The great thing about budgeting with EveryDollar is that it's simple, yet powerful and flexible. Most people enter their mortgage payment under the Housing budget category instead of the Debt category—but it’s totally up to you how you want to do it.
If you're working the Baby Steps, you should pay off all your debts except your mortgage in Baby Step 2. Because of this, most people won't include their mortgage in the Debt budget category.
But some people do want to track their mortgage debt and how quickly (or slowly) they're paying it off. And you have the flexibility to do that!
If you want to enter your mortgage under the Debt category, here's how:
- Go to the Debt budget category and create a line item for your mortgage. Enter your starting balance on the debt (as of this month) and put in your regular mortgage payment under Minimum Payment.
- In the Planned column on your budget, enter what you are going to pay this month (this should be your regular payment, plus any extra payment you can manage if you're on Baby Step 6).
- When you make a payment, enter it as an Expense transaction just like you would with any other payment.
One thing to remember is that EveryDollar will reduce your balance by the amount you pay each month. But with a mortgage payment, you’re also paying lots of extra fees—like interest, taxes, PMI and insurance. You’ll need to account for all of those expenses if you want EveryDollar to have an accurate balance on the debt from month to month.
To account for those extra fees you’re paying that aren’t lowering the principle amount, you’ll need to enter them as an Income transaction on the Mortgage debt line item. (Okay, we know that sounds crazy—these fees aren’t income. But hear us out.) Here’s how to do that:
- From your desktop, click on the Mortgage line item you just set up.
- From there, add a new transaction, and make sure you select Income, not Expense, at the top.
- Add up everything you’re paying this month that's not going to the principal amount (so those interest fees, taxes and such) and enter that as the amount for the transaction.
Ta-da! This won’t affect your payment, but now your debt will show a lower amount paid off so far. That’s because we want to accurately track your principal balance moving forward from month to month—so we don’t want to subtract the fees you’re paying on top of that.
So, to answer the question, you can enter your mortgage into EveryDollar under Housing or Debt. It's your call!