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HOW TO USE EVERYDOLLAR APP (Tutorial: Budget in 15 MINUTES with a Dave Ramsey Zero-based Budget!) - YouTube
Channel: Morgan Stradling
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Hello everybody and welcome back to my channel.
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In today's video I'm going to teach you how
to budget using Dave Ramsey's EveryDollar
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app.
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So if you want to learn how to budget like
a pro, keep watching.
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All right here we are at everydollar.com.
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You can actually use the desktop version of
the app or just go to the app store and download
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EveryDollar directly.
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I'm going to be using the desktop version
for this tutorial since it's easier and bigger
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to see, but there really is no difference
between features and functionality of the
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two; one's just on your phone and one's on
a computer.
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If you haven't already, go ahead and create
an account.
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I'm going to assume you will know how to put
in your name and email address and sign up
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for things.
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After that, let's go and sign in.
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Since this is my first time creating a budget,
you are going to be brought up to the current
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month and everything is going to be blank.
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I'm going to click this create October budget
button.
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What this does, this brings up a template
of some very common items that the majority
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of everyone has, and it's a great template
for starting your budget and getting everything
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off to the right foot.
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EveryDollar is based on the zero based budget
philosophy, which basically that all of your
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income minus your expenses equals zero every
single month.
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What you're going to be doing is you're going
to be counting for all the income coming in
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and then you're going to give every dollar
a home in the budget.
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So there's not going to be months where you
have an extra 200, $300 just floating around.
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With zero based budgeting you are forced to
put that somewhere, even if it's just putting
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it into savings.
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Let's get started.
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The very first section that you need to fill
out is the money coming in or your income.
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There are two ways that you can do this.
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You can either lump everything into one line
item.
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Let's say in this example I get paid weekly
and I get paid $1,000, so I can either just
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have one line item like this and just put
$4,000 and then every time I get paid I can
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just click and drag it to that section.
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Or you can actually split it out paycheck
by paycheck.
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I prefer to do it this way because it allows
me to easily add new paychecks when there's
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months where there are five weeks, you can
just click and add a fifth week and then put
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the number right in there and then on your
next month's budget you can just go ahead
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and delete it.
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Versus if you are adding it all in one paycheck,
normally people don't have nice round numbers
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that they are getting paid, so then you have
to do some sort of calculations.
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For me it's just easier to know that hey,
this is what I'm getting paid every single
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week and go from there.
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In this example, I have $4,000 that I am getting
paid.
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Now as part of the zero based budget, it is
my job to find every dollar a home.
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All right, let's go ahead and get started
with this.
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The very first section is giving.
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This is if you pay tithing to your church.
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I'm just going to put that I pay a 10% tithing,
so you can just go and put that in there.
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The next section is savings.
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You can see that this is a fund because it
has this little piggy bank next to it.
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I'm not going to actually go in and put any
money in this fund yet because I still need
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to budget for my food and my water and my
mortgage.
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But in this example, let's say that I'm on
baby step one, which is to have $1,000 emergency
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fund.
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If you're not familiar with the baby steps,
you can go here on this menu on the left hand
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side and it will actually walk you through
the different baby steps, and it actually
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knows which one you are in based on your budget,
which is pretty cool.
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Let's say that for my emergency fund, I want
to have a savings goal of $1,000.
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So you just go right there and you save that.
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Let's say that I already have $500.
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Now the great thing about these funds is that
it remembers month to month how much is in
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here.
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If I'm able to add money to this fund this
month, next month, let's say I add 100 bucks,
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next month it will show the starting balance
as $600, and then it will help me get to my
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goal.
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Now with these other funds, you can add other
funds.
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Let's say I want to do a Christmas fund.
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Any item that you add isn't automatically
going to appear as a fund, but what you do
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is you click on it and then right here you
click make this a fund, click the button.
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Let's say I want to do $500 for Christmas.
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You can do a variety of different funds; vacation
fund, emergency fund, Christmas fund, whatever
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works for you.
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But again, since I have debt and I haven't
really allocated any money, I'm not going
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to put any money in these funds yet because
if I scroll down, I still need to pay my mortgage.
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Here is your big housing section.
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In this example, let's say that I have a mortgage.
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You can just click on it and you can rename
these or delete or add things and you can
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make these categories work for you.
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These are the ones that are most common, so
that's why they populate.
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In this example, my mortgage is $750, my water
bill is 50.
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Let's say I don't have natural gas, so that's
not something I have to deal with.
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$100 for electricity.
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I'm going to do cable/internet, since those
are bundled.
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And 125.
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And trash, I'm just got to delete trash because
in this example, I don't have that.
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I'm going to add another item.
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I'm going to add home maintenance because
I am homeowner, sometimes there are things
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that come up.
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Let's say I'm going to be working on my lawn
this month and I'm just going to allocate
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$50 for that because that needs to happen
this month.
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So as you are putting in the different amounts
of what you're planning to spend during the
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month, you'll notice that it is subtracting
up at the top.
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So I started with $4,000 and it's letting
me know that I still have $2,525 left to budget.
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So I need to make sure that all of that, this
eventually goes down to zero.
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For transportation, I'm going to put 125.
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That's just gas getting me around town.
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Maintenance, I'm just going to put $10.
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For me, maintenance is car washes and things
like that.
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I mean I could put a separate one for car
washes or whatnot.
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All right the next category is food and it
has these two categories right here.
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There's groceries and restaurants.
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I like that these are broken up because groceries
are the basic things that you need to live,
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and restaurants are more fun, nice to have
things but not necessities.
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In this example, let's say I use $500 on groceries
for my family and I'm actually going to leave
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restaurants blank right now because I don't
know if there's going to be enough money in
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this budget to go out to eat this month.
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Let's talk about budgeting.
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Let's say your goal is $500 but just month
over month you're not hitting it and you're
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realistically spending more like $600.
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You need to be honest and open with your budget
and realize that you might need to up certain
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areas or decrease certain areas.
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If you're budgeting higher than you need,
then the next month maybe drop it down a little
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bit.
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That's the nice thing about the budget.
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But you do need to remember that if you are
upping something, it's going to have to come
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from somewhere else, so just be aware of that.
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The next section is personal.
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These are things; clothing, phone, fun money,
hair, cosmetics, subscriptions.
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Since I know that I still have $1,000 to pay
off on my credit card, I'm not going to allocate
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anything for clothing or anything fun.
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I know that I do have a hair appointment this
month.
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I'm going to get my hair cut and colored.
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It's going to be 100 bucks.
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I'm hoping that can happen, but depending
on what's left at the end, we'll see if I
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might have to cut that.
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Lifestyle; these are for things, it's kind
of similar to personal, but it's things that
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are associated with you; your pets, your children.
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So pets, children, entertainment, that's kind
of broad.
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Some people like to switch that out.
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You can put movies.
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I'm going to put sports.
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Now when you are using EveryDollar, you click
these six dots on one of the [inaudible 00:07:14]
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items or up at the main category and you can
move those around.
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Let's say I want to put sports next to movies.
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And I'm going to add a section called back
to school, even though it's October, let's
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just pretend.
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I'm going to move that up by the kids.
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It's back to school time; we're going to have
to have $150 for back to school, clothes and
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supplies.
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Now there is this category here called miscellaneous
and this is actually one of my favorite categories
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because even though you are doing the budget
and you are doing your best to try and anticipate
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what you will be spending and needing over
the month, for me I find that there are things
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that I end up having to buy that I don't necessarily
plan on or think about at the beginning, so
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I like this miscellaneous category because
it's kind of a catchall for those.
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I'm just going to say $150 for catchall spending
and we'll go from there.
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Health; this is things like the gym, doctor's
visits, medicine.
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Say I go to the gym and it's $100 a month.
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But I'm not planning on having these two expenses
this month.
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This last section; this is different types
of insurance.
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These are pretty standard month to month.
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I'm just going to throw in some example numbers
here.
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Let's say my home and auto insurance is just
bundled into the same payment.
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I'm going to get rid of this.
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I don't need identity theft insurance, so
I'm going to delete that.
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All right, now we are to the very last section,
which is debt.
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To keep this example simple, we'll just say
that the only debt that I have is a credit
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card payment.
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You can click on that and then I'm going to
add the starting balance of the credit card
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to $1,000.
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I'm not going to mess with any of these ones
right now.
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Now remember, since I'm in baby step one,
I actually need to go and create a $1,000
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emergency fund before I even start tackling
any of the debt.
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I'm going to go down to that emergency fund.
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I have $500 in it already, so I have $810
left of my budget, so I'm just going to put
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$500 there.
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Perfect.
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Now I have $310 left for my credit card, so
I can go ahead and put all $310 right there.
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But going back and looking at some of my other
items, I really want to get that credit card
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down and paid off, so I don't want to deal
with that, so I'm actually going to get rid
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of my hair appointment this week and I don't
know, let's just put $510 for groceries.
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Let's see if I can use some coupons and spend
less on groceries this month.
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Now that actually allows me to have $500 to
put toward my credit card payment, which is
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half.
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I'll put 500 towards this and then my goal
next month will be to pay it off entirely.
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The very last section here; if you have very
unique needs for your family that don't fall
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into these main categories, you can add a
group and then you can add different items
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underneath each one of those.
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All right, now you can see that there is a
green check mark up here by the date and it
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says it's an every dollar budget, which means
that every dollar has a home, every single
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dollar is accounted for, which is really,
really exciting.
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All right, you can see here on the right hand
side there is a little pie chart that has
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a breakdown of all the money you are spending
for the month.
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Again, we have $4,000 and here's where it
is going.
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About 13% is going to debt.
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About 13% is going to savings and 27% is going
to housing.
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So that's where the good majority is going.
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That's a lot of money to be going to some
of these other things like debt and savings,
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which means that you don't have a lot of extra
money to do fun things like go out to restaurants.
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This month I couldn't get my haircut.
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You have to sacrifice.
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That's just the reality of when you're in
debt is that you don't have money to do these
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things.
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That's what I really love about doing this
budget is it makes it really, really clear
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where all of your money is and where it's
going.
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Another thing that I want to call out with
EveryDollar, if you have categories that you
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spend a lot, you can just click on it.
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There's a little star right here and you click
add to favorites group and now it creates
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a new section right underneath income called
favorites.
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These are things that maybe if I'm going to
the grocery store every week.
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Or another one that I can add, I'm going to
add gas for my car because I'm probably filling
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up once a week.
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And I'm going to add miscellaneous because
it seems like miscellaneous things kind of
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always up here.
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Now let's go up here to these transactions.
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So if you click on the accounts button, this
is actually going to bring up a prompt to
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try EveryDollar Plus.
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We are using the free version of EveryDollar,
which means that I have to manually put in
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all of the transactions during the month.
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But what EveryDollar Plus does, it connects
with your bank and it automatically pulls
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in the transactions.
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I'm going to show you an example of what that
looks like.
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It makes it so easy because all you literally
have to do is drag and drop, and then you
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could do your budgeting and put everything
in their categories within 60 seconds and
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be on your way.
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I really would recommend doing this.
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You can try it for 15 days free.
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And trust me; you will not want to go back.
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It is $100 for a year or $10 a month, but
I find by having this convenience, it saves
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me a lot more time and I actually end up saving
a lot more money because I'm sticking to my
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budget, it's making it so easy.
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So for me the $100 a year is totally, totally
worth it.
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All right, so now let's go to the transaction
section.
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Go up to the top left corner, click this plus
sign.
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This is where since we are using the free
version, we're going to have to manually go
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in and put some of these transactions.
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You click add new.
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I'm going to do an income first.
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Let's say that I'm getting paid on the first
Friday of the month and I'm just going to
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put employer, and then what you do is you
choose where you want this to go.
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This is going to be a paycheck one and you
click track income.
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You can see right here before they have these
gray lines underneath it, that means there's
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nothing in there, but when it's all the way
green, it means that you have completely filled
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up 100% that section.
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So I was expecting to get paid 1,000, and
I did get paid 1,000.
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Let's go in and add a few other transactions.
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Next we're going to click expense.
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Let's say that I did $100 on this date and
I'll just say grocery store, and then you
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click, and since I already saved groceries
as a favorite, it's right there and you just
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click and do that.
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You can see when I scroll down to groceries,
the bar is about more or less one fifth of
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the way completed.
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I spent $100 and my goal for the month is
510.
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Now I'm going to show you an example of splitting
an expense.
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Let's say I pulled $150 out of my bank, so
I'll just put bank ATM.
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Let's say that I spent this money on two different
things.
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You're first going to click the first thing
that you spend it on.
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Let's say that I paid my phone and then it
will pop up at a split.
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So then you go and you add your second item.
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Let's say that I spent the second on back
to school.
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My phone bill was $50 so I'm going to put
that there.
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You can see that it leaves this zero and says
$100 remaining.
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You can actually click and click on the $100
remaining and it will automatically fill it
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out for you, which is super nice.
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Or you can just type it in.
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Let's say you did even more things with this,
you can continue to add even more splits and
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split things up that way.
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All right, here are some sample transactions
that I created.
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If you want them to appear un-categorized
when you are creating the transaction, you
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just don't assign it to a budget item.
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So anything unassigned will appear right here.
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Now, if you have EveryDollar Plus, this is
what it's going to look like when you log
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into your app.
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Anything that you have spent, it is automatically
going to pull these transactions in.
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It makes it really easy to actually start
doing the budget as you go.
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Now all I have to do is drag and drop.
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My first one is that credit card payment,
and then my gym payment, just dragged that,
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health insurance, drag that right there.
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You can see the green line is going the whole
way.
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Now I did this to show an example.
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I went to Costco; I spent $450, which is crazy.
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You can see because I'd only anticipated spending
$510 and I spent 550, so it's showing this
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red bar indicating that I have overspent in
this category.
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So in this example, I'm really going to have
to look back at my budget and see where I
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can cut things.
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So maybe that back to school I spent $100
and maybe I can't afford to do anything else
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and maybe we can buy the other things that
we need later.
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The last thing I'm going to do is I'm just
going to categorize my mortgage.
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That is how you create your budget and then
how you load the transactions.
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I want to show you one more thing before we
go.
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Let's say that I'm getting ready to do my
November budget now, so you just click this
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little button right here, this little down
arrow and click November and it's going to
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basically clone last month's budget.
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Click start planning for November.
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You'll notice that it pre-populates the things
from last month, so all the categories and
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the amounts that I had last month, it's going
to automatically have those in there.
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This is really nice because once you get going,
there are a large majority of items that are
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the same month over month.
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Your different health insurance or insurance
premiums, those are probably the same.
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Your mortgage or your rent is the same.
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The nice thing about it cloning the budget
is that a lot of the items are already pre-filled,
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and then you can go in and simply change different
items based on what you think.
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Let's say for example, now I paid off my credit
card, so that is zero in this example, which
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is awesome, which leaves me so much more money
each month to do some of these other things.
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I can go back up and back to school.
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That was a one time expense.
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I'm just going to go ahead and delete that.
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Now I have money to do my hair appointment.
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I'm going to go back up and for the remaining
money, let's say that everything else is good
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for this month and is not going to change.
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I'm going to go back up here to my emergency
fund, and remember I started with $500, I
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added $500 last month, so now my emergency
fund is fully funded, so I don't need to put
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any money in here right now.
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Let's say I've moved on to the baby step.
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I already completed baby step one.
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Now actually all my debts are paid off.
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In this example it's showing the current month,
so it still thinks I haven't paid everything
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else off.
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So now I would be saving for three to six
months of expenses in November.
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I'm actually just going to throw all that
money that's left; $1,060 into creating this
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second emergency fund.
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Baby step one is you create kind of a baby
emergency fund and then baby step three is
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to create an emergency fund of three to six
months expenses, and you just go from there.
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All right, so that is how you create a budget
using EveryDollar.
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I personally love EveryDollar.
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Use it every single day.
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I get so excited when new transactions come
in and I get to drag and drop them to their
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different locations.
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I hope you found this helpful.
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If you did, and you're going to start budgeting
using EveryDollar, be sure to give this video
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a like and subscribe and of course check out
these two other videos for more helpful tips
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on social media marketing and how to manage
your life.
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See you guys.
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