YNAB forces you to be an active participant in your budget on a daily basis by manually entering each transaction. While people love Mint or Personal Capital because everything is automated, it’s the same exact reason why those programs didn’t work for me. Any bill that comes up gets paid right away.
By living on last month’s income, we don’t do this anymore. This (along with the money saved from Rule #2) creates a buffer within your checking account to help prevent you from getting hit with overdraft fees.īefore, my wife and I always had to double check if we had enough money in our accounts before we paid a bill. You only budget with money that you already have. With Rule #4, any income you receive in the current month gets applied to next month’s spending. We’re just going to pull money from other categories to cover or we’ll subtract the spend from next month’s budget to compensate. Rather than let it send our budget into a tailspin, we simply adjust. We just had an unplanned trip to Disneyland recently (our daughter’s first), which cost us an arm and a leg. There will be times in which you spend more than you anticipate or an unexpected expense comes up, and that’s ok. Sometimes your budget doesn’t go according to plan. This is far less stressful than scrambling to come up with the money whenever the bill arrives in the mail :) 3. At the end of every month the $200 gets rolled into the next month until it is fully funded next March. In March we have a $2,400 tax payment due that we’ve been saving $200 a month for since April. YNAB makes this easy by training you to treat these payments as monthly expenses. How many times have you been “surprised” with big expenses that happen once or twice a year like taxes or car insurance? How about Christmas shopping? What about things like car repairs that you know you’re going to pay for eventually? You are prioritizing your money according to what’s important to you – which in our case are retirement, vacations, and funding our daughter’s college. When you give every dollar a job, you can save more, invest more, and better plan for your future. This includes EVERYTHING, from monthly expenses such as water and electricity to more fun spending such as restaurants and going out.
Give Every Dollar a JobĪt the beginning of every month, you allocate every single dollar for your budget. It All Starts With The Four Rules of YNAB: 1.
#You need a budget classic how to
While other budgeting programs simply give you a tool to budget, YNAB is based on a philosophy and method that shows you – teaches you – how to actually stick to a budget. It wasn’t until we started using YNAB (You Need a Budget) when everything finally clicked.
Yet no matter how motivated we were, nothing ever stuck. It showed us what we spent our money on, but it didn’t really change our behavior. We tried Mint but found that it was reactive rather than proactive. Spreadsheets didn’t work because we couldn’t consistently input our transactions. Hey guys! I am SO excited to share this article with y’all today because I haven’t done a good job writing about YNAB myself (You Need A Budget) and that’s just crazy cuz this is a budgeting site!! And I love what they’re doing over there! So please welcome my boy Vic from today who shares his story on how it’s completely changed his finances and gotten his family to save and plan better for the future.
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