Tag: Budget

Pay Down My Debt, Strategies to Save

Create a Budget Designed Just for Dumping Debt

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Even if you hate spreadsheets and numbers, coming up with a debt-destroying budget can be simple with a single rule: always apply excess funds to debt.

This rule can work with two of the most common debt repayment methods: the debt snowball or the debt avalanche.

The debt snowball method attacks smaller debts first, regardless of interest rate. The goal is to motivate you with small victories in order to go on and gain confidence to pay off larger debts. The debt avalanche method focuses on paying down debt with the highest interest rate until you pay off the balance with the lowest interest rate.

How Much Can I Throw Toward My Debt?

The math for your budgeting process is super-simple: Monthly income minus monthly expenses equals the amount of extra money you can apply toward your debt each month. The emphasis is on extra money because you’ll still want to pay your minimum debt obligations to avoid getting behind on your payments.

Note: If you still need help with the math because you’ve got to actually figure out how much you spend each month, you can use an app that connects with your bank to add up all your expenses. Check out services like Mint.com, YNAB, or Personal Capital to help you get quick figures around your income and spending along with categories for each.

Though the math is not too complicated, the harder part could be increasing the gap between your income and expenses to actually have a surplus in your budget.

Unless you’ve got little to no wiggle room in your budget, you don’t have to start cutting expenses quite yet. However, there are some expenses that are discretionary and should be omitted from your equation until you’ve tamed your debt load.

For now, just get a baseline of what you should have left over at the end of each month once all your bills and expenses are accounted for. If it’s $15, great. Start there. If it’s more, even better.

Once you get this number, use it to pay more on your debt than is required. So if your minimum payment is normally $50, pay $65 with your $15 surplus. It can be the smallest debt or the account with the highest interest rate. What matters now is that you do something to get into the habit of making extra payments on debt and accounting for it in your monthly budget.

How to Apply This Rule in Various Scenarios

If you budget with a goal in mind, the purpose of your money becomes clearer. Any kind of money that turns out to be extra should be applied to debt to reduce your balances. But the key is being mindful of extra money, even when it doesn’t seem to be extra.

For example, getting a raise is a reason for some people to increase their standard of living. They might move to a place with a view or buy that lavish SUV they’ve been eyeing for a while. If you’ve committed extra funds to a purpose (paying off debt), the decision is made for you far in advance of you actually getting the money.

The same goes for your income tax refund check. You might bank on this money every time income tax filing season comes around. While many people are planning spring break trips and shopping sprees with this money, you’ve got to make up your mind that this money is already earmarked for debt repayment.

Finally, there’s always that unexpected windfall: an inheritance, a settlement, or any type of money you never saw coming. This might be one of the most difficult chunks of money to part with for the sake of paying off debt. After all, you didn’t know it was coming, and maybe you didn’t have to work too hard for it.

In this case, it’s pretty tempting to want to splurge and blow it all on something you think you deserve. Things can get complicated at this point. But if you keep following “the rule,” this money is technically already allocated, and your debt repayment budget suddenly becomes easier to stick with.

Keep Widening the Gap Between Income and Expenses

This is the fun part. Why? You get to be creative and have more control over your debt repayment timeline. Want to get out of debt fast? Then you’ll have to figure out how to make your income outpace your expenses. It could mean adding a side hustle to the mix or getting more aggressive with cutting out or decreasing expenses.

Adjusting Your Tax Withholdings

If you pocket a large tax refund each year, ask yourself why. It is likely because you are paying too much in income taxes throughout the year. If that’s the case, you can change your tax withholdings through your payroll department to keep more money in your pocket throughout the year. It will mean a smaller tax refund come tax time, but you’ll have more cash on hand to put toward your debt with each paycheck.

Use this IRS withholding calculator to estimate your withholdings.

Decrease Your Income Tax Liability

There are more than a few ways to decrease your income tax liability. From IRA contributions to tax tips for entrepreneurial endeavors and other tax credits and deductions, there should be one or more things you can do to owe less on your tax bill.

Cut Expenses Where You Can

There are so many ways to save money on so many things. You can start small with things like eating out and having cable and work up to saving money on housing costs or refinancing student loans.

Then there are the diehards who go full monty and go through full-on spending freezes on things like takeout and travel. The list of cost-cutting measures can get pretty long, but you get the point: Go through your spending with a fine-tooth comb and find out where you can save and what you could cut.

Increase Your Income

Creating another stream of income sounds gimmicky, but there are ways to do it without getting caught up in scams. You can find a part-time job, provide consulting services on the side, or even start a mini-business like dog walking or car washing. It shouldn’t be anything that will cost you tons up front to start, and it shouldn’t hinder your ability to keep your full-time job.

You may find that you have to try a few things before you come up with the perfect combination of low overhead, quick to start, and profitable. That’s OK. Just keep plugging away until something clicks. It’ll be more than worth it to add that extra income to the budget for paying off more debt even faster.

Remember the Golden Rule: Excess Cash Goes to Debt

It all comes down to committing your cash to a purpose ahead of time. No matter how your financial circumstance changes, you’ll know what to do when you’ve got a surplus of money.

You’ll have to come up with a list of things you are willing to do to increase your cash reserves, but if you keep the goal in mind of continually applying extra funds toward debt, you’ll save on interest and also pay down your debt faster.

Aja McClanahan
Aja McClanahan |

Aja McClanahan is a writer at MagnifyMoney. You can email Aja here

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Featured, Strategies to Save

Why Everyone Loves the Zero-Sum Budget

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Why Everyone Loves the Zero-Sum Budget

How would you like a budget that lets you spend literally every single dollar you have? That’s exactly how the zero-based budget operates, and it’s growing increasingly popular as a tool to help people save more and spend less.

The concept of zero-based budgeting has actually been around for several decades. It was developed in the 1970s by Peter A. Pyhrr, who worked as a manager at calculator-maker Texas Instruments in Dallas, Texas. At the time, the budgeting method caught on as a popular way for businesses to budget but eventually went out of fashion.

Today, zero-based budgeting is having something of a renaissance, not as a business accounting tool but for helping people manage their personal finances.

How Zero-based Budgeting Works

The goal of zero-based budgeting is to ensure you don’t spend any money that you don’t have to spend. The method gives you an opportunity to review each dollar in your budget and assign amounts to spending categories so that you can get a picture of where all of your money goes each month.

“There should never be any money ‘left over’ because a zero-based budget includes expenses such as ‘investments’ and ‘savings’,” says Scottsdale, Ariz.-based Certified Financial Planner Alexander Koury.

The goal is simple: income – spending = 0

How to Follow a Zero-based Budget

List all of your net monthly income

To kick off your zero-based budget, figure out exactly how many after-tax dollars you have coming in every month (you could track your earnings biweekly, as well).

If you’re a salaried worker with a steady income, it’s fairly simply to predict your earnings. If you do contract work or your income is irregular, you may want to average your income for the past three months to create a starting point, then adjust it accordingly.

List all of your sources of income to get your total income for the budgeting period. That number will be your starting point.

Track your past spending

A benefit of the zero-sum budget is that it “helps create awareness of all outflows and expenses,” says San Francisco-based financial planner Catherine Hawley.

In short, you’ve got to know where your money is disappearing to every month.

When you become fully aware of where all of your money goes, you can discover where you’ll need to control your spending.

Start by listing all of your fixed expenses for each period. Those are expenses that you know you will need to make each period. For example, in a monthly budget you may have rent, utilities, and subscription services listed as your fixed expenses.

Next figure out where you spend your flexible dollars. Try an app like Mint to easily categorize your expenses. Or do it the old-fashioned way with a spreadsheet or pen and paper. Koury recommends pulling your past 12 months of expenses to locate and categorize your purchases.

Create your budget

Once you have your income and expenses calculated, it’s time to throw it all together and zero out your budget.

“Budgeting is the foundation on which financial planning is built. Without having a budget, it is difficult if not impossible to grow and create wealth,” says Koury.

Take your income for the budgeting period and subtract your fixed expenses. Hopefully, you’ll still have money to play with, because next you’ll need to decide how much you want to “spend” on savings and long-term goals like retirement.

“When you list out your expenses, put yourself at the top of the expense list. You are the most important, and you always want to pay yourself first,” says Koury.

Fixed expenses and savings (paying yourself) should always come first on your budget. If you still have money left over, don’t let it sit in your account without a purpose. With a zero-sum budget, every dollar you earn should have a job. Otherwise, it’s easy to lose track of those dollars. Go back to the beginning, when you listed out your spending categories. A trend probably emerged, showing you where you spend the most. Maybe it’s eating out with friends, or buying toys for the kids. Designate a certain amount you’re allowed to spend out of your total budget to those categories. Once you set a limit for spending there, you’re less likely to go overboard.

If you get paid bimonthly or biweekly, you may want to create two versions of a budget — one for the first half of the month and another for the second half of the month to accommodate for bills for fixed expenses due at different times in the month.

Pros and Cons of Zero-based Budgeting

Pro: You know where your money is going.

The best part about a zero-based budget is that you’ll know exactly what you are spending you hard-earned money on. At first, your spending habits may surprise you. You may be shocked that you spent more on dining out than on groceries last night, or that your shopping habit has gone a bit overboard.

“The main reason people use zero-based budgeting is to control their spending habits in the face of impulsive behavior,” says Dr. Constantine Yannelis, an assistant professor of finance at NYU Leonard N. Stern School of Business.

When every dollar you earn is assigned to a task, you are able to visualize and rationalize your budget each period. You can see how cutting back in certain spending categories will help you to reach your financial goals.

Con: A zero balance requires a lot of discipline.

If this is your first attempt at budgeting, you may want to ease into it, as it requires you to be very disciplined.

“[The budget] may become too strict, just like a diet, and if one gets off track even for a bit, they may stray from using it and they may go back to their old ways,” warns Koury.

Unfortunately, the budget that creates a place for every dollar doesn’t leave much room for error.

“The chief pitfall of zero-sum budgeting is that it can decrease flexibility, and if adhered to strictly, it can lead to artificial constraints on what individuals may purchase,” says Hawley.

Don’t be too hard on yourself. It may take a couple of budget cycles for you to get used to your new budget and to adapt it to your lifestyle.

Pro: If you stick to it, you’ll see results.

This budget is not for the commitment-phobic. The zero-balance budget is an exercise.

“It is a very results-based approach to creating great results,” says Koury. “The more disciplined you are in your approach, the more effective the results can be. If you have specific goals, then you would want to use this approach.”

Dr. Yannelis says the zero-balance method is also good for new budgeters because “it provides a commitment device for individuals with difficulty meeting their spending and savings objectives.”

Con: This may not work well for emergencies.

The zero-balanced budget is pretty strict, so “it may not work well if people have unpredictable spending needs due to health issues, children, or other life events,” says Dr. Yannelis.

To combat this, you’ll want to make sure to contribute to an emergency fund each period and to make sure you have insurance coverage for all of the important things — health care, disability, life, home, auto, etc. You can’t predict when an emergency will cost you financially, but it’s better to have cash stashed so a small emergency with the kids won’t interrupt your budgeting goals.

Pro: You can track progress toward your goals.Using this budget — especially when you use it with a budget-tracking tool— can help you see the progress you are making toward your savings and debt repayment goals. If you can stick to the contribution you make each month, you can more easily predict when you will reach your goals.

Mark that date, and stay as close to your budget as possible to reach your goal by it. If you happen not to spend all of your money in a particular category, it has to go somewhere. You can contribute the extra funds to your savings or debt payment goals to beat your target date.

Con: You may be “overdoing” your needs.

The zero-balanced method can get very detailed since you need to track the route of each and every penny.

“It can be more detail than some people need. For some it’s enough to carve out long-term savings and live off the rest,” says Hawley.

Koury says the method works better “for those that are diligent about their finances and are analytical.”

If you make more than enough money, you might not care or feel the need to make a super-detailed budget.

“Some people just like knowing they put a certain amount of money in their savings account monthly, and they spend the rest,” says Koury.

Tools to Help You Master Your Zero Balance

EveryDollar and EveryDollar Plus

EveryDollar is the budgeting app created by personal finance guru Dave Ramsey, who popularized the zero-based budget for personal use. You can use it on your desktop or smartphone.

The app automatically creates eight spending categories that cover the basics of most budgets, but you can create budget-specific custom categories, too. It also lets you set up “funds,” which are saving accounts. This lets you set aside money for an emergency fund or other savings goal. The app also sends you tons of reminders to stay on top of your goals.

In addition to the basic version of EveryDollar, there is a premium version called EveryDollar Plus that can be connected with your bank account to pull in your transactions automatically.

You Need a Budget (YNAB)

You Need a Budget — aka YNAB — is budgeting software that’s also available for desktop and mobile devices. The company’s mantra, “Give every dollar a job,” describes its zero-balance foundation.

It prompts you to assign the money you have to a budget category. When you have one month’s worth of expenses fully funded, you can start budgeting funds for future months.

YNAB will cost some money to use. The platform offers a 34-day free trial, after which you will have to pay either $5 a month or $50 a year. Students can get 12 months of YNAB budgeting for free, after which they’ll be eligible for a 10% discount for one year.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

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Banking Apps, Reviews

Mvelopes: The Digital Solution to Using the Envelope Budgeting System

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Overdraft_lg_mobile vs trad

If you’ve done any reading about setting up a budget or keeping track of your expenses, you’ve probably heard about the cash envelope system for budgeting.

Using Cash Envelopes for Budgeting

The idea behind the cash envelope system is that you keep your cash in separate labeled envelopes for different spending categories in your budget, literally.

For example, you might have an envelope of cash dedicated to grocery spending, another for non-food household expenses (paper towels, toilet paper, stamps, etc.), and you may even decide to use cash for things like entertainment or dining out.

The cash envelope system was popularized by personal finance guru Dave Ramsey, who advocates for the system as part of his budgeting strategy during his popular Financial Peace University course.

The cash envelope system can be a good way to help you control your spending if you choose to use your cash envelopes only and not carry any other forms of payment, like a debit card or credit card, in your wallet. Carrying cash only gives you a finite limit to how much you can spend. Even if you “cheat” by pulling money from other envelopes to cover overspending in one category, you will still be limited to only spending the amount of cash you are currently carrying.

That said, there are also some disadvantages to the traditional cash envelope system. For one, you will be carrying a lot of cash, which can be a safety concern. Plus, by carrying cash instead of having your money in a bank account, you will also be missing out on earning any potential interest on your money.

This is where Mvelopes comes into play.

What is Mvelopes?

mvelopesMvelopes is an app that provides a spinoff of the cash envelope budgeting system. Instead, you will set up your budget using the app and keep track of your spending using digital envelopes over paper ones. This eliminates the need to carry around paper envelopes stuffed full of cash, leaving you more vulnerable to theft or simply misplacing a few hundred dollars.

According to its website, Mvelopes helps users get out of debt faster, accumulate savings, and reach financial goals.

Some of the features that help users accomplish these goals include:

  • Compatibility with Windows and Mac
  • iPhone and Android App
  • The ability to connect with your bank and credit card accounts
  • 25 spending envelopes
  • Auto transaction gathering
  • Auto envelope spending plan view

How Does It Work?

Mvelopes claims that creating an online budget and tracking your spending is quick and easy with its online software, but from my experience, it can be time-consuming to get started from scratch with the system.

Once you create an account with Mvelopes, you have to let the software know what your financial goals are by choosing from a list that includes things like getting out of debt, saving more money, donating to charity, sticking to a budget, and more.

Once you’ve completed this step, you will go through a 4-step process to add your bank and credit card accounts, define your income, create a budget, and set up and add money to your spending envelopes.

After your envelopes are set up and funded, the program will track your expenses by category so you can see how much money you’ve spent in each area and how much you still have remaining.

What Does It Cost?

The basic version of Mvelopes is free, but it does have more limited features than the premium versions. For example, you can only connect your free account to 4 online bank accounts or credit cards. You also don’t have access to all the support features or 1-on-1 financial coaching with the free version of Mvelopes.

The next step up is Mvelopes Premier. When you upgrade to this version for $95 a year, you do have the ability to connect to an unlimited amount of bank accounts and credit cards. You can also set up an unlimited number of spending envelopes, although the 25 that come with the free version are usually more than adequate for most people’s budgets.

With Mvelopes Premier, you’ll also be able to access their “Integrated Debt Roll-Down” feature, which can be helpful if you paying off debt is your main goal. This feature allows you to put in your debt totals and view several different scenarios and pay off options which can then be added to your envelope budget.

The top tier is Money4Life Coaching. There was no price specified on the website, but it did say that “packages are customized for individual needs”. With this package you get all the features of Mvelopes Premier, plus additional support and 1-on-1 coaching for your financial needs.

How Does Mvelopes Stack Up?

Mvelopes is far from the only budgeting app out there that claims to help you with your budget and financial goals.

EveryDollarEveryDollar is another budgeting app that was created by Dave Ramsey. It also uses a similar system to cash envelopes. In addition, users can follow along with Ramsey’s “Baby Steps” plan and track their progress using his system. EveryDollar is one of the fastest ways to set up a budget according to users, but you can’t sync any of your financial accounts unless you upgrade to the paid version called EveryDollar Plus.

MintMint is one of the most popular budgeting apps. It’s 100% free to users and allows synchronization to bank accounts and credit cards with no charge. However, users have been experiencing some problems with Mint’s account syncing feature over the past year or so. And some of the “helpful hints” on Mint are actually ads that may trick users into clicking on them and getting “talked into” financial accounts and products they don’t really need.

Who Will Benefit Most from Mvelopes?

If you are currently using a cash envelope system, then you could benefit from switching to digital envelopes with the Mvelope app. It will allow you additional security by not having to carry around large amounts of cash in your wallet, while still being able to enjoy the categorization provided by using the envelope system in your budget.

Mvelope can be used on your computer, tablet, or smartphone, giving you the ability to view your budget at any time, which is helpful for those who are constantly on-the-go. The only other drawback is that if you still opt to use cash for some purchases, those expenses will have to be added manually to your budget in order to stay on-track with spending.

Kayla Sloan
Kayla Sloan |

Kayla Sloan is a writer at MagnifyMoney. You can email Kayla at Kayla@magnifymoney.com

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Banking Apps, Reviews, Strategies to Save

EveryDollar and EveryDollar Plus: a Budgeting App to Keep You On Track

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Overdraft_lg_mobile vs trad

With so many budgeting apps and options available on the market, it can be hard to decide which tool will work the best for your personal financial situation. One of the newest options that just came out last spring is EveryDollar.

EveryDollar is the budgeting app created by personal finance guru Dave Ramsey. No matter if you agree with all of Mr. Ramsey’s financial advice or not, his “Total Money Makeover” program has helped scores of families get out of debt and gain control of their money.

“I’ve been using the EveryDollar budgeting app for about 6 months now and I initially found out about it by listening to Dave Ramsey’s podcast,” said Allison Haffner, a money conscious millennial from Colby, Kansas. “If I hadn’t heard about it on his show, I probably wouldn’t have started using it.”

EveryDollar is a budgeting app that can be used on your computer or your smartphone. There are two versions of the program – one is free and the other is a paid option that offers more features for it’s users.

How it Works

EveryDollarThe first step to using EveryDollar is going to the EveryDollar website to create an account and set up your zero-based budget. This process should be quick and easy. The website claims that you can create a budget in ten minutes or less, and it’s probably true if you don’t have a complicated budget.

The EveryDollar website creates eight different spending categories that cover the basics of most peoples’ budgets, but you also have the option to create custom categories for your budget if needed.

In addition to creating spending categories, you can also create and set up “funds” which is their term for different savings accounts, like an emergency fund, a vehicle maintenance fund, and more.

After you’ve finished the initial set-up of your budget and financial goals on the website, you can easily maintain your budget by updating it with your day-to-day expenses and purchases with the app.

As you add your expenses to your budget in EveryDollar, it will help you ensure whether or not your spending is in line with your planned budget by showing you graphs of your spending. This is a good reminder for you to make adjustments to your spending as needed throughout the month.

Pros of EveryDollar

Track in real time: Because EveryDollar is a budgeting app that’s available on your iPhone, it’s easy to put in your spending in real time throughout the day. This gives you plenty of reminders to make sure you are staying on track with your goals.

Split transactions: Another feature that’s great is the ability to “split” transactions when you put them in with your iPhone. For instance, your next trip to the grocery store might include more than just food for your family. If this is the case, you can easily split up the transaction to reflect the money you spent on pet food or other items besides just groceries.

Utilize Dave Ramsey’s Method for current followers: EveryDollar also helps you set financial goals and follow Dave Ramsey’s famous “Baby Steps” with a special tool just for those seven steps of your financial journey.

Sync with your bank accounts: In addition to the basic version of EveryDollar, there is a premium version called EveryDollar Plus that can be connected with your bank account to pull in your transactions automatically. This process occurs overnight and then you’ll have to categorize your expenses with a drag and drop system. You can connect multiple bank accounts and major credit cards to your EveryDollar Plus account, which makes it easy to track all of your spending.

EveryDollar makes it easy to keep track of your budget and have confidence that the information is correct because it does sync across multiple devices. This is a great feature for married couples that will both be accessing their budget on different iPhones or computers.

Cons of EveryDollar

Only iOS enabled: Unfortunately, the EveryDollar budgeting app is only available for iPhone users in the AppStore. Although it is not available for Android users at this time, you can still use the program on your computer. But this option may require you to keep better track of your spending as you are out and about so you can input it into your budget later when you get home and have access to your computer.

Can only sync to bank accounts if you pay: another downside of EveryDollar’s free version is that it can’t be connected to your bank account to automatically pull in your transactions every night as they hit your account. If you don’t want to pay for EveryDollar Plus, you will have to input all of your expenses manually. Although if you’ve been using a handwritten budget or even a spreadsheet of your own making, you’ve likely been doing this anyway.

Takes awhile to adapt: Haffner said the biggest downside she experienced with the EveryDollar app was that it took a little getting used to before she could easily use it for all of her budgeting needs.

“It did take me a little while to learn how to use the app to track my spending. I kept using my old spreadsheet alongside the app for a while until I got the hang of it,” she said.

Misnamed transactions: Another thing to watch out for if you decide to try EveryDollar Plus is the translation of merchant names on your transactions. When the app pulls in the transactions from your bank account or credit card, it converts the merchant names from an abbreviated version to the longer version to make it easier for you to drag and drop your expenses into categories. However, the translations are sometimes incorrect.

EveryDollar Plus Costs

EveryDollar Plus is offered for free for 15 days so you can try it out and see if it will work for your financial needs. During this trial period you will have access to all of the premium features, the most popular of which seems to be the automation between the app and your bank account. After the trial period, the cost for the premium version of the app is $99 per year. However, even if you decide to stick with the free version, the EveryDollar budgeting app offers a lot of features and benefits.

How Does EveryDollar Stack Up?

As mentioned, there are lots of options for budgeting apps. In fact, we even put together a list of the 10 best budgeting apps available.

MintMint is one the most popular budgeting apps because it’s 100% free for users. It also offers free transaction syncing between your bank account the app to help you keep track of your expenses. This is a feature you’d have to pay for with EveryDollar Plus. But budgeting with EveryDollar is actually faster and more user-friendly than Mint. Some of the “helpful hints” on Mint are actually ads, and users have been reporting more problems with Mint’s account syncing feature over the past year.

Screen Shot 2016-03-02 at 11.44.03 AMAnother popular budgeting app is You Need a Budget, or YNAB. This app is actually quite different from Mint and EveryDollar because it focuses more on budgeting into the future instead of analyzing the past and present. The YNAB program is based on living off last month’s income, encouraging you not to spend the income you’ve earned until 30 days later once you’ve built up a savings buffer. YNAB is $50 per year and if you are a data lover, this may not be the best option for you, as it doesn’t provide much in the way of analysis and trend data for your spending.

Who Will Benefit Most

Overall, EveryDollar has a very user-friendly interface that should make it easy for budgeting beginners to get the hang of creating and sticking to their first zero based budget. It’s also a good option to consider if you are on-the-go and want to refer back to your budget before making a purchase that could make or break your category for the month.

EveryDollar is a budgeting app that will likely be very popular due to it’s association with popular personal finance guru, Dave Ramsey.

That said, it might be hard to convince people to switch to EveryDollar since there are other budgeting apps, like Mint, that allow users to connect their bank accounts and sync transactions for free.

Kayla Sloan
Kayla Sloan |

Kayla Sloan is a writer at MagnifyMoney. You can email Kayla at Kayla@magnifymoney.com

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Reviews

The Ins and Outs of the Wally App for Daily Expense Tracking

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App for Daily Expense Tracking

Since most of our transactions happen electronically with a credit card swipe or click of the mouse, it’s easy to lose sight of where your money is actually going each month.

Budgeting apps, like Wally, are a convenient way to keep track of expenses so you can meet savings targets and other financial goals.

How to Use Wally

Wally is available for iPhone and Android. After you download and subscribe for Wally on your device, you will see three main tabs on the left side of the screen: home, income and review.

The home tab is the opening screen and it’s where you enter expenses. You can choose from expense categories including transportation, clothes, entertainment and more. There are also subcategories within each major category where you can get really specific.

For example, under the home category there are additional line items including mortgage, rent, furniture and more. If a subcategory isn’t on the list, you can create your own.

Every time you go to enter an expense Wally will try to guess where you are on a map and connect your expense to that location. You can also scan receipts.

In the income tab, you add up each of your income sources for the month and set your savings goal. At first glance, I could not figure out how to set a goal for this review.

Tinkering around I found out you have to hold down and drag the orange scroll bar in the income section for savings target to pop up.

Here’s what the income section looks like before and after holding down the orange circle:

This is just one example of how the Wally interface is not so straightforward.

The third and final tab on the app is for budget review. This area shows a very basic analysis of your spending by category each week, month and year.

Wally 1

Wally 2

 

 

Who is Wally best for?

Wally is for someone looking to just track money coming in and going out to cut down on excess spending. The budget history section of Wally is a breakdown of your spending with minimal detail. It’s just a pie chart with color-coded expense categories. If you’re looking for an app that has more to offer in the analytics section, this isn’t the one for you.

What does Wally cost?

The best thing about Wally is it’s free. In the future, the creators of Wally may add premium plans with extra features like currency conversion and money management for families. But, there will always be the basic free version of the app that includes the expense tracking tools.

What are the pros and cons of using Wally?

If you’re on the hunt for a budget app, here are a few pros and cons of choosing Wally:

Pros

  • It’s free.
  • It’s available on iPhone and Android.
  • It saves the locations where you shop often so you can enter them quickly in the future.
  • You can assign recurring income and expenses.
  • You can take photos of receipts to store them.
  • There’s a review section where you get a very basic overview of your spending habits.
  • You can export data via CSV and store your data on iCloud.

Cons

  • Wally isn’t as user-friendly as it could be. It took some digging through the user tips manual to figure out the app.
  • The review section for expense analysis is limited.
  • Wally doesn’t link to your actual financial accounts. What your app says and the money you physically have in the bank may not match up if you forget to put an expense in.

How does Wally Stack Up Against the Competition?

SpendBook has a leg up on Wally when it comes to analytics and how user-friendly it is. The basics of the app are relatively similar though. You manually enter your income and expenses.

But, in addition to that, SpendBook has a calendar where you can review budget history down to each day. There’s also a section to manually enter balances from your financial accounts to see how income and expenses impact your bottom line. SpendBook costs $1.99 for iPhone.

LevelMoney is another similar system to track spending except you have the option to connect your financial accounts to the dashboard. Level Money uses your income, expenses, and savings goal to calculate your “spendable” amount, which is like an allowance.

This app is free and available for iPhone and Android. It uses 128-Bit SSL and AES encryption to keep your data safe. It’s also security verified by Intuit and McAfee.

Toshl Finance is a budget system with more options. You can manually enter data. Or you can connect up to two financial accounts for free. Toshl Finance uses your spending habits from the past to create a spending plan for the future.

You can export data to PDF, Google Docs, Evernote, Excel and CSV. You can also sync your Toshl Finance account with other devices. The service has bill reminders and spending analytics. It’s available for iPhone, Android and Windows Phone. The basic service is free, but the advanced version where you can set-up unlimited financial accounts and budgets costs $1.99 per month.

Should You Use Wally?

The biggest negative of Wally is it’s not particularly easy to navigate at first. Still, it’s free. So, if you’re looking for a way to take control of your everyday spending, this app is worth a try.

 

 

 

Taylor Gordon
Taylor Gordon |

Taylor Gordon is a writer at MagnifyMoney. You can email Taylor at taylor@magnifymoney.com

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News

7 Cheap Ways to Go Green

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Finances

If going green has always been on your to-do list but you’ve held back because of the hefty price tag, now’s the time to reconsider your lofty goal. While it’s true that you could easily spend a pretty penny trying to make your routine environmentally friendly, that doesn’t always have to be the case.

Here are some easy ways to feel good about your conscientious choices without regretting them every time you take a look at your (rapidly dwindling) bank account.

1. Rethink your heating and cooling needs

You might be surprised how the smallest of steps can help reduce your carbon footprint, and in some cases, even help grow your bottom line. Take, for instance, your heating and cooling. By reducing your heat by a couple degrees in the winter (especially when you’re sleeping or out of the house) and turning down the air conditioning, you’ll be saving precious energy as well as cutting back on electricity costs. While we’re at it, keep your air conditioning filters clean, too, since old ones require more energy from your machine to keep them working optimally.

2. Stop using disposable products

Ditching your disposable products is another method that’s two-fold, although it may appear more expensive up front. Items like plastic and paper bags and aluminum foil might seem cheaper up front to purchase than Tupperware, actual lunch bags and reusable water bottles, but these items only end up in the trash when you’re done with them, which wastes your money and is bad for the environment. Take a little time to go through your kitchen and bathroom (areas that are particularly big offenders for these types of products) and see what you can replace with reusable goods instead.

3. Fix your leaky faucet

Leaky faucets run up your water bill and waste tons of water, so it’s worth dishing out to get those faucets fixed as soon as you notice the problem. When it comes to water, you can also install low-flow showerheads, take shorter showers and get to know your washing machine settings to conserve, as well.

4. Switch out old light bulbs for CFLs

Yes, forking over cash for energy efficient light bulbs will cost you a pretty penny up front (about five times the cost of incandescent bulbs, to be exact), but again, this is one of those changes that will save you cash in the long run (energy efficient bulbs save on energy costs and last longer than regular bulbs) and are much better for the environment.

5. Unplug at night

Did you know that even when you’re not using your appliances, they’re still using energy? This simple trick will cost you nothing (and it’ll actually save you in energy bills), and is great for the environment. For any products where it makes sense (not the refrigerator, for example!), take some time at night to go around your house and unplug what you won’t be using, like lamps, the toaster, your computer, etc.

6. Go paperless

To the extent that it’s possible, consider eliminating as many paper products as possible from your life. Switch to paperless billing, borrow magazines and books from the library, and use cloth napkins instead of paper ones.

7. Get your car fixed regularly

Car tune-ups are for more than just your safety (although that’s obviously an important aspect of them). Excess wear and tear and leaky engines all waste energy and, overall, it’ll be cheaper to pay for regular car tune-ups than it will be to have to buy a brand new car (or expensive car parts) when yours breaks down.

Cheryl Lock
Cheryl Lock |

Cheryl Lock is a writer at MagnifyMoney. You can email Cheryl at cheryl@magnifymoney.com

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5 Ways to Save on the Cost of Eating Healthy

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Save on groceries

When it comes to calculating the cost of being healthy, there are a lot of different factors to consider. Of course the overall amount of money you’ll spend on things to keep you healthy is the most obvious one like gym memberships and organic foods, but just focusing on this cost doesn’t factor in the money savers on lower healthcare bills and fewer medicines.

To simplify things, let’s consider the cost of eating healthy, specifically, and how much it might cost you to consume a healthy diet as opposed to one full of added sugars, fats and salt.

Would it surprise you if we said that eating a healthy diet only costs about $1.50 more per day than eating an unhealthy one?

At least that’s the difference according to research from the Harvard School of Public Health, which was based on a comprehensive examination comparing prices of healthy foods and diet patterns to less healthy ones.

If you’ve heard people complain in the past about how much more expensive it is to purchase healthy foods compared to the unhealthy versions, you’re not alone — it just turns out the actual price differences hadn’t really been calculated before. Of course saying healthy foods cost an extra $1.50 per day is a simplistic way to look at things, since over the course of a year that adds up to approximately $550 more per year for one person — not something to sneeze at for someone on a budget.

So how can you eat healthy and still maintain a semblance of your budget? Here are some suggestions.

1.Never shop without a list

Shopping while you’re hungry or without a specific list of items you actually need or are interested in getting is a surefire way to spend more than you want. Take a little time at home before heading out to go through what you already have and to create a list of meals for the week ahead so you aren’t throwing things willy nilly into your cart as you shop. Scour the web for tasty and low-cost recipes to try out (ChooseMyPlate.gov has some good options here), and remember that a healthy, tasty meal doesn’t have to include multiple exotic ingredients. Stick with the basics and you’ll save cash and eat right.

2. Buy in season

Stocking up on fruits and veggies is a great way to stay healthy, but it can be expensive to load up on these items, especially when they’re out of season. Stick to local fruits and vegetables that are readily available during the time of year when you’re shopping (no shipping into the stores necessary!), and search around for coupons to help you save even more. Remember, you can freeze most produce, too, so if you’re about to change seasons and you can’t imagine going without your favorite fruit or veggie, stock up while the price is right and save it in your freezer until you’re ready to use it.

3. Buy foods in their whole form

The simple act of buying foods in their whole form rather than prepared can actually save you a bundle. For example, shredded cheese is more expensive than buying the block and shredding it yourself.

4. Learn to like cheaper cuts of protein

Fish and meats can be expensive, but not all cuts of meat or all types of fish are equally expensive. Chicken thighs instead of chicken breasts, for example, will save you some money, and bone-in, skin-on cuts are more likely to be cheaper, too. Of course another way to go is to skip the traditional meat and fish route for your protein altogether and go with other sources, like egg, tofu and bean-based meals.

5. Visit your local farmers market at the end of the day

If you’ve found that shopping at a farmers market hasn’t saved you in the past, try going again, but this time near the end of the day when it’s about to close. Vendors are more likely to cut you deals on goods they don’t want to pack up and bring back with them, so there’s a good chance you’ll find what you need for a cheaper price closer to closing time.

Cheryl Lock
Cheryl Lock |

Cheryl Lock is a writer at MagnifyMoney. You can email Cheryl at cheryl@magnifymoney.com

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BUDGT: is the Expense Tracking App Your Answer to Overspending?

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Expense Tracking

Making spur of the moment spending decisions without consulting your budget is the easiest way to get off track financially. Luckily, you can have a spending plan at your fingertips with a financial app like BUDGT.

The Inside Scoop on BUDGT

BUDGTBUDGT is made up of three main features, a monthly budget, your daily expense tracking and a progress report.

Unlike other budget systems where you enter financial account information and have exact facts and figures in the dashboard, BUDGT is very basic.

You create a budget with your income, expenses and savings goals. The budget can be exported as a .csv to use in Excel if necessary.

Then BUDGT gives you a daily allowance. You enter purchases and they’re put into categories. If you’re forgetful, BUDGT has a timer you can set to remind you to put in expenses for each day.

Besides the micro day-to-day tracking feature, you can look at your monthly budget at a macro level. The progress report shows your spending for the entire month.

How does BUDGT work?

Currently, BUDGT is a standalone iOS app that can’t be synced with any other device. However, there is an Apple Watch extension you can use to update your spending without pulling out your phone.

To create a budget, you hit a big plus sign to add income and then a big subtract sign to put in an expense. According to BUDGT, there are two ways to make this app work for you.

If you earn just enough income to cover your bills each month, BUDGT recommends putting in both your income and expenses to very closely monitor cash flow.

If you have more leeway, BUDGT says another option is to enter the max amount you want to spend per month on something in the income field instead. This is useful if you want to give yourself an allowance in a specific area. For example, use this method to set an amount you want to spend on lunch or coffee during the week and then hold yourself accountable.

One thing you don’t have to worry about with the BUDGT app is data security. Connecting your financial accounts isn’t required or even an option.

Who is BUDGT best for?

This app is for you if you tend to overspend on little things here and there throughout the day. Small purchases add up and may cause your money to vanish each month. Use BUDGT to curtail your miscellaneous spending.

On the other hand, BUDGT won’t give you a full picture of your financial standing. If you’re looking for an app with analytics that include your net worth, this isn’t the one for you.

What does BUDGT cost?

BUDGT costs $1.99. Whether or not it’s worth the cost is debatable. BUDGT is no doubt useful, but there are similar apps that don’t cost anything. We’ll go into more detail later in this post.

What are the pros and cons of using BUDGT?

If you’re deciding whether to purchase the BUDGT app, here are some of its pros and cons:

Pros

  • Easy to use.
  • Even easier to use for Apple Watch owners.
  • Helps you make quick spending decisions to stay within budget.
  • Data security. The best way to protect your information is keeping it to yourself. If you’re fearful of your information getting into the wrong hands, you’ll dig this app.
  • Your expenses are organized into categories.
  • You can review your spending habits for the current and past months in pie charts.

Cons

  • The app costs $1.99 for a pretty basic service.
  • It does require manual data entry of your expenses. Miss some expenses and you’ll be working with an incorrect budget.
  • BUDGT doesn’t give you a full picture of your wealth including account balances, investments, etc.
  • Only available on iOS.

How does BUDGT Stack up Against the Competition?

LevelMoneyLevel Money is a system similar to BUDGT except it’s free and you can connect your savings, checking and credit card accounts to the dashboard for more accurate reporting. Level Money shows you how much you can spend daily and weekly to stick to your budget.

There’s also an insights section to review past spending. The purpose of Level Money isn’t to be a full-service wealth management app, it’s to keep you on track from day-to-day. Level Money is available for iPhone and Android.

mvelopesMvelopes is a spinoff of the envelope budgeting system. The envelope system is where you put cash into envelopes for each of your expenses, so every one of your dollars is given a purpose.

Mvelopes helps you actively monitor your spending the same way as the envelope method except on your device. The free version of the app allows you to create up to 25 spending envelopes. Mvelopes is available on iPhone and Android.

MintMint.com takes spend tracking and budgeting a step further than any of the other apps we’ve discussed so far. You can connect all financial accounts to Mint.com including loans and investments to get an overall view of your finances.

With Mint.com you can also set savings goals and track spending through your transactions. In addition, you can get detailed reports with graphs to easily view where you stand. Mint.com includes credit monitoring as well. This app is free and available on iPhone and Android.

Should You Use BUDGT?

 

BUDGT’s mission is great, however, Mvelopes and Level Money are free and serve the same purpose.

Understanding your daily spending is important, but so is understanding how this spending impacts your overall wealth. Ideally, you would couple BUDGT with another system like Mint.com or even a simple Excel spreadsheet that has all of your accounts in one place.

Taylor Gordon
Taylor Gordon |

Taylor Gordon is a writer at MagnifyMoney. You can email Taylor at taylor@magnifymoney.com

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News

Fun Ways to Do Prom on the Cheap

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storecard - lg

Ah, prom time. The dates. The friends. The memories.

The cash spent.

From dresses (or suits!), hair and makeup to limos, nails and fancy dinners out, the prom is certainly something to look forward to, but if you’re not careful, it can really set you back a pretty penny. Consider some of these suggestions for ways to save some cash on your prom so you aren’t completely broke the very next day.

For Your Clothes and Shoes

While it might be tempting to dish out tons of cash on the perfect prom dress, shopping at department or designer apparel stores for your outfit could set you back hundreds, if you’re not careful. For something with more character, check out consignment and vintage shops or wedding stores like David’s Bridal that often offer sales on dresses that are just as stunning. If you go for a classic yet elegant look, you might even be able to reuse your prom dress and shoes again for future events, saving you even more money down the road. When all else fails, consider swapping dresses with friends at different schools, too.

For Your Hair, Makeup and Nails

Why drop hundreds at a salon for a cookie cutter look when you can gather a group of your best friends and start the celebration early by doing each other’s hair, makeup and nails? Usually this part of the night isn’t something that’s all too memorable anyway, so why not change that and save some money in the process? Don’t have a friend who’s good at hair and/or makeup? Shop around for local cosmetology schools that might be willing to use you as a live test for students at a fraction of the cost. (Consider doing a trial run if you’re going this route, to make sure you like the overall look.)

For the After Party

Let’s be honest — most high schoolers aren’t interested in fancy dinners out anyway, right? If that’s the case with your gang, consider finding out if your parents (or a friend’s parents) would be willing to host an after-prom party bash at the house. It’ll be more relaxed and laid back, no one has to worry about dishing out tons of extra cash on fancy food, and you can throw some pillows and blankets on the floor and crash whenever everyone is ready, no further transportation required.

In general, it is possible to do prom on the cheap, but keep something else in mind — if you’re really looking forward to one particular aspect of the night (your dress, say, or riding in a limo for the first time ever), then consider at least just picking one area to splurge on, and try saving on the rest.

Cheryl Lock
Cheryl Lock |

Cheryl Lock is a writer at MagnifyMoney. You can email Cheryl at cheryl@magnifymoney.com

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4 Ways to Cut Monthly Subscriptions Without Feeling the Burn

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piggybank

If you struggle each month to stay on track of your budget, you might be looking for some ways to cut back. Probably the best place to start with a budget breakdown is to consider any monthly subscription services that you’re paying that you might not be getting the full use out of. If it’s possible to cut some of those out of your life, you could potentially save hundreds of bucks.

But it might leave you a little down in the dumps to go cold turkey from your monthly pick-me-ups. Here are some tips on how to cut back on monthly subscription services without feeling like you’re actually giving too much up.

1. Take a month to assess


If you’ve decided to trim your budget by cutting out some monthly subscription services, there’s no need to cut everything all at once — and you probably shouldn’t. Cutting out all the fun things you look forward to each month may leave you more vulnerable for spending in other areas to compensate. Instead, take a month to really assess how and when you use each subscription. Are you using Netflix two hours every day, but you’re rarely on Spotify because you use the radio or Pandora at work? How often do you really making it to the gym each month, and is there any way you could forgo the fancy (expensive) gym membership for free weights at home and a run in the park? Keep track of your subscription use in an Excel spreadsheet so you can look back at it at the end of the month and determine what you can really afford to give up — both monetarily and emotionally — and what you would miss too much.

2. Consider a streamlined subscription instead

If you really can’t imagine giving up your subscription services — any of them — then at least consider cutting back where you can. If you pay full price for each one of your subscriptions but only use a few of them infrequently, is there a way that you could switch to a lesser plan for a month or two to see how that works? Even trimming the cost on subscription services will help your bottom line, if you can’t outright cut them out.

3. Share and share alike

If you have friends with similar interests, perhaps there are some subscription services you can share with them to cut down costs.

4. Is there something cheaper that will work the same as your subscription?

These days there are so many different options for subscription services that if you haven’t done any research in a while on the latest options, you could be spending more than necessary on subscription services when something similar — and just as awesome — is available. Cable alternatives are an easy one since there are so many (Netflix, Hulu, streaming antennas, Prime Instant, PlayState Vue, etc.), so take some time to research what each offers, what their prices are, and which one is really best for you.

Cheryl Lock
Cheryl Lock |

Cheryl Lock is a writer at MagnifyMoney. You can email Cheryl at cheryl@magnifymoney.com

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