Review of the EveryDollar Tool by Dave Ramsey
EveryDollar is a simple budgeting tool by Dave Ramsey, the financial guru and author of books like “Financial Peace University”. It was created to help those trying to create a zero based budget that assigns every dollar a name without relying on spreadsheets or worksheets, and especially let them track expenses as they spend money to minimize the risk of over-spending. What are the pros and cons of the EveryDollar financial tracking tool?
Points in Favor of EveryDollar
EveryDollar provides a straightforward ring chart to show you how much each category takes up, as well as a combined chart combining all spending into the following categories: giving, savings, housing, transportation, food, lifestyle, insurance and tax and debt payments. This allows you to see a higher level presentation of where money goes, instead of piecing together categories to see where the money is going.
In addition to the color coded categories, it gives the total amount budgeted for each category and percentage of the budget devoted to each. In this format, you can see whether your food category is more or less than the 10% recommended by the FDA regardless of your income level or whether all categories of savings hit the 15% combined Dave Ramsey recommends.
It is easy to fill in each category in the budget and add more categories not in the default budget like HSA contributions, child support or dental insurance.
EveryDollar contains sinking fund categories by default like car replacement.
The online FAQ is decent for everything from setting up your accounts to connection issues with banks.
You can use the EveryDollar app and website together to track spending as you spend money, both cash and debit transactions, as a digital equivalent of a spending envelope without having to withdraw and then carry around the cash.
EveryDollar looks like the budget sheets in the Dave Ramsey books, so it is an easy transfer from paper to tool. And the tool automatically adds up the money in each category so that you don’t have to see how much you have left to budget to have a zero based budget.
As you work on a budget category, the section representing that category is lit up on the circle chart so you can see how it grows relative to the other expense categories.
EveryDollar lets you budget the minimum payments against your smallest debts and monthly contribution to your current debt snowball category, as well as track how much is left on that debt to be paid off.
Points Against EveryDollar
You have to pay to connect to your bank, even with the free tool. This typically isn’t required when you use financial software like Quicken.
While you can track how much you contribute to various savings accounts and sinking funds, it does not let you track the status of the investments like your 401K or IRA.
As of this writing, if you want to use the EveryDollar app, it is only available on the Apple App Store. It isn’t available on Android. However, that doesn’t preclude you from opening the EveryDollar website on a smart phone and try to track spending that way.
Observations About the Every Dollar Application
If you are working off of an irregular income budget, the EveryDollar tool lets you rank budget categories by priority within each budget category so you know where to stop when you run out of money for the month. However, you can’t put food at the top of the list, followed by the house payment/rent, utilities and essentials.
This budgeting tool works best when you pay bills on a monthly basis or set aside a set amount each month for annual bills like home owners insurance.
The basic version of the app costs around a hundred dollars a year. Those who pay for the Plus level get account balance monitoring and phone support.
The online tool has links on the left side to the Dave Ramsey baby steps and recommended advisers for every category.
The EveryDollar budgeting tool is a suitable substitute for those who aren’t tracking their spending against their budget any other way. If you have the ability to install the app and willingness to pay for the full version and connectivity to your bank, EveryDollar is better for tracking day to day spending against your personal limits than financial applications like Quicken. If you already track spending in a notepad or spreadsheet and don’t want to pay for the full tool with links to your bank account, EveryDollar is redundant.