Our Version Of The Dave Ramsey Zero-Based Budget

We started Financial Peace University by Dave Ramsey a few months ago and it has opened our eyes to putting value to every single dollar. During one of the lessons we were taught to think about every dollar that comes into your bank account. What would happen if you gave each and every dollar a purpose? Would you spend less on specific categories? Focus more on where each dollar was being spent? Start to impulse buy less and go without more? We have done all of the above and it is an awesome feeling.


For most of our newlywed life we haven’t had much of a budget. We contribute to our savings when there is extra money, have a 401k through work, and pay our rent and bills on time. But where does everything else go? We decided to take a month to figure out exactly what each penny was going towards and we realized a few things. We had a “life of luxury” that consisted of constantly eating out, buying silly things because Amazon made it seemed like we needed it and spent far too much money on cable.

We took this synopsis and the lesson from the FPU and figured out a budget. I love numbers (easy numbers- I am not a mathematician in anyway), figuring out problems and still finding a way to travel as much as we can. We are a little more future focused than we were this time last year and we have big goals that we want to achieve, we learned now is the time to start taking leaps towards this.

Dave Ramsey teaches about the envelope system and how it benefits you to actually feel yourself spending money rather than virtually giving your money to someone else. We aren’t really interested in this because our Southwest credit card is a money saver for us (read about how Dave flies for free every time we travel in this post– last year we didn’t pay for over 25 flights!) and we didn’t want to start having to budget more for travel. I have created a somewhat confusing method of a virtual envelope system with still using our Southwest, Target and Amazon card to save money and so far so good.

Here is our method to the madness.

Step 1- Create multiple accounts. This is where Dave thought I was losing my mind. I created several savings and checking accounts within our bank to double as virtual “envelopes”. I would be happy to go further into detail about what accounts we have and how we use them- let me know if this would be helpful and I will write a post!

Step 2- Every Dollar. I created a corresponding category for each account we have and use this to document how much money we have or have spent. We both use this app/website to track every penny we spend and assign it to it’s specific category. One way I use this a little backwards is for our savings accounts. When I transfer money into a specific savings account I add it as a transaction and the “remaining” is how much I still “owe” to that account for a specific month. Again, if you would like me to go into detail, let me know!

Step 3- Spreadsheets. Since I enjoy this process I take care of transferring money and paying off bills so once a week I go into Every Dollar and copy over each transaction, along with which category it was. I mark each transaction as reimbursed or not reimbursed to keep track of what I have paid off.

Step 4- Pay Off Cards. We get paid on the 1st and 15th so on those dates I total up the amount on our credit cards for each category and pay that portion off with money from the specific account. Always making sure our new balance is zero.

This method, though confusing at first, has really helped us keep track of our money and grow our savings accounts. I am really excited to be working harder to benefit our future while still making sure we enjoy the life we have right now.

Do you have a budget?

  • Jasmine @makingrestorations

    as grad students who love to travel, we wouldn’t survive without a strict budget. love your tips. since we don’t really get “paid” monthly and get everything at once, I pay off a card any time we make a purchase over $200 just to be safe

    • http://totravelandbeyond.com/ Macy Volpe

      Thank you! I definitely understand having to pay things off right away.

  • http://lostrightdirection.blogspot.com/ Jenn

    Love Dave Ramsey! I read the books and have started listening to his podcasts and I’ve learned so much about money. With Josh being gone we can’t really use the envelope system but I’ll definitely be giving it a try when he gets home. I also told him I want FPU for Christmas and I want him to go through it with me. We’ve already made a dent in our debt with his plan and I’m so motivated right now :) I’m glad you guys found value in the plan too!

    • http://totravelandbeyond.com/ Macy Volpe

      I just started listening to the podcast, I only listen to a few specific ones about investments and what accounts to have, but I want to listen to it more. That is awesome! You will really enjoy FPU- it is a really great way to full understand the big picture.

  • Megan

    Yay! So proud of you guys! Chris and I have just started the conversation of our financial future and I can already tell he’s going to be the one putting his foot down. No I did not need the mason jars in the dollar spot yesterday… but girl they were cute. I will most likely be asking questions so get ready!

    • http://totravelandbeyond.com/ Macy Volpe

      Thank you!! That conversation is really so important and I wish we wouldn’t have waited so long to get serious about our finances. I really just had to stop going to Target because i couldn’t avoid just getting something “little”. Ask as many questions as you want! I am nowhere near a financial advisor but finding what works has taken some work. I am happy to share!

  • http://www.bourbonlipstickandstilettos.com/ Bourbon & Lipstick

    I need lots of budgeting help. Jason is great at not spending while I spend every single dollar (that isn’t going to bills/being invested). I am saving this!

    • http://totravelandbeyond.com/ Macy Volpe

      We were both big spenders and couldn’t stop. This has really helped us pay attention to where our money is going.

  • http://kyleandjensmith.blogspot.com/ Jen

    I love creating and sticking to a budget, there is really something fun about it. As weird as that sounds.

    • http://totravelandbeyond.com/ Macy Volpe

      I agree!! I am definitely the budget “nerd” and keeping us on track has been joyful!

  • http://www.wanderingweekenders.com/ Ashley @ Wandering Weekenders

    I think that some of Dave Ramsey’s methods are really great, but I agree with you about still wanting to use credit cards. If you’re keeping track of how much you’re spending on your card you can still use them and get the added points benefit as well!

    • http://totravelandbeyond.com/ Macy Volpe

      I absolutely agree! Finding the best way to put the concept he teaches into place is where we were best fit.

  • http://vivianbishop.com Vivian Bishop

    I am good at budgeting but am ready to take it to the next level. Our problems are cable (I want to cancel it so bad but my husband and sports…) eating out too often, and my random target trips. This is definitely inspiring me to try this method. We still use our credit cards just because they offer great incentives but we never allow them to get out of control!

    • http://totravelandbeyond.com/ Macy Volpe

      Girl, I am a TV junkie! Seriously. Dave is too. Thankfully we realized that everything we watch can be found in various places. We watch a lot of stuff the day after on Hulu, and we bought a digital antenna which helps with local channels and sports. I am dying without Bravo though. We are looking into maybe getting Sling TV which is really cheap and you get a ton of tv channels.

  • http://www.dreambigandbuytheshoes.com/ Emelia @ Dream Big & Buy the S

    I’ve heard his programs are amazing. I would love to learn more- I’m so bad at saving if it isn’t my 401K. I’m embarrassed to say I spend way more than I save. I would love to hear any more you have to share on this!

    • http://totravelandbeyond.com/ Macy Volpe

      I was the same exact way but this class really gave us a kick in the pants. I will definitely write some more posts now that I see there is interest!

  • Bailey @ Becoming Bailey

    I am the same way with Dave Ramsey’s system– I like the zero-based concept, but didn’t like the physical envelopes/cash. I too would rather have travel points! I use YNAB software and it really helps. I tried Every Dollar, but I didn’t care for it since in YNAB you budget based only on money you already have.

    • http://totravelandbeyond.com/ Macy Volpe

      I tried Every Dollar about a year ago and deleted it after a few weeks. Now I love it! We just have the free version but it’s helped a ton.

  • http://www.thefreeandwildblog.com Annie

    This is awesome! I love your own take on the system. I would love to see another post about how you organize your accounts as virtual envelopes! So interesting! I just got the Everydollar app because I saw you and Dave use it and it is SO helpful. I can’t believe I never used it before. This is definitely going to be a keeper. I love how you can take his class and then make it work for you as long as you stick to the principles of stay debt free and giving every dollar a place!

    • http://totravelandbeyond.com/ Macy Volpe

      Thank you! I will definitely write some more posts about this now that I see there is interest! I really didn’t like Every Dollar before when I tried it but with this new system it helps immensely. It’s so easy to check on the go and see where we are with specific categories.

  • http://www.always-al.com/ Alexandra Yargeau

    Ahh I’m so glad you posted this!! We are on BS 2. I have lots of questions:
    -How did you create the different accounts at the bank? Was there any cost associated with that?
    -I do lots of spreadsheets as well, but do you think EveryDollar really helps? I tried it and was just not thrilled, but I was using the free version.
    -Is the class worth it? I just bought some of his books used on amazon.

    I’m sure I’ll have others soon! :)

    • http://totravelandbeyond.com/ Macy Volpe

      Yay!! Good for you guys getting BS1 out of the way!
      – Yes! We have all of our accounts at the same bank and we were able to add them online. It was free as long as we created free accounts. One thing to keep in mind is some accounts have a monthly minimum and others have a limit on how many transfers can be made between accounts.
      – Every Dollar helps SO MUCH. Keeping track of spending while on-the-go has really help. I will be honest, I tried it last year and deleted it like a month later. I just didn’t think it was useful. Now that we have been following this method I would be lost without it.
      – YES!! Absolutely worth it. It helps so much with the “bigger picture” and giving ideas on how to really go about finding “financial peace”
      I think I will do a post on some of these questions next week to further explain, but feel free to email me! I probably won’t share exact numbers on the blog, but I am a total open book via email 😉

  • http://www.amayafirestone.com/ Amaya

    Wow! Your method for tracking savings on EveryDollar really helped. I had been looking at that category like “I’m never going to withdraw from it! Why do I need to set a budget for it?”.

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