I know I owe you guys a full post on our debt free journey… but today I thought I’d start with one of the very first things you should start doing if you’re not already… which is creating a monthly budget. I’m teaming up with EveryDollar, which is Dave Ramsey’s FREE budget tool. If you’re a little intimidated by creating a budget… don’t worry! It’s super easy, and it’s a great way to knock out debt and tackle your goals. It’s so important to be intentional with your money instead of wondering where it all went at the end of the month. The goal of the tool (app + desktop available!) is to create a zero-based budget, which is a way of budgeting where your income minus your expenses equals zero, so you know exactly where every dollar is going before the month begins. I’m also giving away an EveryDollar Plus subscription (which is the paid version that automatically syncs with your bank account) so be sure to read on for details!
Creating a monthly budget is super important… to set your goals and priorities for the month, to keep yourself tracking against those goals, and to know exactly where your money is going. It’s no fun to get to the end of the month and wonder… where did all of my hard earned money go?
To make a zero based budget, I’d recommend signing up for EveryDollar (it’s free!). You can use it on your desktop or mobile device, and they sync beautifully. And you can share the budget with your significant other, so you’re both on the same page.
First, you’ll track your monthly income. That’ll be paychecks, side hustles, or any other cash you plan to bring in that month. Next, you’ll track your monthly expenses. Things like rent, food, cell phones, etc. Start with the four walls — food, shelter, utilities and transportation and budget from there. Think about your month in advance — do you need birthday gifts that month? Do you need new winter boots? Budget it!
Your goal is to budget until you get to $0, and you’ll get a fun little notification at the top that says, “It’s an EveryDollar budget!” What do you do with leftover money once you’ve covered everything you need that month? I’d recommend following the Baby Steps. So if you don’t have any sort of savings, begin with $1,000 in a starter emergency fund. Next up, I’d tackle ALL of my debt. When we were getting out of debt, we threw every extra dollar at our debt snowball. We cut down our cable, we didn’t take expensive vacations or buy fancy clothes, I didn’t get my hair colored for a year (I know, right?!). It’s up to you on how extreme you want to be, but every dollar you can throw at your debt snowball, the faster you’ll be done! If you’re debt free already (go you!), you’ll want to make sure to build up your fully funded emergency fund of 3-6 months of living expenses. After that — you can save for a house, or if you have a house already, you'll start saving 15% of your income into retirement, fund your kid’s college, pay off your mortgage, build wealth and be generous along the way!
You can download the app and sign up for an EveryDollar account for free on their website! Let me know if you have any questions or run into issues when creating your monthly budget. I’d be happy to help! And if you’re not sure how much to budget for certain things, I found this article super helpful. Now to the fun part… if you want to win a subscription to EveryDollar Plus, be sure to leave a comment below with what baby step you’re on OR what your financial goal for the year is! And if you haven’t thought about that yet, now is a great time to make a goal! It could be anything — pay for a vacation in cash, create your first monthly budget, pay off your first student loan, whatever! I’ll draw a winner by Wednesday, January 23 at 12pm EST! Good luck!