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How to Budget with Dave Ramsey

Explore this Article
Step 1: List Total Income
Step 2: List Total Expenses
Step 3: Plan Your Spending
Step 4: Keep a Record
Free Budgeting Worksheets

dave ramsey budget

Everyone wants to have more power over their money and be at the mercy of strict finances less. What many people don’t realize is that the key to financial freedom is a strong budget.

Budgeting gets a bad rap sometimes as being too time-consuming, or by restricting your finances too much. But all you need is these 4 steps to make a budget, and once that’s done, you’ll find yourself getting out of debt, saving more, and becoming more financially free and comfortable in the long term.

Dave Ramsey has an article named, “Learn How to Budget” on his blog where he briefly outlines his simple 4 step process to creating a blog. So stop living in the monetary moment, and start living for the financial long term—it really is worth the 5 minutes it’ll take you to go through these 4 steps and create your own simple budget.

Step 1: List Total Income

total income

Dave Ramsey’s first step to creating a budget is, “Write Down Your Total Income.”

The very first step to creating any budget is to list all your sources of income and add them together to have a total income amount at the top of your budget. Dave Ramsey recommends that you use what he calls “take home pay” when adding up your total income. Take home pay refers to net income rather than gross income.

Net Income: Net income refers to your total income after taxes. It is sometimes called “take-home pay” because this is the amount that actually reaches your bank account after taxes get taken out.

Gross Income: Gross income refers to your total income before taxes.

You can find out your take home pay by finding the percentage of income tax for your state and subtracting that percentage from your monthly income.

Make sure you include all sources of income, including any second jobs, any freelancing, or side gigs.

Step 2: List Total Expenses

expenses

Dave Ramsey’s second step to creating a budget is to, “List Your Expenses.”

List all of the regular expenses you have every month. This includes anything and everything you’re your mortgage, utilities, rent, insurance, HOA fees, groceries, gas, subscriptions, clothing, debts, phone bills, etc.

One of the best ways to determine what all your regular expenses end up being is to look at your bank statement for the past month or couple of months and find the average amount you spend each month on everything.

Step 3: Plan Your Spending

spending

Dave Ramsey’s third step to creating a budget is to, “Subtract Expenses from Income to Equal Zero.”

The type of budget that Dave Ramsey suggests you make is called a zero-based budget. This is when your income minus your expenses equals zero. So every single dollar you make goes to some kind of category listed in your budget, not a single cent is unaccounted for. This is a good budget type because every single dollar you make has a purpose.

You do the most math in step 2 of Dave Ramsey’s budget plan. Divide up your monthly income into all your different expense categories until you reach zero. If, at the end of your budgeting calculations, you are above zero then you have funds that could still be going somewhere, like to the emergency fund. If you are below zero you have to reduce expenses somewhere so you don’t end up losing money each month.

Step 4: Keep a Record

record spending

Dave Ramsey’s fourth step to creating a budget is to, “Track Your Spending.”

Now you just have to keep track of all your transactions to make sure you stay in the budget guidelines you created for yourself in step 2 and 3. Figure out the best way for you to keep track of all of your transactions so that you can make sure you don’t go over in any of your budgeting categories.

There are a few ways you can keep track of your spending. You can use any number of budgeting apps, a detailed checkbook, another form of paper note taking, the cash envelope system, the cash wallet system, or prepaid debit cards.

Budget Apps

Dave Ramsey suggest you use the EveryDollar app as your budgeting app.

Checkbook

Using checks can make budgeting a lot easier. Every time you write a check a copy of the check gets written on the slip behind each individual check. By keeping these personal check receipts you can keep perfect track of all your transactions. You can also use the section in the back of your checkbook to jot down the details of all your spending.

If you want to learn more about the advantages of checks and how to balance a checkbook check out these helpful articles, “How to Write a Check” and “6 Advantages of Using Checks.”

Notebook

If you don’t want to use checks, you can still use a paper recording system to keep track of all your spending. You can find notebooks that are ready for this purpose on Amazon by searching budget workbook or expense tracker notebook.

Cash Envelope System

A cash envelope system is when you divide your cash up into different envelopes that are then assigned specific purposes. For example, you could have an envelope for bills, another for groceries, and another for gas. This way, you can only use those strict cash amounts to make purchases. The cash envelope system is a great option for those who have a lot of difficulty staying on budget and not overspending.

You can even purchase envelope systems on Amazon as well by searching cash envelope system where you’ll find envelopes and filing systems you can use to keep your cash organized.

Cash Wallet System

Another way to use the cash envelope system is to use a wallet with enough cash dividers for all your budgeting sections. These cash system wallets are helpful because you can keep all your cash organization neatly zipped up in one wallet. You can also use your wallet for your cards and checkbook as well.

Free Budgeting Worksheets

Tracking your spending in a way that works well for you might be the most taxing part of budgeting. But with these tips you can make recording expenses a breeze.

Some other things you can use to make budgeting even easier is one of Dave Ramsey’s budget forms. Any of these budget forms from Dave Ramsey’s website are free to use and can help you budget and plan.

Specifically his Monthly Cash Flow Plan can help you go through the steps and organize your funds according to Dave Ramsey’s easy money flow plan.

If you need a more simplified version of this budget form you can find it with Dave Ramsey’s Quick Start Budget.

 
Budgeting doesn’t have to be a colossal pain, and it doesn’t have to make your life sad and restricted. In fact, using a budget can be your key to long-term financial freedom.
 

READ MORE

Are you a college student in need of some budgeting help? Check out this article, “Budgeting for College Students 101.”

Read another article all about how to make budgeting easy, “Budgeting in 4 Easy Steps.”


How to Void a Check

void a check

Sometimes you will need to void a check, and in order to avoid problems you’ll need to know exactly how to do it. So if you need to void a check don’t panic! It’s really easy to do.

 

What is a Void Check?

A voided check is simply a check with the word “VOID” written across the front. Writing “VOID” on a check means that the check can’t be deposited or cashed. When you void something it means you’ve made it empty, of no effect, or null. So if a written check is full of the monetary amount you write on it, voiding the check makes that check financially empty.

When you void a check it can’t be used as a check, meaning it can’t be deposited. Usually a check is a document you sign to allow the recipient to withdraw the amount you specified from your bank’s checking account. Voiding the check makes the recipient unable to do this anymore.

Why You Might Need to Make a Void Check

You might need to use a voided check to set up an electronic link to your checking account. Most likely you’ll need to set up this link to get your paychecks through direct deposit, or to set up a recurring payment like your monthly bills.

Direct Deposit. Your paper checks all have your bank information on them—the name of your bank or credit union and your account and routing number. By giving a voided check, you give the person establishing the link the bank account information they need to set up your direct deposit. But because the check is void, they won’t be able to use the check to take money from your account.

Automatic Payment. You can also use a voided check to set up automatic payments. Auto pay can be very useful to stay on top of recurring bills like utilities, rent, or credit card payments. By using auto pay you won’t have to worry about forgetting any bill payment and accruing late fees and hits to your credit score.

Stop a Check Payment. Sometimes you’ll need to cancel a check payment after you’ve already sent or given the check.

Mess Up. If you mess up writing a check, then you’ll want to void the check you already wrote on and start over again. This can happen if you accidentally write the wrong amount on the check, or if you write the wrong name down for the recipient.

How to Write a Void Check for Direct Deposit

  1. If you don’t already have a checkbook from your bank or credit union, then contact your bank to receive one.
  2. Use a blank check from the checkbook that is linked to your checking account or the account where you want to make deposits.
  3. Write the word “VOID” across the front of the check in large letters. You can also write “VOID” in smaller letters over key parts of the check. You would need to write “VOID” in the payment amount box, across the payee line, and on the signature line. Either method should work just fine.
  4. *Cover most of the check with the word “VOID” but do not write over the check numbers at the bottom of the check. These numbers link the check to your bank account and are necessary for establishing the electronic link.

    *Use a writing utensil that cannot be erased, like a marker or an ink pen. Do not use pencil as someone could erase the word “VOID” and try and use the check to withdraw from your account.

  5. Keep a record of the voided check in your check register in the back of your checkbook. This way you can remember why you voided a check later on when you go to balance your checkbook.

 
direct deposit
 

How to Void a Check You Already Wrote

So you wrote a check and something goes wrong. Maybe you don’t need the check anymore, or you messed up writing it out and need to change something on it. If any of these things occur you can simply void the check to ensure it doesn’t accidentally get used later. Voiding a check you already wrote is a safe method of destroying the check.

Follow the same procedure outlined above and then store the voided check away in your banking files, or keep it in your checkbook.

How to Void a Check You Already Sent

So you wrote a check and gave it or sent it, but now you need to cancel it. Maybe you realized you messed up on the check, or the check got lost in the mail. Or maybe you realized too late that you won’t have enough money in your account when the recipient of the check goes to deposit it.

If either of these things occur what you are going to want to do is get a Stop Payment Order. A Stop Payment Order from your bank or credit union, is how you void a check you already sent.

Basically, voiding a check you already sent is like bouncing your check preemptively. If you know the check you wrote is going to bounce then canceling it before the recipient tries to make the deposit can leave you with less consequences and fees than if you let it bounce. However, fees for canceling a check payment are still going to apply.

If you need a Stop Payment Order for a check, your bank will probably need the information on the check you want to cancel. This is why it is always a good idea to document your check transactions in your check registry so that you will always have information like, the check ID number, the amount, and who you paid.

You can also try to just get the check back if it was given to someone you know. Handling these kinds of financial issues amongst yourselves is usually the least complicated option, and then no one will receive any fees from their bank. In the very least, you should let the check recipient know that you canceled the payment.

How to Get a Voided Check

To get a voided check you’ll need to talk to your bank and get them to send you a checkbook. Some banks and credit unions will automatically send you a book of checks when you first open an account with them. Others will require you to purchase your checkbooks from them.

How to Send a Voided Check

To send a voided check to your employer just ask them for the mailing address you should use. Then send the void check in the mail to them. Sometimes you can also bring them the void check directly into the office.
 
send a void check
 

No matter what financial service you use, be it a bank or a credit union, the process to void a check from any financial organization is going to be the same as the process outlined above. You simply write the word “VOID” in big letters on the front of the check. If you need to cancel a check, no matter the financial system you’re using, you can always contact them and they will run you through the procedure to stop a check payment.

How to void a check in QuickBooks

If you use QuickBooks, then follow this link to learn more about how to void a check in QuickBooks.

How to get a voided check from Bank of America

Take a look at the FAQs page for Bank of America to read all about voiding checks with their bank. If Bank of America is your bank, and you want to set up direct deposit, then you actually don’t need to void a check with them to do so. Instead you can just use their online banking to download a direct deposit form and use that document the same way you would use a void check.

How to get a voided check from Chase

If you have a Chase account, then you can also fill out a form instead of using a void check to set up direct deposit. All you’ll need to fill out the direct deposit form is your routing number, account number, and check ID number.

How to void a check from Wells Fargo

You can void a check from Wells Fargo online, by phone, or in the store. This link will have the phone number you need to contact them and the step-by-step process of how to void a check online.

Keep a Record

Always keep a record of all your check transactions, and of all voided checks. You can easily keep this information in the check register of your checkbook. You should also always keep the check stub—the thin paper copy behind each check you write—because this acts as a detailed receipt of all your check transactions.

When you record void checks, make sure to include the reason you voided the check as well.

If you need any other Check Cashing Services you can visit any Check City store.


READ MORE
Learn more about checks and how to fill them out properly, “How to Write a Check.”

Knowing how to use money orders can be another safe way to pay your bills, “Filling Out A Money Order Properly.”

Take full advantage of your checkbook, “6 Advantages of Using Checks.”

How to Write a Check

write checks

Not everyone uses checks on a frequent basis, so sometimes it helps to have a refresher on how to fill them out, just to make sure you get it right.

What is a Check?

Checks are a form of paper payment. They are a document that allows a bank to take money from the account of whoever wrote the check, to pay whoever is depositing the check.

Checks are a very useful financial resource. They come with their own unique properties and safety measures that make them a useful money tool to use more often.

How to Write a Check Out

check example
 

Listed below are all the different fields found on a check. You need to understand the purpose of each section in order to know how to fill each field out properly.

Field #1: Date

In the upper right hand corner you’ll find the date line. Usually you’ll just write the current date, but one of the great things about checks is that you can post-date it. This means you write a future date on the check to ensure it can only be deposited after the date you mark down.

So if you need to pay someone, but need them to wait until payday to deposit the check, you can still hand them the check now and just write a date after payday.

Field #2: Pay to the Order of

This line is where you write the name of who will be receiving the check. This might be the name of a person, or the name of a company or organization. For example, if you’re using a check to pay for groceries, then the name you’ll put here is the name of the grocery store.

Field #3: Dollar Box

In this box, you write the monetary amount of the check in numerals. So instead of writing “one hundred dollars” you write “100.00.”

Field #4: Dollars Line

Then there’s a line with the word “Dollars” at the end of it. Here is where you write the monetary amount of the check in words. So instead of writing “100.00” you write “one hundred and 0/100.”

Field #5: Memo Line

The memo is where you write a note about the check’s purpose. You can fill out this section for your own files, so that the check stub has what the check was used for written down. The memo section can also let the person receiving the check know what the check is meant to be used for.

You don’t have to fill out this section but it can be helpful to not forget why you wrote out the check in the first place.

Field #6: Signature Line

Here is where you sign the check.

Field #7: Numbers

The numbers at the bottom of the check are divided into 3 sections and show 3 different numbers. The first set of numbers is the routing number, the second set of numbers is the account number, and the final, shorter section of numbers is the check ID number for that individual check.

*Keep the check stub and use it for your files. The check stub is the thinner paper copy behind the check that gets written on as you write out the check. This gives you a hard copy of the check you wrote for your own checkbook.

How to Write a Check Amount

So how do you write numbers in words on a check? If you have any questions about how to write your specific amount you can take a look at the chart below. A printable number chart is also available by clicking here.

 
number word chart
 

Let’s quickly go over some frequently asked numbers to words questions:

How to spell 90: ninety

How to write a check for 1,000 dollars: In the Dollar box write, “1,000.00” and in the Dollars line write, “one thousand and 0/100.”

How to write a check for 1,500 dollars: In the Dollar box write, “1,500.00” and in the Dollars line write, “one thousand, five hundred and 0/100.”

How to write a check for 100 dollars: In the Dollar box write, “100.00” and in the Dollars line write, “one hundred and 0/100.”

How to write a check with cents

A lot of people have questions about how to write out cents for a check, but have no worries! This is the easiest part of the check because you can still write the cent amount out in numerals on the Dollars line:

After you write out the dollar amount in words, write “and” and then write the number of cents in numerals over 100. For example, if you want to write a check out for $100.50, you would write on the Dollar line, “one hundred and 50/100.”

How to Balance a Checkbook

checkbook
 

In the back of your checkbook there is a check registry—extra pages with a chart to record key information from each transaction. Whenever you write a check, keep the check stub. This will make it easier to fill out the check registry later.

Field #1: Write the date on the check in this column.

Field #2: In the description column write the same thing you would write on the “Pay to the Order of” and the memo line. This column helps you know who you paid and why.

Field #3: In the “Payment/Debit” column write down the amount you paid.

In the Deposit/Credit column record deposits to your own bank account. Keeping track of both payments from your account, and deposits made to your account, will help you keep track of how much is in your bank account at all times.

In the Balance column keep track of your total account balance, adding deposits to your account, and subtracting transactions you’ve paid.

Field #7: Write out the check ID number. It’s the last couple of numbers at the bottom of the check.

Common Questions About Checks

If you don’t use checks very often you probably have more than a few questions about checks and how they work.

What are the fees for cashing checks?

If you cash your check at Check City, then our fees are based on the type of check that is cashed. Our rates start as low as 1.99% for in-state payroll and government checks. That means for payroll and government checks it only cost about $2 per $100.

What information do you need to cash a check?

We have you fill out a quick application and you need a photo ID.

Do I have to wait for the check to clear to get all my cash?

No, once we have verified the check we give you all your money right then.

Is there a limit to the check amount?

No, as long as we can verify it, we can cash it.

When do you use a check?

You can use a check anytime check payments are permitted. If it is a personal transaction, you can always ask the recipient if they are ok with receiving their payment in the form of a check.

Where can I get checks?

You can get checks from almost any bank or credit union where you have an account.

How to write a check to yourself

Sometimes when you need to transfer your own money, you’ll need to write yourself a check to yourself. Writing a check to yourself is super simple. You just write your own name on the “Pay to the Order of” line.

 
Hopefully checks don’t feel as unfamiliar to you now as they did before reading this article. As you can see, checks are very simple to use, and easy to fill out correctly. You just have to know the purpose of each section on a check and you’re good to go!



READ MORE
Learn more about the benefits of checks, “6 Advantages of Using Checks.”

See how cashed checks can actually help your finances, “Cashed Checks Improve Your Financial Situation.”


6 Advantages of Using Checks

checks are better
 
Lots of people are still using checks and for good reasons. Checks actually have their own unique advantages and features that you may be missing out on if you only use cash or cards. Here are the 6 main advantages of using checks:

  1. Checks are safer to mail
  2. Checks can’t be used by thieves
  3. Checks are traceable
  4. Checks aren’t deposited immediately
  5. You don’t need a bank account to cash checks
  6. Checks make budgeting easier

Lots of people are still writing checks. Writing checks may seem old-fashioned, but there are many advantages to writing checks instead of using cash or credit cards. Using cards and cash might be quicker and easier, but checks have features and security that cash and cards just don’t have. Below are some of the main reasons you want to start making good use of checks.

#1: Checks are safer to mail

Sending a check in the mail keeps your money a lot safer than sending cash through the mail. When you have a check inside an envelope it can be very difficult for others to tell there is even a check inside. But if you put cash in an envelope it can be much easier for others to tell there is money inside since bills have their own distinct shape, material, and color.

#2: Checks can’t be used by thieves

Checks are also less attractive to thieves than cash. Checks cannot be cashed by just anyone, and that is too much of a hassle for a thief. Thieves want quick cash and forms of money that are untraceable, and checks are neither of those things. Also, when you carry checks you don’t have to carry cash or cards on you, making you less of a target while you are out.

#3: Checks are traceable

This is another reason why checks are safer than other forms of payment—they’re traceable. When you use a check the bank makes a copy so you can easily prove the payments you’ve made. All the information you would ever need about a payment is also written on your check and the underlying copy. With each check you can know how much you spent, who you paid, when you paid, and even what you were paying for.

#4: Checks aren’t deposited immediately

Another attractive thing about checks is the timing. It usually takes businesses a day or two to actually cash the check that you’ve written for them. This means that you have a day or two to make sure you have the money in your account to cover the check. This can be risky to do, but as long as you handle your checks wisely, then you should be able to use this feature to your advantage.

checks are better

#5: You don’t need a bank account to cash checks

When you get paid through direct deposit you need to have a bank account set up. But if you get paid with checks then you don’t need to use direct deposit or a bank account. If you get paid with checks then you can just cash them, you don’t have to deposit them into a bank account or deal with electronic funds.

Check City offers convenient check cashing services for all of your check cashing needs. If you’ve been paid with a check you can come to any convenient Check City location and get that check cashed immediately. Check City will cash payroll checks, cashier checks, counter checks, government checks, insurance checks, money orders, tax refunds, personal checks, and even out-of-state checks. If you have a check, it is likely that Check City will be able to cash it for you.

#6: Checks make budgeting easier

Every time you write a check you are simultaneously writing your own personal receipt to go along with that purchase. These slips of paper can make budgeting super easy as you can keep those in your checkbook, and at the end of each week or month you can see an overview of all your spending in one convenient place.

Check Cashing with Check City

You may be wondering why you should come cash your check with Check City instead of going to your bank. Well, there are several reasons.

#1: Open Late

One reason is that our locations are open later than almost every bank or credit union. We have extended hours so you can come cash your check after work, or almost whenever you’d like. This makes it so you can get your cash sooner rather than later.

#2: Fast and Easy

Check City also understands how important your money is to you so we want to make sure the process of cashing your check is fast and easy. Our personable staff will make sure your transaction goes through as quickly as possible. As soon as you come in, we’ll be ready to help you and get you on your way.

#3: Low Rates

Check City also offers extremely low rates when it comes to cashing checks. We will not charge you much to cash your check with us, and the convenience of coming to one of our locations greatly outweighs the amount we’ll charge you to cash your check.

You Need:

All you’ll need to come cash your check at one of our locations is your check and your photo ID.

You Do:

All you’ll do is walk into one of our many locations, fill out a quick customer information form, and walk out with your cash in hand. Check City has locations in Utah, Nevada, Colorado, Virginia, and Maryland. At Check City, we want to make sure you get your money when you want it and how you want it. That’s why we offer convenient check cashing services that you are welcome to use anytime.

Cash Business Checks with Check City Too!

Check City also cashes business checks. This means that if people have paid your business in checks you can cash them easily here. In today’s credit driven economy, cash flow management is a challenging task for many small to medium-sized businesses. Check City has provided financial services to the public and its businesses since 1986 and we value the trusting relationship we’ve fostered with our communities ever since. Check City’s Business Check Cashing provides business owners immediate access to working capital by fast tracking the processing of checks to make your business funds available instantly. Cashing business checks at Check City is a great idea because there are 1) NO enrollment fees, 2) NO 3 to 10 day check processing holds, 3) the funds are available instantly, 4) gives your business the freedom to accept checks from your customers, and 5) we have convenient and professional locations.
 
Don’t waste your time thinking checks are a useless tool of the past. Checks are a useful financial product for personal and business use with their own unique features. Checks also provide a level of security in your transactions that cash does not. So don’t forget about this important tool in your financial arsenal and learn to use checks to their full advantage.

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