The Every Dollar Budget Method

When it comes to monthly expenses it never hurts to create a budget.

Having a budget allows you to understand how much money you have coming in, how much money you have going out, and how much you have left over!

But where to start?

Well, I like to use the Every Dollar Budget Method.

The Every Dollar Budget Method is a budgeting process in where you assign every dollar you receive to specific purpose. You start with your pay check then proceed to divide the money down into categories until you hit zero, prioritizing the most important.

Who this is good for:

  • Good for people who want to be strategic with their budgeting
  • Good for people who want to know exactly where their money is going

Who it is not good for:

  • Bad for those who don’t like the details
  • Bad for those who have a hard time sticking to a plan


  • You never over spend as you cap yourself on each item
  • You know the ins and outs of your money
  • Set up once and use the same base line every month


  • No wiggle room
  • Lots of details
  • Takes time

How to start?

I like to start by setting up my categories into the “Holy Trinity”: NEEDS, WANTS, & SAVINGS!

Within these categories, I like to add sub categories to help fully understand my budget.

For the Needs, I include housing, utilities, loans, insurance, groceries, and other monthly bills.

For the Wants, I include eating out costs, shopping, non-essential bills (things I could cancel at anytime), and similar.

For the Savings, I include savings account, emergency fund, and vacation/large purchase funds. (If you have a 401k, IRA, etc. that is not already taken out of your paycheck – this is the best spot for these items).

With my categories set up, I then proceed to divide my cash into the different categories until I hit zero. I focus on the Needs category first as this is the most important. Then I split up the remaining amount into the other two categories.

Now, depending on what I am planning for the future (i.e. saving for a car, vacation, home improvements, increasing savings amount, etc.) I then decide which category (Wants or Savings) I will plan to focus on for the month.

What I mean by that is that if I am planning to put more into my savings, I prioritize an amount I’d like to put into my savings first, then whatever is left over I allow myself to use for my wants.

If I am not planning on saving cash or feel like I need a moth of freedom, I then prioritize the Wants category and move whatever is left over into my savings.

I have found this way of budgeting has really helped me to set clear goals and boundaries on my spending habits. I allow myself to splurge some months, while other months I focus on building my savings.

*Now let me clarify, I absolutely always pay my bills and credit cards no matter what!

Paying your monthly bills and paying the minimum amount on your credit card is extremely important! So I always make sure that if I spend more on my credit card or have a bill pop up that needs paying, they receive my full attention and get paid!

If this sounds like a process you would like to try or are interested in, I created a quick and easy spreadsheet you can use for your own budget! You can find it here!

If this sounds like too much work and too much detail try some of these other methods below:

  • The 50/30/20 Method: This method divides a percentage of your paycheck into three groups. 50% for Needs, 30% Wants, and 20% Savings.
  • Save First Method: This is a simple method in where you take a certain amount or percentage of your take home pay and put it directly into your savings. The rest of the money is then used for whatever you see fit.
  • Half Month Payment: This method (used for those who get paid every two weeks) is where you take half the total amount of your bills out of your first paycheck and set aside. Then take the other half out of your second paycheck, which can then be used to pay your bills without the worry if you will have enough money as you already saved half the total from your first paycheck. The rest of the money is up for grabs!

If a spreadsheet scares you or the other methods seem like a lot of work, there are plenty of apps available to download that help to not only create a budget but work to track your expenses as well! Here are a few good ones I found:

As always I hope this helps.

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