This was really great, thank you. I’m 8 years into YNAB, and I manually entered and reconciled every transaction for the first 7 years. This past year it’s become clear to me that I no longer need to work that fine-grained, but I wasn’t sure how to go about it. I had even been thinking of writing to YNAB support asking for guidance on how to use YNAB when money isn’t stressful anymore (completely different from the day I first signed up!) I don’t need to think about how much I spend on toothpaste or toilet paper, or even groceries for that matter. All my bills are on auto-pay. So now it’s more about long-term goals, and looking at how my financial behavior supports or undermines those goals. This episode gave me some good ideas on how to revise my budget to that end (and was a lot of fun to watch!)
How I know I'm a true budget nerd: I ✨love✨ listening to people describe how they set up their budget! So interesting to hear what works for them and why. Thanks for sharing, Lee!
57:00 I've only ever had to split transactions in 2, but, lately, I've been doing this so I don't have to do the math: At the store, scan all the things in one category (for ex, Halloween) then take a pic of the screen with the current total. Then I check out the rest of my things (for ex, groceries). Later, when splitting in YNAB, I pull up my pic on my phone and put that amount for the first category. The other category is the remaining amount! And, voilá, zero math splitting!
You just absolutely blew my mind! I have done the trick of scanning things in category groups, but I never thought to take a picture of your screen when you move on to the next group of items. ~BenB
@@YNABofficial Yay!! I am going through a MAJOR life change that has been extremely detrimental financially, but YNAB has been seeing me through it all. I'm so grateful for the Budget Nerds and HIFH videos. Can't wait to eventually propose my own episode for Budget Nerds in a year or 2 🤞🏿... I already took my before pic when i first started a few months ago lol
20 min in and absolutely love the episode - what a great thing when we get this type of special eps of YNAB stories! Also, categories content is *quality* content 😂🎉
This has to be my favourite Budget Nerds episode ever! Love seeing how passionate Lee is about YNAB! Given me lots of ideas and I'm already adjusting some of my budget! Thank you!
fun episode! Loved looking into Lee's budget. I also wanted to report my YNAB win. My pay was 4 days late due to a glitch with the payroll system. I almost feel guilty saying that it didn't affect me at all, because I know not everyone is as fortunate as me to have found YNAB. It didn't affect me at all because I no longer live paycheck to paycheck. Thank you YNAB!!
I totally get what he means about furniture- I have two categories that cover things like that. 1. Household items (consumables) 2. Household items (durable goods)
This comment about it being a barometer confused me. Definition of barometer: something which reflects changes in circumstances or opinion. So is savings an “in case of job loss” fund? Is a target set according to how many months of expenses you would want that fund to hold? How is it a barometer?
Just as a rising barometer suggests improving weather conditions and a falling barometer indicates potential for worsening weather, consistently failing to meet a savings target each month indicates an imbalance in the budget. In both scenarios, the observed changes signal a need to reassess the current approach or priorities-whether it's preparing for changing weather or adjusting financial habits to ensure that savings goals are met.
Great video. Just came here to say that any life insurance product with « cash value » embedded is essentially just that the insurance company takes part of your premium to invest in some financial assets (e.g. S&P500 ETF) and passes on a tiny tiny fraction of the return back to you. You’re always better off of to just buy a pure life insurance product for a much lower premium and invest the money saved yourself.
I wanted to say the same thing. Lee mentioned having a policy with a death benefit and cash value, and that sounds like a whole life policy - which is never a good move financially. The Money Guys just did a whole episode on this and why it's a scam. Hoping I just heard that wrong Lee!
@@andrewmitchell571 It's so funny that there are so many opinions on Life Insurance. As I mentioned in the video, this is something that my husband got before we met and I just manage the tiny outflow it requires to keep it going -- I do not personally recommend or not recommend it to anyone. Whether or not this is a wise choice for someone and their situation is highly individualized.
Loved hearing another perspective on the categories! Also, Lee convinced me to move my emojis to the front, some still have more than 1 emoji (because 2 kids ya know), BUT they are in the front and I like it 😂 I also love the positivity in the budget, I made a few tweaks to some names to remove that negativity or bad feeling that was associated with some categories.
I have a Tech category with Phone, computer, projector, mouse, cases, screen covers, cables, external hard drive, tech accessories. I love using the emojis which I learned about from your videos. Even the name of my budget has rainbow, heart and unicorn emojis. Thanks YNAB!
Be cautious with holding on to your income tax and paying it all when you file your return. The IRS will charge a penalty if you don’t pay enough tax during the year through withholding and/or their estimated taxes. 😢
Yes! This is a very good point I forgot to point out! You absolutely can withhold too much and get hit with a fee. Thanks for mentioning this for everyone :)
Disclaimer; nerdy budget nerds comment. I don't know if you've ever done a video on this but you can sort of use YNAB as a personal 3-statement financial model. The Income vs Expense report is ~an Income Statement. The accounts are a Balance Sheet. 'Budget Accounts' are Current Assets and Current Liabilities. I also do pre-paids in YNAB, such as prepaid insurance as an asset and amortizing it over time with scheduled transactions. Tracking accounts are Long Term assets (retirement, house, car) and long term liabilities (car loan, mortgage). You can amortize your car with scheduled transactions if you want, or just manually write down the value by reconciling it to an estimated market value. Then your Net Worth is what a company would have on the balance sheet as owner's equity. If you think of YNAB this way, it starts looking a lot like a tool to develop your direct statement of cash flows.
I like the positive approach to categories - you're reflecting on what you're doing with your life and managing it. That's what budgeting is all about.
This was awesome!! Loved this video. Lee’s categories are chefs kiss with the simplicity & name alignment ❤😊 I’ve recently simplified but I’m always back & forth too. Do I want detail, do I not? Every time I add more categories for more details, it doesn’t last long. PS, it wouldn’t matter if the video was 3 hours long, I would watch EVERY minute 😂 The longer the better 😆 Love it ❤
@@rleebond you’re so welcome ❤️ I’ve watched your video at least 3 times already 😊😍 I love the details and explanation behind how the category works for you & your husband 🎊💕
i love furniture in home maintenance - i do own a home but never knew where to put the nightstand or lamp i bought.... i put it in my "didn't know where to put this" but now i know where to put it! Thank you...
I think you can vague with categories when you have plenty of extra cash. When you’re tight with money, you have to have very specific categories because there is no money to move if you overspend.
I had a "Groceries" group because I needed to know where hundreds of dollars a month were going specifically because it was my biggest expense when I was low-income. But I kept it across Fresh Starts. If you're good, it also allows you to check the app while you're shopping to see what's a good deal and what isn't. So I have Fruit, Veggies, Cheese, Spices, etc. categories that only include food (I go back and forth on whether Alcohol should be under Groceries or like Entertainment). It does take a while to type up a receipt after putting away groceries but I think it makes it more intentional spending. I started YNAB over 10 years ago when working as a cashier making less than $10/hr, $20k. Now I'm in tech and making several times that but I still have a groceries broken down. I can't stand having too much money in a single category, there's too much mystery unless maybe they're big, one-time purchases like "Furniture". But I spend over $5000 on groceries per year, that can't just be one big blob.
i wonder if you'll ever have someone on who has two or more budgets for a couple. I have my budget, a budget elsewhere for my husband and our joint budget. We still communicate and have shared goals but we are happy with different budgets and a jointish one.
Super interesting episode. Lee and I have very different lifestyles (I am not a high earner!) and different approaches to our budgets, but I learned so much that could make my budget even better. Thanks Ben, Ernie and Lee!
@princegolis510 I am not sure I understand your question. I use categories for contribution spending to those accounts (which are transfers out of the budget and inflow in a tracking account). Pre-tax (i.e., 401k, HSA, etc) income is a little more complicated. For those transfers the inflow into the budget will match the outflow transfer to the retirement account. Let me know if this doesn't make sense :)
@@rleebondhow do you pre-fund for the year? So say if I wanted to try your methods starting in July, I would just could add 1 transaction for my paychecks, fill it for the year and allocate the money until December?
@@abccarroll1 Hi there! So how I budget for the year is still on a monthly target basis...that just builds up to a total goal amount. So in your instance, let's say I want to spend 500 on restaurants a month, if I started the target in July I would put a target date of December and the amount would be 500x6 (since you only have 6 months left of the year) which would be 3,000 total. YNAB will then break that up into a monthly target depending on if you overspent to that target (like if you spent 550 in one month, the next months target would be a little less than 500...make sense?). Let me know if you have any questions, happy to chat here!
@rleebond. Thank you for this! I have been waiting to see how others use YNAB to better track retirement contributions and balances. I have a question about how your yearly budget for retirement tracking works. I understand creating a yearly target for the max contribution limit, but how do you actually handle that in your budget? Are you manually adding the amount that was auto pretaxed taken from your pay check as a split when you see your direct deposit go through? Or do you just add it all as Ready to Assign and then assign that money to the 401k account and then transfer it to your tracking 401k section? I am having an issue with how to move that money because you never actually saw it in your checking account.
Hi Jenny -- I love this topic, and it's one of my favorite things to manage in YNAB. What I prefer to do is create a "dummy" account (which I call "Pre-Tax Tracking") that deals with retirement contributions. For me, it not only helps to keep my checking account clean, it allows me to hide this income in reports if it's in its own separate account. I get paid twice a month, and that's when my retirement contributions also take place -- so for each pay day I have a split transaction that is both the income (which goes into ready-to assign because I want to see that in my reports) and the outflow (which is a transfer to my 401k account that I am also tracking in YNAB) is categorized as you see it in the video. This makes each one of these manual transactions net 0 because the splits cancel each other out. Make sense? Let me know :)
@@rleebond Do you set “Goals” within the budget for these deductions and transfers since they’re distributed from your gross income? Trying to match my budget Goals to Income. I think the gross income is what is listed in the right sidebar.
@@mfharper5 I am not sure I'm understanding you correctly, do you mean "Targets" in my budget? If so, then yes! My checking account handles my net income transactions (as in my work sends money to my checking account) and the "dummy" account I mentioned above handles only my retirement income (i.e., how much of my income is set aside for my 401k pre-tax). That way I can create a Target for the year and track my retirement contributions into my 401k and HSA. If you follow what I said above, you will have inflow into the budget and outflow (the actual transfers into my tracked retirement accounts) in equal amounts. Make sense?
@@rleebond oooooo cool! The dummy account makes sense. I'm going to try this out and see how it feels. I have been using YNAB since 2011 so sometimes I forget to try new things. THANK YOU!
Can you show us how it practically works with the reimbursement category? I'm struggling with for example medical costs which are sometimes 100% covered and sometimes not. And more often than not are only reimbursed in the next month.. not always immediately. I would love to see how you practically deal with that. Or ask Hannah to do it.. Love her.
Hannah is amazing, and unfortunately I can't really "show" you in the comments, but I'll do my best to describe how I just my Reimbursements category. I think it's easiest to just talk you through a hypothetical: Say you are going on a trip with friends, and you graciously offer to book everything (but secretly you just wanted the credit card points ;) and your friends will reimburse you their share at some point in the future. Now, what that looks like in terms of the budget is a ton of travel category "negative" spending in one month and then in the next month a potion of "positive" spending (that is if we both agree that when your friends reimburse you, you're not categorizing that as income -- instead you are putting that inflow into the travel spending category). Instead of doing this, what I do, is split the original cost of the vacation into two categories: 1. travel and 2. reimbursements (which is the amount your friends are going to send back to you eventually). Then when your friends do reimburse you, you categorize that into the reimbursements category. Just note that within your budget, you will still need to cover the full amount (that is, you'll still need to fund your reimbursement category) but you will also be able to move the reimbursements inflow to wherever you want in the budget. Not sure if this makes sense, but happy to have a back-and-forth here :)
No emojis for me. It's just too distracting. I manage 4 budgets, and there's only 1 emoji, this one: ⭕ which I use to quickly find that particular category which is a holding category for savings that I use to cover some unforseen overspending. Otherwise I use blissfully minimalistic monochromatic budgets.
I love what you said about taxes! I have a big tax bill every year and thought about increasing my withholdings. I am so doing my own tracking now and will pay at filing time. It is so true that using YNAB is empowering in surprising ways!
OMG, I called it that for awhile too...too funny! And yes, I do have yearly targets on all my categories: Savings Builder on my "Cash Savings" category with a 12/31 target date and everything else is Needed for Spending with a target date of 12/31. In January I build out a monthly template (based on my general expected monthly cashflow) -- all I do is, in the Target edit field, put the monthly amount I want to contribute to every Needed for Spending category and multiply by 12. This way if you overspend in a month, you'll lose a little for the next month (and so on through the year). And if you underspend it will start to pile up month-over-month (unless you do the "zipping" thing I do which is a little more complicated). Throughout the year I might go back to January and reallocate the template amounts if needed (like if we had unexpected spendings in some categories). Let me know if you have any questions! Good luck!
@@rleebond I have done this on a few categories but it never occurred to me how clean it would be for all of them! 12 years with YNAB and I love when I discover yet another way to shake things up and revamp the budget! I'm trying this for my Jan 2, 2024 (National Introvert's Day 🤓) Budgetapalooza! Thanks!
I loved this episode as per usual YNAB and@@rleebond! For Lee though, I would love to know more about the "zipping" thing you do. I listened to the episode and did not quite get it, but I am so curious because I share the opinion that it can be hard to track progress and stay accountable at the end of the month. When you zip all the available money at the end of the month and looking at how much cash you had after that month, are you basically redistributing it all in the next month along with any new income? Almost like a "fresh start" every month? Also: Miniature dachshunds are the best, and yours are adorable!
@@catchafahlingstar I think you have it mostly correct! So, as long as you are using yearly targets on all of your active categories, all I do at the end of the month is move all my available cash from categories (except from CCs) to my Savings Fund category. Then at the beginning of the next month, I redistribute (from the Savings Fund) to fund all my targets, which are all readjusted (i.e., if I overspent the month before, I will now have less in that category, and if I underspent, I will now have more for that category in the next month). It's a great way of pacing your spending and keeping you honest throughout the year. And this way, if you have look back at prior months, you'll know how much cash you ended that month with all in one place/category (soooo much cleaner to me then having random amounts in multiple categories). Sorry for the lengthy response, let me know if you have any questions!!
Fellow Boston-area YNABer 👋🏼 Delightful was the right word for this chat! I’m so curious about your strategy and how you use targets. Which type do you use and do all your targets have a 12/31 end date? Also, Ernie and Ben, do you guys share the full category lists somewhere when you do these?
@seamickdee For every single active category I put a Needed for Spending target (which is informed by the Venn diagram of spending goals/LY actuals/general averages), with a 12/31 target date. This way it keeps me honest to overspending. Make sense?
Hey, good question! When you budget yearly (as I do because I have enough of a cash cushion saved up), you start to think about it a little differently. The due dates don't matter as much as planning for the dollar amount does. So when you look at the full year, just make sure you cover these two amounts (plus whatever else you might need in that category for the year) as your target -- this way the due date doesn't matter, as you know you have accounted for it in the total year target. Make sense? -- probably just confused you more hahaha! Happy to have a back and forth here :)
Wow. You guys have me contributing to the chat. That is awesome. Wife and I also track and budget. She texts me whatever she spends and I input it in YNAB. Used to only track in excel but now have much more feeling with it. I reconcile 6x a week. One joint account too. Always have been. We’ll share 50/50 if we ever would need to break up. Doubt that will happen though. Trust. Only question I have is.. won’t you end up having 100s of hidden categories after a couple of years? All the short term goals become hidden after they are fulfilled and now they add up?! Anyone any insight?
Love this comment!! I personally just delete the short-term goals after they have been fulfilled -- or they become a new spending category. For example, if I am saving up for a boat, I might put a savings balance target on that category and just start stacking up the cash overtime. Then, after I buy the boat, there will be costs associated with that purchase, so I would just integrate those into my normal categories or create new ones. Then the original savings category can either be deleted or morphed into a usable category.
@rleebond How are you budgeting your 401k and HSA as income, but not your whole check with taxes/etc.? Are you just bringing those deposits in separately as income when they hit your accounts?
YESSS! I was waiting for someone to ask this! So, I prefer to have a dummy account on budget that I call "Pre-Tax Transfers". In this account I use a $0 sum split transaction (one split is inflow, the other split is an equal outflow, so the net total is $0) to track Inflow (401k amount + HSA amount) and Outflow (the actual transfers to the respective tracking accounts, which is categorized in Retirement for me on the budget). I like this way because in reports I can show or hide this pre-tax income. It also keeps my checking account transaction clean.
@@rleebond Lee, I apologize for being late to this conversation. Can you explain how you manage the Payee/Category information when you do you $0 split transactions? The outflow I believe I understand (category being retirement with the payee being the tracking account). I am having a hard time wrapping my head around the inflow component. Thank you!
And could you remind me @leebond, you changed your mind on emojis and embedded them into your budget, because you found it helped you quickly identify/choose categories when scrolling up and down your budget page? That's an interesting hack, has me thinking what shapes/colours work best to draw the eye, and how this would also help on scrolling the mobile app, which is smaller screen and sometimes feels a bit, 'crammed'?...
great video thanks. can anyone please point me in the direction of the video of another high income earner's category structure. It was a man and he had 1 category for personal spending like jeans and coffee in the same category thanks :)
Interesting that you pay as little in taxes as possible, and then wait until you prepare your return to pay it. This seems like it would often mean you're owing penalties. Why wouldn't you want to avoid those penalties? Or, as you said you just started doing your own taxes, so perhaps you don't realize there are penalties? Anyway, just a curiosity. I definitely don't like to give the government an interest free loan, but I also don't want to pay them interest.
Thanks for responding! I should have been clearer...I pay as little withholding possible WITHOUT fees incurring. If you didn't pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller.
@@rleebond oh I’m a nerd. Real nerds don’t use Excel. They use Jupyter and cloud functions. Excel is a tool that all real nerds wish would die because it causes security problems, creates something called data islands, and selfishly stores institutional knowledge on someone’s computer instead of taking time to build an actual application that many people can leverage.
HINJ, DINK, DINKWAD, YUPPIE, FIRE How does Reimbursements actually work? Jan - budget $1,000 (comes out of cash flow) [category is $1,000 - available to spend] Feb - spend $1,000 [category is $0] Jun - Reimbursed $1,000 [Reimbursements category is now $1,000 available to spend with $0 budgeted] How do you zero it?
It sounds like the original $1k in January was your own money so now you can move that $1k from June to another category(ies). Or leave it there for the next round of reimbursements. ~Ernie
Yep! Just redistribute the 1,000 to another category or to Ready to be Assigned. When you do this, despite it being across several months, you’ll still net out to 0 (minus 1k and plus 1k). This helps me clean up reports since I can just exclude this category for the reporting view. Hope that makes sense!
Hi Budget Nerds! You all should collaborate with Caleb Hammer! You all can really help change lives and directly impact his guests with the incredible content that you all provide! @CalebHammer
I believe DINKWAD is the term you’re looking for 😂 Double Income No Kids With A Dog
Hey Emily 👋 I miss your videos!!! Hope you and your family are doing well! ❤
We affectionately call our dog "DINKy dog" 😂
I can't stop laughing at this term 🤣 ~Ernie
This sounds even meaner than DINK. 😂 ~BenB
@@angeljuarez93 Hi Angel! Thank you! We are all doing great, hope you are as well!
This was really great, thank you. I’m 8 years into YNAB, and I manually entered and reconciled every transaction for the first 7 years. This past year it’s become clear to me that I no longer need to work that fine-grained, but I wasn’t sure how to go about it. I had even been thinking of writing to YNAB support asking for guidance on how to use YNAB when money isn’t stressful anymore (completely different from the day I first signed up!)
I don’t need to think about how much I spend on toothpaste or toilet paper, or even groceries for that matter. All my bills are on auto-pay. So now it’s more about long-term goals, and looking at how my financial behavior supports or undermines those goals. This episode gave me some good ideas on how to revise my budget to that end (and was a lot of fun to watch!)
That's awesome!! It's funny how this process evolves overtime as habits become the means to get where you want to go.
Regarding the question around the 2:30 mark: DINKWAD - double income, no kids, with a dog. That one cracked me up when I read it.
lol same! ~Ernie
How I know I'm a true budget nerd: I ✨love✨ listening to people describe how they set up their budget! So interesting to hear what works for them and why. Thanks for sharing, Lee!
I describe YNAB as an “Elegant, Electronic, Envelope System”
Running this by our writers, cause I love it! The alliteration! ~BenB
@@YNABofficial Everyone I've asked knows what the envelope budgeting method is so it's an easy mental shift to the electronic version.
@@YNABofficial 😊 An alternative is "Elegant, Electronic Envelope Spending Plan"
57:00 I've only ever had to split transactions in 2, but, lately, I've been doing this so I don't have to do the math: At the store, scan all the things in one category (for ex, Halloween) then take a pic of the screen with the current total. Then I check out the rest of my things (for ex, groceries).
Later, when splitting in YNAB, I pull up my pic on my phone and put that amount for the first category. The other category is the remaining amount! And, voilá, zero math splitting!
You just absolutely blew my mind! I have done the trick of scanning things in category groups, but I never thought to take a picture of your screen when you move on to the next group of items. ~BenB
What an excellent idea❤❤❤
This is brilliant, thanks for sharing fellow budget nerd 🤓
Love this trick, and will be using it today!
@@YNABofficial Yay!! I am going through a MAJOR life change that has been extremely detrimental financially, but YNAB has been seeing me through it all. I'm so grateful for the Budget Nerds and HIFH videos. Can't wait to eventually propose my own episode for Budget Nerds in a year or 2 🤞🏿... I already took my before pic when i first started a few months ago lol
The way Lee’s ceiling lines up perfectly with Ben’s ceiling is as elegant as his budget!
Oh my goodness-how did I not realize that? Soooo beautiful! ~Ernie
I would love to see a vid blog on the 'zip it up and re-disburse next month' principle Lee is taking about
OMG, this is a great idea! I'd love to do this!!
Please show us!
20 min in and absolutely love the episode - what a great thing when we get this type of special eps of YNAB stories! Also, categories content is *quality* content 😂🎉
I so appreciate that, and glad you liked my neurotic categories 😂
This has to be my favourite Budget Nerds episode ever! Love seeing how passionate Lee is about YNAB! Given me lots of ideas and I'm already adjusting some of my budget! Thank you!
Aww, this made my day -- thank you!!
fun episode! Loved looking into Lee's budget.
I also wanted to report my YNAB win. My pay was 4 days late due to a glitch with the payroll system. I almost feel guilty saying that it didn't affect me at all, because I know not everyone is as fortunate as me to have found YNAB. It didn't affect me at all because I no longer live paycheck to paycheck. Thank you YNAB!!
same!
i feel SO SEEN by the constant refreshing of the ynab
👀😜
I totally get what he means about furniture- I have two categories that cover things like that. 1. Household items (consumables) 2. Household items (durable goods)
The savings target as the “barometer” of where you want to be - LOVE that!!! Never thought of it that way
This comment about it being a barometer confused me. Definition of barometer: something which reflects changes in circumstances or opinion. So is savings an “in case of job loss” fund? Is a target set according to how many months of expenses you would want that fund to hold? How is it a barometer?
Just as a rising barometer suggests improving weather conditions and a falling barometer indicates potential for worsening weather, consistently failing to meet a savings target each month indicates an imbalance in the budget. In both scenarios, the observed changes signal a need to reassess the current approach or priorities-whether it's preparing for changing weather or adjusting financial habits to ensure that savings goals are met.
This was such an incredible episode!! He’s so charismatic omg. Also my wife and I treat our finances exactly the same! Loved this.
Awwww, thank you so much -- made my day reading this!
Great video. Just came here to say that any life insurance product with « cash value » embedded is essentially just that the insurance company takes part of your premium to invest in some financial assets (e.g. S&P500 ETF) and passes on a tiny tiny fraction of the return back to you. You’re always better off of to just buy a pure life insurance product for a much lower premium and invest the money saved yourself.
Amen, agreed!!
I wanted to say the same thing. Lee mentioned having a policy with a death benefit and cash value, and that sounds like a whole life policy - which is never a good move financially. The Money Guys just did a whole episode on this and why it's a scam. Hoping I just heard that wrong Lee!
@@andrewmitchell571 It's so funny that there are so many opinions on Life Insurance. As I mentioned in the video, this is something that my husband got before we met and I just manage the tiny outflow it requires to keep it going -- I do not personally recommend or not recommend it to anyone. Whether or not this is a wise choice for someone and their situation is highly individualized.
Loved hearing another perspective on the categories! Also, Lee convinced me to move my emojis to the front, some still have more than 1 emoji (because 2 kids ya know), BUT they are in the front and I like it 😂 I also love the positivity in the budget, I made a few tweaks to some names to remove that negativity or bad feeling that was associated with some categories.
Love that!! ☺
same! I changed my boring 'charitable giving' to 'good karma' much more fun!
The enthusiasm in this conversation is inspiring me to look at my own budget!
I was just too excited to be on the show 😂 thanks Jessica!
Thanks for showcasing an increasingly diverse type of budgeter!
I have a Tech category with Phone, computer, projector, mouse, cases, screen covers, cables, external hard drive, tech accessories. I love using the emojis which I learned about from your videos. Even the name of my budget has rainbow, heart and unicorn emojis. Thanks YNAB!
Be cautious with holding on to your income tax and paying it all when you file your return. The IRS will charge a penalty if you don’t pay enough tax during the year through withholding and/or their estimated taxes. 😢
Yes! This is a very good point I forgot to point out! You absolutely can withhold too much and get hit with a fee. Thanks for mentioning this for everyone :)
Disclaimer; nerdy budget nerds comment. I don't know if you've ever done a video on this but you can sort of use YNAB as a personal 3-statement financial model. The Income vs Expense report is ~an Income Statement. The accounts are a Balance Sheet. 'Budget Accounts' are Current Assets and Current Liabilities. I also do pre-paids in YNAB, such as prepaid insurance as an asset and amortizing it over time with scheduled transactions. Tracking accounts are Long Term assets (retirement, house, car) and long term liabilities (car loan, mortgage). You can amortize your car with scheduled transactions if you want, or just manually write down the value by reconciling it to an estimated market value. Then your Net Worth is what a company would have on the balance sheet as owner's equity. If you think of YNAB this way, it starts looking a lot like a tool to develop your direct statement of cash flows.
This is definitely how I use YNAB. It's my complete financial picture!
I like the positive approach to categories - you're reflecting on what you're doing with your life and managing it. That's what budgeting is all about.
Yes exactly! It’s really about life management; budgeting is just the vehicle to get you there
This was awesome!! Loved this video. Lee’s categories are chefs kiss with the simplicity & name alignment ❤😊 I’ve recently simplified but I’m always back & forth too. Do I want detail, do I not? Every time I add more categories for more details, it doesn’t last long. PS, it wouldn’t matter if the video was 3 hours long, I would watch EVERY minute 😂 The longer the better 😆 Love it ❤
When frazzled, I'm going to look at Lee's categories to bring me back to a place of peace! ~Ernie
Awww, this made my day -- thank you! ❤
@@rleebond you’re so welcome ❤️ I’ve watched your video at least 3 times already 😊😍 I love the details and explanation behind how the category works for you & your husband 🎊💕
i love furniture in home maintenance - i do own a home but never knew where to put the nightstand or lamp i bought.... i put it in my "didn't know where to put this" but now i know where to put it! Thank you...
I think you can vague with categories when you have plenty of extra cash. When you’re tight with money, you have to have very specific categories because there is no money to move if you overspend.
This is a very good point! If cashflow tends to be an issue, breaking it out into detail would probably help!
I had a "Groceries" group because I needed to know where hundreds of dollars a month were going specifically because it was my biggest expense when I was low-income. But I kept it across Fresh Starts. If you're good, it also allows you to check the app while you're shopping to see what's a good deal and what isn't. So I have Fruit, Veggies, Cheese, Spices, etc. categories that only include food (I go back and forth on whether Alcohol should be under Groceries or like Entertainment). It does take a while to type up a receipt after putting away groceries but I think it makes it more intentional spending.
I started YNAB over 10 years ago when working as a cashier making less than $10/hr, $20k. Now I'm in tech and making several times that but I still have a groceries broken down. I can't stand having too much money in a single category, there's too much mystery unless maybe they're big, one-time purchases like "Furniture". But I spend over $5000 on groceries per year, that can't just be one big blob.
i wonder if you'll ever have someone on who has two or more budgets for a couple. I have my budget, a budget elsewhere for my husband and our joint budget. We still communicate and have shared goals but we are happy with different budgets and a jointish one.
I’d love to know more about this! It’s so interesting to me how couple budget…everyone does it so differently!
The comment that Lee made about credit card companies warmed my heart. I thought It was just me and George Kamel that thought that way 🤣
Super interesting episode. Lee and I have very different lifestyles (I am not a high earner!) and different approaches to our budgets, but I learned so much that could make my budget even better. Thanks Ben, Ernie and Lee!
You are soooo welcome - glad you enjoyed it! Let me know if you have any questions 😊
@princegolis510 I am not sure I understand your question. I use categories for contribution spending to those accounts (which are transfers out of the budget and inflow in a tracking account). Pre-tax (i.e., 401k, HSA, etc) income is a little more complicated. For those transfers the inflow into the budget will match the outflow transfer to the retirement account. Let me know if this doesn't make sense :)
@@rleebondhow do you pre-fund for the year?
So say if I wanted to try your methods starting in July, I would just could add 1 transaction for my paychecks, fill it for the year and allocate the money until December?
@@abccarroll1 Hi there! So how I budget for the year is still on a monthly target basis...that just builds up to a total goal amount. So in your instance, let's say I want to spend 500 on restaurants a month, if I started the target in July I would put a target date of December and the amount would be 500x6 (since you only have 6 months left of the year) which would be 3,000 total. YNAB will then break that up into a monthly target depending on if you overspent to that target (like if you spent 550 in one month, the next months target would be a little less than 500...make sense?). Let me know if you have any questions, happy to chat here!
@@rleebond ohhh i gotcha! That makes more sense!
I’ve gotta fix up my budget! That makes way more sense!
YNAB - It flips your brain into another dimension.
Great conversation! I consolidated all my utility categories (including phone!) into one with inspiration from this.
❤❤❤! Yes to consolidating!!
Hearing other folks’ financial outlook is so interesting / entertaining- thank you!
Great episode! I’m going to revamp by budget based on these categories. They make do much sense to my situation. Thank you!
Awww, this absolutely made my day, glad I was able to inspire some changes!!
Ernie - trust your temptation... if you have extra cash, and can pay down debt, do it! LOL
We'll see 🤣 ~Ernie
Loved this episode! Inspired me to revamp my budget to simplify a few things
Yesss! This makes me so happy - so glad I could inspire a bit 😊
My word for Stuff category is Incidentals …I’m so glad I’m not the only nerd here!! 😆
You are NOT alone ☺️
OMG! I am an old newbie to YNAB and I have my budget opened as a tab on my computer at work too😅
This was a great episode! Thank you!
@rleebond. Thank you for this! I have been waiting to see how others use YNAB to better track retirement contributions and balances. I have a question about how your yearly budget for retirement tracking works. I understand creating a yearly target for the max contribution limit, but how do you actually handle that in your budget? Are you manually adding the amount that was auto pretaxed taken from your pay check as a split when you see your direct deposit go through? Or do you just add it all as Ready to Assign and then assign that money to the 401k account and then transfer it to your tracking 401k section? I am having an issue with how to move that money because you never actually saw it in your checking account.
Hi Jenny -- I love this topic, and it's one of my favorite things to manage in YNAB. What I prefer to do is create a "dummy" account (which I call "Pre-Tax Tracking") that deals with retirement contributions. For me, it not only helps to keep my checking account clean, it allows me to hide this income in reports if it's in its own separate account. I get paid twice a month, and that's when my retirement contributions also take place -- so for each pay day I have a split transaction that is both the income (which goes into ready-to assign because I want to see that in my reports) and the outflow (which is a transfer to my 401k account that I am also tracking in YNAB) is categorized as you see it in the video. This makes each one of these manual transactions net 0 because the splits cancel each other out. Make sense? Let me know :)
@@rleebond Do you set “Goals” within the budget for these deductions and transfers since they’re distributed from your gross income? Trying to match my budget Goals to Income. I think the gross income is what is listed in the right sidebar.
@@mfharper5 I am not sure I'm understanding you correctly, do you mean "Targets" in my budget? If so, then yes! My checking account handles my net income transactions (as in my work sends money to my checking account) and the "dummy" account I mentioned above handles only my retirement income (i.e., how much of my income is set aside for my 401k pre-tax). That way I can create a Target for the year and track my retirement contributions into my 401k and HSA. If you follow what I said above, you will have inflow into the budget and outflow (the actual transfers into my tracked retirement accounts) in equal amounts. Make sense?
@@rleebond oooooo cool! The dummy account makes sense. I'm going to try this out and see how it feels. I have been using YNAB since 2011 so sometimes I forget to try new things. THANK YOU!
Can you show us how it practically works with the reimbursement category?
I'm struggling with for example medical costs which are sometimes 100% covered and sometimes not.
And more often than not are only reimbursed in the next month.. not always immediately.
I would love to see how you practically deal with that. Or ask Hannah to do it.. Love her.
Hannah is amazing, and unfortunately I can't really "show" you in the comments, but I'll do my best to describe how I just my Reimbursements category. I think it's easiest to just talk you through a hypothetical: Say you are going on a trip with friends, and you graciously offer to book everything (but secretly you just wanted the credit card points ;) and your friends will reimburse you their share at some point in the future. Now, what that looks like in terms of the budget is a ton of travel category "negative" spending in one month and then in the next month a potion of "positive" spending (that is if we both agree that when your friends reimburse you, you're not categorizing that as income -- instead you are putting that inflow into the travel spending category). Instead of doing this, what I do, is split the original cost of the vacation into two categories: 1. travel and 2. reimbursements (which is the amount your friends are going to send back to you eventually). Then when your friends do reimburse you, you categorize that into the reimbursements category. Just note that within your budget, you will still need to cover the full amount (that is, you'll still need to fund your reimbursement category) but you will also be able to move the reimbursements inflow to wherever you want in the budget. Not sure if this makes sense, but happy to have a back-and-forth here :)
Love his enthusiasm! I feel the same way.
Love this episode!!! Great ideas and content
No emojis for me. It's just too distracting. I manage 4 budgets, and there's only 1 emoji, this one: ⭕ which I use to quickly find that particular category which is a holding category for savings that I use to cover some unforseen overspending. Otherwise I use blissfully minimalistic monochromatic budgets.
Same- I hate emoji culture. Use words, people!
I love what you said about taxes! I have a big tax bill every year and thought about increasing my withholdings. I am so doing my own tracking now and will pay at filing time. It is so true that using YNAB is empowering in surprising ways!
So do you have yearly targets for ALL of your categories?? 🤯Might have to give that a go! (Our EF is called Cash Cushion.)
OMG, I called it that for awhile too...too funny! And yes, I do have yearly targets on all my categories: Savings Builder on my "Cash Savings" category with a 12/31 target date and everything else is Needed for Spending with a target date of 12/31. In January I build out a monthly template (based on my general expected monthly cashflow) -- all I do is, in the Target edit field, put the monthly amount I want to contribute to every Needed for Spending category and multiply by 12. This way if you overspend in a month, you'll lose a little for the next month (and so on through the year). And if you underspend it will start to pile up month-over-month (unless you do the "zipping" thing I do which is a little more complicated). Throughout the year I might go back to January and reallocate the template amounts if needed (like if we had unexpected spendings in some categories). Let me know if you have any questions! Good luck!
@@rleebond I have done this on a few categories but it never occurred to me how clean it would be for all of them! 12 years with YNAB and I love when I discover yet another way to shake things up and revamp the budget! I'm trying this for my Jan 2, 2024 (National Introvert's Day 🤓) Budgetapalooza! Thanks!
@@michellebash Hahahaha, I love it! Let me know how it goes!! (Also, I am so jealous of your 12 years of YNAB data, lol!)
I loved this episode as per usual YNAB and@@rleebond! For Lee though, I would love to know more about the "zipping" thing you do. I listened to the episode and did not quite get it, but I am so curious because I share the opinion that it can be hard to track progress and stay accountable at the end of the month. When you zip all the available money at the end of the month and looking at how much cash you had after that month, are you basically redistributing it all in the next month along with any new income? Almost like a "fresh start" every month?
Also: Miniature dachshunds are the best, and yours are adorable!
@@catchafahlingstar I think you have it mostly correct! So, as long as you are using yearly targets on all of your active categories, all I do at the end of the month is move all my available cash from categories (except from CCs) to my Savings Fund category. Then at the beginning of the next month, I redistribute (from the Savings Fund) to fund all my targets, which are all readjusted (i.e., if I overspent the month before, I will now have less in that category, and if I underspent, I will now have more for that category in the next month). It's a great way of pacing your spending and keeping you honest throughout the year. And this way, if you have look back at prior months, you'll know how much cash you ended that month with all in one place/category (soooo much cleaner to me then having random amounts in multiple categories). Sorry for the lengthy response, let me know if you have any questions!!
Fellow Boston-area YNABer 👋🏼
Delightful was the right word for this chat!
I’m so curious about your strategy and how you use targets. Which type do you use and do all your targets have a 12/31 end date?
Also, Ernie and Ben, do you guys share the full category lists somewhere when you do these?
Just the screenshots in the video! ~BenB
@seamickdee For every single active category I put a Needed for Spending target (which is informed by the Venn diagram of spending goals/LY actuals/general averages), with a 12/31 target date. This way it keeps me honest to overspending. Make sense?
@@rleebond yes, makes sense! I may try that out in that christmas to new years time when i nerd out with my budget refresh :)
How do you use targets with a combined category like internet and phone which may have different due dates?
Hey, good question! When you budget yearly (as I do because I have enough of a cash cushion saved up), you start to think about it a little differently. The due dates don't matter as much as planning for the dollar amount does. So when you look at the full year, just make sure you cover these two amounts (plus whatever else you might need in that category for the year) as your target -- this way the due date doesn't matter, as you know you have accounted for it in the total year target. Make sense? -- probably just confused you more hahaha! Happy to have a back and forth here :)
Wow. You guys have me contributing to the chat. That is awesome.
Wife and I also track and budget. She texts me whatever she spends and I input it in YNAB.
Used to only track in excel but now have much more feeling with it. I reconcile 6x a week.
One joint account too. Always have been. We’ll share 50/50 if we ever would need to break up. Doubt that will happen though.
Trust.
Only question I have is.. won’t you end up having 100s of hidden categories after a couple of years?
All the short term goals become hidden after they are fulfilled and now they add up?!
Anyone any insight?
Love this comment!! I personally just delete the short-term goals after they have been fulfilled -- or they become a new spending category. For example, if I am saving up for a boat, I might put a savings balance target on that category and just start stacking up the cash overtime. Then, after I buy the boat, there will be costs associated with that purchase, so I would just integrate those into my normal categories or create new ones. Then the original savings category can either be deleted or morphed into a usable category.
@rleebond How are you budgeting your 401k and HSA as income, but not your whole check with taxes/etc.? Are you just bringing those deposits in separately as income when they hit your accounts?
YESSS! I was waiting for someone to ask this! So, I prefer to have a dummy account on budget that I call "Pre-Tax Transfers". In this account I use a $0 sum split transaction (one split is inflow, the other split is an equal outflow, so the net total is $0) to track Inflow (401k amount + HSA amount) and Outflow (the actual transfers to the respective tracking accounts, which is categorized in Retirement for me on the budget). I like this way because in reports I can show or hide this pre-tax income. It also keeps my checking account transaction clean.
@@rleebond Lee, I apologize for being late to this conversation. Can you explain how you manage the Payee/Category information when you do you $0 split transactions? The outflow I believe I understand (category being retirement with the payee being the tracking account). I am having a hard time wrapping my head around the inflow component. Thank you!
I ❤ using emojis in my budget categories.
What a great episode! Do you have a copy of Lee's categories? They're a great inspiration!
I am happy to send them to you, through YouTub DM or something, but they are also in the video :)
Loved this video!
Thanks the video. Appreciate it. I must have missed it where does Lee place things like health/life insurance and toothpaste?
Hahaha! Life Insurance goes in it’s own category and toothpaste would go in Personal Care 😊
@@rleebond thank you. Which category will you have Life Insurance categorised?
21:21 take a look there, you can see it has its own category :)
@@rleebond thanks heaps. If you had health insurance, where would OR other insurances in general, where would you have placed them?
I would definitely take a look at the video; you’ll be able to see where you’d put those items :)
lol looked it up...DINKWADs
I don’t like emojis/icons BUT I think I’m going to try them out to differentiate Category Groups from Categories.
It's a slippery slope! The weird thing is, I found it harder to select emojis for my category groups than for my categories 🤷♂
And could you remind me @leebond, you changed your mind on emojis and embedded them into your budget, because you found it helped you quickly identify/choose categories when scrolling up and down your budget page? That's an interesting hack, has me thinking what shapes/colours work best to draw the eye, and how this would also help on scrolling the mobile app, which is smaller screen and sometimes feels a bit, 'crammed'?...
I ended up not being able to figure out how to add emojis so I just use special characters.
@@corysnider6851 yep, you got it! But even more importantly, it's when I'm scrolling through that transactions where I find emojis most helpful!
Loved this episode! So helpful!
should one fow income under 35 k
How do you add emojis using Mac?
Control + Command + Space Bar ~Ernie
DINKWAD!!!
great video thanks. can anyone please point me in the direction of the video of another high income earner's category structure. It was a man and he had 1 category for personal spending like jeans and coffee in the same category thanks :)
I'm thinking it was this one with Jeremy Schneider of Personal Finance Club ua-cam.com/video/23ZsOtN9yoY/v-deo.htmlsi=UAG8_iEvw27Zj7gL ~Ernie
Interesting that you pay as little in taxes as possible, and then wait until you prepare your return to pay it. This seems like it would often mean you're owing penalties. Why wouldn't you want to avoid those penalties? Or, as you said you just started doing your own taxes, so perhaps you don't realize there are penalties? Anyway, just a curiosity. I definitely don't like to give the government an interest free loan, but I also don't want to pay them interest.
Thanks for responding! I should have been clearer...I pay as little withholding possible WITHOUT fees incurring. If you didn't pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller.
it's called "DINKWAD" and I hate that word lol
It sounds even meaner than DINK. 🤣 ~BenB
Woof. Saying insurance is a cash account. It's a loan you have to pay back. Avoid. Buy term and invest the difference in the s&p
Totally agree… but there still is a life insurance aspect to the policy. But it’s all just smoke and mirrors a bit
He lost me at “I love Excel”
Yeah, nerd alert 🤓😂
@@rleebond oh I’m a nerd. Real nerds don’t use Excel. They use Jupyter and cloud functions. Excel is a tool that all real nerds wish would die because it causes security problems, creates something called data islands, and selfishly stores institutional knowledge on someone’s computer instead of taking time to build an actual application that many people can leverage.
@@devinhedge well I always have a lot to learn. I just like it for basic math/forecasting and scratch-sheeting
HINJ, DINK, DINKWAD, YUPPIE, FIRE
How does Reimbursements actually work?
Jan - budget $1,000 (comes out of cash flow) [category is $1,000 - available to spend]
Feb - spend $1,000 [category is $0]
Jun - Reimbursed $1,000 [Reimbursements category is now $1,000 available to spend with $0 budgeted]
How do you zero it?
It sounds like the original $1k in January was your own money so now you can move that $1k from June to another category(ies). Or leave it there for the next round of reimbursements. ~Ernie
Yep! Just redistribute the 1,000 to another category or to Ready to be Assigned. When you do this, despite it being across several months, you’ll still net out to 0 (minus 1k and plus 1k). This helps me clean up reports since I can just exclude this category for the reporting view. Hope that makes sense!
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