HOW TO CREATE A BUDGET AND STICK WITH IT
Are you struggling to keep track of where your money goes? Do you need a budget but just can’t seem to sit down and create one? Let me show you how to create a budget and stick with it!
UNDERSTANDING A BUDGET
Budgeting is one of those things that is a fairly simple concept, but harder to make and maintain. However, you do need a budget! Why? Well…how are you doing without one?
Budgets can be explained simply as ‘money in’ and ‘money out.’ They remind you how much money you have coming in, so you can freely spend what you have once the bills are paid. Let me show you how I budget and how easy it can be!
I use the program designed by Dave Ramsey for my household budget. I find it easy to set up and easy to you. You can set it up directly from your computer and even download it in app form. Best of all, the FREE option is all you need!
First, head to everydollar.com to create your free account.
Create Your Account
- Verify Your Email
Begin Setting up Your Budget
CREATING YOUR BUDGET
Now let’s get into the numbers! The first thing you will notice is that there are 2 columns. A PLANNED column and a RECEIVED column. Input how much you plan to receive for the entire month under ‘planned.’
The default setting will call this PAYCHECK 1, but you can edit it by highlighting and typing in your preference. For example, McDonald’s check, etc…If you want to track more than one income source, simply click the ADD INCOME button. Add the amount you received, the date, and from what source.If you receive multiple payments in one day from different sources, you can click the ADD A SPLIT and input both at the same time. For example, $500 from McDonald’s and $200 from Birthday Money, etc…
ASSIGNING A PLACE FOR EVERY DOLLAR
Now, you will repeat the same steps you used for adding your income to assign a dollar amount to each category in which you spend money.
They give you suggested categories, but you can add/delete/change the name of each one. For example, they give you a Housing Tab with Mortgage, Water Bill, etc… Simply add what you expect to pay for each in the given month. You can change Mortgage to ‘RENT’ if it fits better.
You will do this until your ‘budget amount’ is equal to the amount you planned on receiving. Do this until you have created an EveryDollar Budget. You will see a PLANNED and a REMAINING tab. As you keep a record of your transactions, you can click on the REMAINING tab and change it to show how much you’ve spent for that particular category.
As you hover over a specific category, simply click on it and choose add new to record your transaction.
STICKING WITH IT
Creating your budget is only half the battle. Once you have it set up, you need to remember to record your transactions. You can try to record them after every transaction, but I prefer to set aside some time a specific day of the week and do all the week’s transactions at once.
For example, I try to go through my bank account and match up the transactions on Friday afternoons. That way, I know how much money I have left for the month and can plan my weekend and the following week accordingly.
It takes time a discipline to set up a budget and stick with it. But once you make it a habit, it’s truly a freeing experience. You don’t have to feel guilty for spending extra money for the month because you’ve decided beforehand what to spend those extra dollars on. Now, you can tell whether you have enough to eat out, or if staying in is a better option for you to reach your goals.
EveryDollar’s free features are sufficient enough for anyone to successfully create and maintain a budget. But they do offer a PLUS feature that automatically pulls each transaction from your bank account.
The cost is $99/year which makes it $8.25/month. If you struggle to sit down with your bank statement and record every transaction, this might be a good fit for you. Sometimes an extra $8.25 a month is worth your sanity and if it makes your life a little easier – go for it!
Even the FREE version of EveryDollar will allow you access their extra features coined by Dave Ramsey as “Baby Steps.” These are 7 steps you can take to get out of debt, create an emergency fund, build wealth, and secure a financial stress-free future.
My husband and I have followed these 7 steps and currently use EveryDollar for our budgeting needs. It takes time and discipline, but we hardly ever have to stress about where our money goes.
Keep your eye out for more to come on these 7 Baby steps.
What’s the hardest part of keeping track of a budget? Do you use another system? I’d love to know! Drop me a comment below.