’t need to go solely off the updates from your bank.

I was a little worried at first that the system wouldn’t allow me to download my credit card transactions. I use my credit card for rewards points and then pay in full each month.

But the system did have a place for that and it worked just fine in conjunction with my credit card purchases.

Also, when my credit card information downloaded from the bank, the balance didn’t automatically enter into my debt list. I liked this feature, since I’d already entered the debt manually.

However, it did show the debt as a negative in my overall financial picture.

The Debt Snowball

I had a bit of trouble figuring out the Debt Snowball part of the system. It doesn’t give you an auto-prompt to set it up. However, the EveryDollar Help Center showed me how to do that quite quickly, and it’s pretty easy.

Just click on the debt where it lists the monthly payment for your budget. A separate box will pop up that will allow you to enter each debt’s balance.

After you’ve added in all debt balances, you have an option to sort the debts from smallest to largest. This is a nice feature if you’re using the debt snowball to pay off your debts.

As you make payments toward your debts, you’ll be able to see the balance you started with for the month. You’ll also be able to see your budgeted payment, whether or not you’ve made the payment. And you’ll be able to see the new total balance.

The Big Picture Dashboard

EveryDollar’s dashboard is attractive and functional. One of the things I really like about the dashboard is that it summarizes the percentages of your income spent on expenses.

If you like the thought of staying within recommended budget percentages as you manage your money, this is a great feature.

What Happens if You Go Over in a Budget Line Item?

I did a test to see what happens if you go over in a budget line item. I’d put in my average electricity bill of $130 a month when I made my budget.

However, the actual bill for December was $157.73. (No, we’re not energy hogs. Part of our heating system will run on electric depending on the temperature.)

When I dragged the energy payment transaction to my budget, it showed it as a negative number remaining to be paid.

From there I just had to adjust my budgeted amount for electricity. Then, I had to adjust my total budgeting numbers, as the system’s goal is to zero out your month’s leftover money.

What I Like About EveryDollar

Honestly, there’s a lot to like about EveryDollar. The system is fairly easy to use, especially if you get the Plus Plan that lets you automatically download your transactions.

The app paints a pretty clear picture of where you are financially. I really like that you create a new budget each month. Since not all months are the same, this can help you keep better track of expenditures.

Also, the ability to modify downloaded transactions is really nice. I do a lot of goofy things with my bank account. For instance, I’ll pay for something extra the kids want and then transfer money from their accounts into mine.

When those transactions show up in EveryDollar, I can just delete them and the system ignores them.

And I really like the zero sum budget concept the app uses. It is truly an amazing system for minimizing budget waste.

Before I started using the zero sum budget, I would just use leftover budget money to spend as my heart desired. As you can imagine, this habit led to a LOT of wasted money each month.

Now that I’m using the zero sum budget, every dollar has a job. Because of that, I’m much more conscious of my spending as a whole. It’s important to me to to stay within the parameters I’ve created for my budget.

When I wasn’t using the zero sum concept it seemed I had this subconscious attitude that I could just use all of the leftovers as blow money.

What I Don’t Like About EveryDollar

Really, the one and only thing that bugged me about the app was that it costs money. Although $8.25 a month (averaged out) isn’t terribly expensive, it can be hard to part with if you’re uber-frugal like me.

This is especially true when other programs like Personal Capital and Mint will auto-download transactions for free that you can use in budgeting.

Conclusion

EveryDollar is a great app. I found it easy to use even for me, a self-admitted non-techie person.

If you’re not committed to a Challenge Everything Budget system where you challenge every expense, the cost is probably pretty easy to stomach.

After all, $8.25 a month isn’t going to break most people. However, if the cost of the EveryDollar app really bothers, you you might want to consider using something like Personal Capital.

But the EveryDollar app does what it says it does. It makes budgeting and personal finance management easier.

Have you ever used the EveryDollar or similar apps? Or, have you ever used a more detailed system like Personal Capital? Share your experiences with us on the Well Kept Wallet Facebook page.

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