Most people spend more time watching reality TV than organizing their finances. According to Business Insider, the average American spends over 4.5 hours per day watching television. Watching TV is basically a part time job!
With these statistics in mind, remember you get what you focus on, and what you focus on grows. We’re not anti TV, we’re just pro getting out of debt. We want our money to grow, so we put in time and effort into planning our budget. In our opinion, creating and sticking to a budget is the key to financial success. If you’re new to our story, read on. If you’ve been following our debt free journey so far, thank you and feel free to skip the next paragraph.
We are a family of 4 living in Las Vegas and we are working our way to becoming debt free on a single income – mom is the breadwinner, and dad is the stay-at-home parent. At the peak of our debt, circa 2015, we were $115,956.54 in debt. We had a student loan, (2) 401K loans, financed phones, credit cards, a large credit card consolidation loan, and 2 cars loans. We lived large, and it reflected in our debt! Keeping up with the Joneses finally caught up to our finances. We dabbled in Dave Ramsey’s plan in 2015, but it wasn’t until March 2017 that we recommitted, fully immersed ourselves, and stuck with the program as prescribed. We dusted off the following Dave Ramsey programs we purchased in 2015 and got to work: The Total Money Makeover, The Total Money Makeover Workbook, and Financial Peace University Home Study. I know that’s a lot of material, but when I go in, I go all in! If there’s one item I recommend above all, especially when on a small budget, I would recommend The Total Money Makeover – the physical book (for note taking in the margins and for constant, easy reference). In the first 3 months, from March 2017 to June 2017, we paid off $14,076.71!
Our Current Budgeting Process Explained
In our current budgeting process, we have a two-step system.
Step 1: Budget for each pay period in our customized spreadsheet.
Step 2: Input the budget into the EveryDollar app.
The spreadsheet is for laying out our biweekly plan, a “blueprint” for our money, if you will. We are paid biweekly – every other Friday, to be exact. Then, we translate the info into the EveryDollar app, which we use as a “daily tracker”. The EveryDollar app is in a monthly format, so we simply input the total of 2 (sometimes 3) paychecks’ info for the corresponding month. It may seem like a lot of work, but it’s working for us. Debt freedom, here we come!
Our Spreadsheet – The Blueprint
We created our own spreadsheet on Google Sheets. There were no existing budget layouts that were turnkey for our preferences. Our spreadsheet includes details, such as due dates, in the format. Prior to each pay day, we lay out our financial plan, in our spreadsheet. We budget 1-2 pay periods in advance to have monthly totals, for use in the EveryDollar app. The goal is to stick to the budget set forth!
Below, we’ve completed our budget for June 2017, by paycheck. We give every dollar a name!
Start your per paycheck zero based budget today with our free template!
EveryDollar – Our “Daily Tracker”
Once our biweekly and monthly financial plans are laid out, we transfer the information into the EveryDollar app. EveryDollar is a free budgeting app which aids in building a budget. We use EveryDollar Plus, the upgraded version, which is normally $99 per year which allows you to link your bank accounts for tracking purposes. Since the company I work for offers SmartDollar as a benefit to to all employees (the Dave Ramsey plan & personal finance education for companies), we currently receive EveryDollar Plus complimentary.
Here’s quick video on How to Create an EveryDollar Budget:
It took some time to tweak the monthly layout to our liking; we basically formatted it to mirror how our spreadsheet is organized. It’s just easier to transfer the numbers from the spreadsheet to EveryDollar if the budget lines read the same.
We include this additional step into our process for the tracking aspect of EveryDollar plus. The tracking allows us to see how much we’ve spent on each budget category and where we stand, in real time. My husband and I each have the app on our phones, and we use the same log in information for syncing.
Notes: Our “giving” is directly deducted from each paycheck. My company allows us to donate each pay period to the charity of our choice, through paycheck deduction. Thus, our giving category is not reflected typically in our budget categories in both the spreadsheet or on EveryDollar. Also, we are currently not saving. Other than our sinking funds (savings for expenses), we have our $1,000 starter emergency fund in place (Baby Step 1) and will not add to this until Baby Step 3.
Sorry, we would rather not disclose our monthly mortgage payment until we are on Baby Step 6.
We’ve added the payment due dates to each monthly bill not only in our spreadsheet, but on EveryDollar. Our monthly items are all set on auto pay from our checking account.
Our additional expenses category is for items that we normally use our debit card for.