Should I Enter My Mortgage Under Housing or as a Debt?

The great thing about budgeting with EveryDollar is that it's simple, yet powerful and flexible. Most people will enter their mortgage payment under the "Housing" budget group rather than in the "Debt" section.

If you're working the Baby Steps (and we sure hope you are) then you pay off all of your debts except the mortgage on Baby Step 2. So most people won't include their mortgage in the "Debts" budget group, reserving that for the Baby Step 2 debts.

However, 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 so.

If you want to enter your mortgage under the "Debt" section, here's how.

Step 1. Create a line item for it there, enter your starting balance on the debt (as of this month) and your regular mortgage payment under minimum payment.

Step 2. In the "Planned" column on your budget, enter what you are going to pay this month (your regular payment plus an extra payment if you're on Baby Step 6).

Step 3. Enter your payment as an expense transaction just like you would with any other payment.

One thing to remember is that EveryDollar will reduce your debt balance by the amount you are paying each month. But you are also paying interest, probably PMI, taxes, and maybe insurance all through your mortgage payment. Those will need to be accounted for if you want EveryDollar to have an accurate balance on the mortgage balance from month to month. You will need to enter those as an income transaction on the "Mortgage" debt line item. (Just add up everything that's not going to principal and enter it as a total amount).

This will allow EveryDollar to accurately track your principal balance moving forward from month to month. (For more explanation see "Working With Debt.")

So in the end, you can incorporate your mortgage into EveryDollar in the "Debts" group or "Housing" group. It's your call!