Dave Ramsey's Every Dollar budgeting tool

I've gone through a 'one month cycle' and at least from a systems analyst Point of View, I see where, why and what the problems are. I hope someone from Dave Ramsey Financial Solutions reads this blog and gives their tech team a heads up.

Despite the fact that much of this blogpost will be (justified) criticism of the software, I am thrilled that Dave Ramsey (DR) and his team have come up with a budgeting tool. Named EveryDollar, after DR's motto that "Every Dollar should have a name," it's strongest point is that it mirrors the DR Financial Peace program. If you have read The Total Money Makeover, or attended Financial Peace University, Every Dollar follows the Monthly Cash Flow budgeting worksheets, although not in such cumbersome detail as those sheets. Every Dollar can be found at http://www.everydollar.com, and the basic program is free. The paid-for version ("EveryDollar plus") ties in to your bank account so that transactions can be downloaded. It costs $100 a year, and it seems like a great idea (can't be worse than Mint.com), but the Basic/free version is buggy enough that I'm going to wait until the bugs get worked out before I start shelling out money and my bank account transactions.

So. Biggest upside? Enough line items to make a nerd crazy. Planned categories, actual expenditures, and remaining money categories. Those are nice columns, although the remaining money one doesn't work so well.

Let's start with a Tutorial. Actually, we can't. There isn't one. And I'm fine with that, but the flip side (in my not so humble 25+ years of designing software systems opinion) means you better have a really good, intuitive system then. Alas, intuitive is not an adjective which can be laid at Every Dollar's door.

But I do know why that is the case. I can see clearly that the DR tech team has fallen victim to swimming "too close to the product" test pool. If you know ahead of time how it's supposed to work, and you live and breath the DR FPU system, then their design is understandable. Transactions, a major component of this program, really fails due to the 'too close' syndrome.

Once you have set up your budget (which you can't really do until the first of the month if you want everything to square up), your budget will show planned line items. One would think you could simply tap the planned line item, enter an actual transaction amount, and save it. Nope. A window does pop up, but it doesn't save the information. It takes another 3 or 4 tries, executing the line called budget category, re-entering the data a few times, for it to finally "save." That's ridiculous, and counter-intuitive. On the other hand, if you look in the far right, upper right corner, you'll see a tiny little transaction icon. Clicking on that brings up the same pop up window as on the line item, which when you enter the amount, enter the "vendor", choose a category, then click on add expense, it will save it. 

You got that, right? FOUR steps to add a single transaction, and you have to hunt for the icon to get there in the first place, versus something which ought to be intuitive at the line item (but doesn't work either.)

Debt, another major component of the DR program, is a category which needs some overhaul. Say you start setting up your budget at the end of March. You more or less know what your outstanding balances are going in to the month of April, so you plan to start the month of April with a clean slate. Can't do it. You get this annoying error message which says "No Cheating. You're not in April yet, so you can't enter outstanding balances." I almost fell off my chair. If the EveryDollar system was tracking my interest rates, % of payment applied to principle and % applied to interest, that would be one thing. Then I could see why it wouldn't let me mess with its algorithm. But it doesn't. So why should it matter that it's March 28 and I want to enter the balances starting April 1? I actually have to remember to come back on April 1 and enter starting balances. That's ridiculous. And user un-friendly. And the trick to entering the balances as a line item isn't intuitive either.

Remaining balance. Once I figured out what it was doing, I calmed down, but this and the income are columns which need some major overhaul IMO. Or the DR tech team knows about the hiccup, but couldn't figure out a better way to do it, so they left it. 

Here's what happens: you plan/lay out your income for the month on April 1. For us, that's two of DH's salary checks, one of mine, and a low ball amount for irregular income which fluctuates. The first three are calendar items, for example, 1st, 15th and 30th. The income category algorithm treats all of the income as arriving on the same day. So your planned income is say, $5000 for the month, made up of two $2000 salary checks, one $500 salary check, and $500 in irregular income.

First check comes in and is short by $60 because you took an unpaid day off. The income column treats this shortfall as though the $60 is still outstanding and is owed to you. There's no way to get rid of it, other than to go back to the planned column and adjust it downward, which defeats the whole purpose. 

So you leave it.

You pay rent on the first, which in theory should leave you with a zero balance, but instead you are $60 to the good (rather than being $60 overdrawn if your entire check is used for rent as ours is), because Income thinks you are still owed the $60 and just haven't been paid yet. Because you actually paid out $2000 in rent, it matches the planned amount, so it doesn't show a deficit, and because all of the income is counted April 1 versus when it is actually received, your pocketbook doesn't register an overdraft, which is actually the case.

That's a major flaw, IMO.

Second check comes in, and it's time to pay the bills. So I pay all the bills, and by my math, I should have $145 left in the bank. Not according to EveryDollar I don't. According to EveryDollar I have $800 remaining (Remaining is the category name) because it assumes that ALL of the income comes in Day 1. It took me a while to figure that out...

Now, I'M a nerd. With an accounting degree. So when the T columns don't balance, I go looking for the reason why. But my DH is a free spirit. He sees "$800 remaining" and is likely to shout out "wooo hooo" and throw a party or buy stuff for his motorcycle with that "$800 remaining" balance. And that's a very real danger in every household, not just mine.

So my choices are: NOT plan for EveryDollar at the beginning of the month like I do with my spreadsheet (I have check 1 goes to x, check 2 goes to xyz, check 3 goes to x, irregular income goes to abc), and have it not balance correctly until the end of the month, which IMO is way too late to course correct, OR

come back MULTIPLE times in the month as the money comes in, and work it in reverse (because I will have already planned for the expense.) So now I am applying INCOME to the expense, rather than expenses to the income. It's a viable work around, but it is a huge design flaw if you are accustomed to working the DR plan.

Yeah, choosing either option defeats the purpose and is likely to get me to throw up my hands and give up if you're a regular non-budgeter. Me, I chose to go back to my spreadsheet.

EveryDollar is a great idea whose time has not quite arrived. It needs some major tweaking, which will be a painful upgrade given its successful download/launch. Many of these problems would have been avoided by better testing from non-employees of DR. I hope the tech folks undertake the changes. Dave Ramsey's Financial Solutions are phenomenal, and he deserves way better than this.