When I first started, I had~10 360 Savings Accounts for things like a trip, car down payment, etc. and it was so freeing to be able to consolidate all of those, and set up savings Categories in YNAB. Then setting goals for each category - game changer.
I've just had an Aha! moment at 8:34 For a long time I've used my credit card for pretty much all purchases and paid it off in full every month, doing this really only to build a good credit score. I've just started using YNAB and for this first month I was quite shocked into feeling like I don't have as much money as I thought I should, I just about covered the essentials and put some towards true expenses but really fell short from what I thought I should have been able to cover. I earn an above average salary and live very frugally already so it was confusing and to be honest a little bit scary to think somehow I wasn't in a good position financially. My Aha! moment is realising that this month is tight because not only am I paying off my credit card spending I did last month, I'm also allocating funds for this month in advance of needing to make that credit card payment. In a way I'm using one pay check to cover two months by paying off last month and also having money ready to make that payment next month. With the credit card repayment for this month already covered, the whole of my next pay check will be available to be budgeted next month!
Super interesting realization! I may be wrong, but it sounds like you may be partially on what we call the Credit Card Float. Search that up and you'll see a bunch of resources on it. Here's a good place to start: docs.youneedabudget.com/article/1452-the-credit-card-float ~BenB
YNAB has made me think about my budget completely differently and seriously my mind is blown! I wish I would have found it years ago!!!! Thank you YNAB! I finally feel some relief and more in control of my $$$.
@@lavs23 I wanted to buy a house, and found I had zero credit after going cold turkey on credit cards for many years. I was finally convinced that as long as I could pay the balance in full each month, CCs could be convenient, give me points for free stuff, AND help build my credit. It all hinged on YNAB keeping me honest.
@@hmspain52 Yeah we've already got a house. We've had credit cards before and cut them up once we decided to get intentional about paying off debt. We just got student loans paid off so now our only debt is the mortgage. I wonder what effect that will have on my credit score, I had a high score but I'm not planning on car loans going forward and am actively investing to ensure that. (Only driving 2.5K miles a year makes it easier) The only thing would be if we moved houses. We don't have any desires to that currently, it would be a job loss situation.
@@lavs23 I would argue that getting CCs under control is not so much about cutting them up any more than going on a diet means sewing your lips shut LOL. Once you are on board with YNAB, you spend only the dollars you HAVE, and that includes CC use. As long as you spend dollars you have, and YNAB transfers those dollars from categories to your CC account, you should be OK using CCs. With YNAB watching your back, you can have the convenience of using a CC, get the points, AND build up your credit score in case it becomes an issue down the line.
Once you're in a good rhythm with YNAB and credit cards you can further improve your credit score by focusing on your credit card utilization. Because you can confidently make a payment at any time during the month with the funds available in your CC category in YNAB, you can make off cycle payments to make sure your credit card utilization stays at a level that the credit companies consider great (b/c even if you pay your CC off entirely every month if your credit is reported and your "balance" is high when compared to your credit limit you'll get dinged by the credit companies). YNAB puts you in control.
I stop YNAB three times before I finally stick to it! It took me 4 years to catch the philosophy. In between, I try many methods, apps etc.... but it really clicked when I looked at Nick True and his wife Hannah videos.
I'm super late to this video, but I had the exact oposite experience with YNAB. I had tried many other tools and none of them made sense for me. Intellectually they did, but because of all the extra work to really keep them accurate they just never worked so I assumed budgeting wasn't for me. THen I found YNAB and my aha moment happened with the very first blog post I read about the four rules. I hadn't even started using the tool and I knew from jump it was the right tool and mindset for me. I fell right into all of it from the very beginning and had no real need for an aha moment because it was super intuative for me. So interesting how everyone learns things in different ways.
I am so intrigued by YNAB! It seems to be a slightly more exact way of doing what my husband and I have called intuitive budgeting for over two decades. We started out with nothing and no one (except student debt) and by being naturally frugal, inclined toward investing in the future and high earners in our twenties and thirties, we paid off our first home at age 29 - after 3.5 years - bought another property outright, have a 15 yr mortgage on our current home, max investment contributions, have a fully funded college account for our oldest kiddo (he is 9 yrs), buy new cars in cash and live comfortably off one income so mom can homeschool two of our three kids (they both have disabilities). We always pay off our credit cards and never run a monthly deficit. We have budget line items but we adhere to them dynamically. I think we just have a rich mental model of our finances and it helps that we are allergic to shopping. We live a great life in a really nice neighborhood. But I gotta keep that $500/every five years that YNAB would cost me to fund my toddler’s disability trust! I still love this podcast so much though.
Spending from categories instead of looking at account balances and credit cards for me. Actually having the bank pay me through cash back and points instead of me paying them in interest and fees is such a great feeling.
I had used YNAB free trial so many times. I wanted to like it cause I like the idea of budgeting what you have but could never wrap my head around it. It really clicked for me when I completely customized the budget categories to work for me. And I can’t even imagine going back to the old way of budgeting.
Win aha moment: I'm new to. YNAB my daughter came to me and said she needed $13 dollars for her drama shirt. I felt my blood boil and said ask your father. But then I looked at my YNAB account and noticed I had $25 in the school activities fund. Since I'm just starting I didn't think I had anything in it. Relaxation came over me and said yes, YNAB is my best friend now. I was able to get her the $13 dollars without having to pull from the other accounts.
I just earlier this week learned I could type at top of checking account “uncleared” and it pulls all my uncleared expenses! What a relief to not have to scroll and scroll and scroll to find them.
Having control over my Age of Money really hit home how secure we can actually be. Love the average budgeted feature because it helped to reduce the vagueness of True Expenses.
One thing I want to point out is that if you make a lot of online purchases, credit cards have much more consumer protections in place than if you use a debit card. Credit cards are much more secure if you're worried about fraud and identity theft. That's one reason we pay for most things with a credit card. That and all the Amazon points. My most recent aha moment was weeks ago, when Jesse said in a podcast to cover overspending *before* you spend the money. Figure out where the money is going to come from and exactly what you're sacrificing to buy the thing you want. It's really helped me be more mindful of my spending.
YNAB originally seemed so counter intuitive compared to forecasting methods. I tried to make those methods work for so long and I never broke the paycheck to paycheck cycle. When I revisited YNAB it just made so much more sense than anything I've tried before!
I still have several extra savings accounts. I need to get rid of at least one, but I’m nervous about canceling the “property tax” savings account. I don’t need it anymore, but it’s a security blanket against not having the money come October . It’s a pain making sure the budget category “property tax” matches the savings account. I transfer money every 2 weeks, so months with 3 paychecks really mess me up 😂.
Joan, maybe try what I’m doing. Under the “True Expenses” category, I have all the buckets for what is essentially my savings account. For example, I have “Auto Tag (Jan)” for my license plate registration fee, due in January. I have “Roaring Springs Season Passes (May)” and “Property Tax (Dec)”. I also have my “Emergency Fund” in it, which has no date. It’s merely a $1k cash pile available to use instead of a credit card. Basically, the entire “True Expenses” category IS my savings account, broken down. Each item is labeled with the month it is due and has a savings goal inside each bucket. This way, I know how much I need to have in it every month to make my goal regardless of how many times I’m paid each month. I just make sure that at the end of the month, the “True Expenses” category is what my savings account balance is. On the last day of the month, I look at the balance of True Expenses in YNAB, subtract the current balance of my savings account, then do a manual transfer of the difference into savings. Advantages? I only do one savings transfer a month, only have one reconciliation to do each month, and if it’s an interest bearing account I get a little perk. I do NOT use those categories to shift money around, though. I have a “Miscellaneous Expenses” that I keep at $100 by the end of the month as well that I use for shifting money around to keep me sane, but i don’t consider that money to be from my savings account; it’s in my checking account. Hope that helps. 😉
Once you learn the dividing up a single account with multiple categories it was game changing to me. Looking at categories instead of my account balance is incredible and much more in control. No more shuffling money around, I was down to one account but have recently opened up a savings account to store just my emergency fund.
Of course the main aha moment for me was working off the budget and not the money in my accounts. The other was being able to use credit cards to your advantage. Get good use of the rewards because whatever you charge is already accounted for in your budget. Ex. I use one CC for gas and earn cashback and it in my transportation category.
When did you start using the app? Generally I’ve found that it can take several months for your accurate AOM to show. This is because YNAB doesn’t look at which month your money is budgeted, but more so when it came in and when it actually goes out. And if you’ve just started the app, it thinks that all your money is new. I’ve been using the app since December and I had the same issue. In December, my AOM was 9 days, Jan became 33 days and Feb was 42. The longer you use the app, the more accurate your AOM will be. Hope this helps! Good luck!
Please discuss the lack of walls in YNAB. Just as you like putting money into a category, and have it STAY there, you want to put money into future months, and have it STAY there!
Lack of walls? If you spend more money than is allocated in a category, it has to take it from somewhere else, that is simple math. And it makes the most sense to use dollars allocated in the furthest future to cover that overspending. Super easy.
@@kukurukuru04 You can solve the "wall" problem by simply NOT budgeting into the future, but for those that like to budget dollars into future months, I would like YNAB to respect the decision and NOT cover over spending with those dollars. Turn the category red, and require that you cover that spending from other categories just like you do if you don't budget future dollars.
Hrmm....I guess I'm half forecasting and half budgeting only what I have. Every paycheck I fill each category halfway. But it does mean I only have X$ for 2 weeks for groceries. Which seems "right". But I fund half my rent with every check because I know I have at least 2 paychecks a month so I know I'll get the other half before I need it. Oh yeah. The credit card rewards game is fun for me. And every time I have rewards to spend, I force myself to use it for "guilt-free" spending. I played the game. That money is ALL fun!
Spending from your categories, and NOT from your bank balance. Took some getting used to! :-)
I put the YNAB app on the front page of my phone and the bank app on a back page before I got it!
Love watching budget nerds!!! Would love to see an episode with your wives’ perspectives.
When I first started, I had~10 360 Savings Accounts for things like a trip, car down payment, etc. and it was so freeing to be able to consolidate all of those, and set up savings Categories in YNAB. Then setting goals for each category - game changer.
I'm going through the same experience.
I've just had an Aha! moment at 8:34
For a long time I've used my credit card for pretty much all purchases and paid it off in full every month, doing this really only to build a good credit score. I've just started using YNAB and for this first month I was quite shocked into feeling like I don't have as much money as I thought I should, I just about covered the essentials and put some towards true expenses but really fell short from what I thought I should have been able to cover. I earn an above average salary and live very frugally already so it was confusing and to be honest a little bit scary to think somehow I wasn't in a good position financially.
My Aha! moment is realising that this month is tight because not only am I paying off my credit card spending I did last month, I'm also allocating funds for this month in advance of needing to make that credit card payment. In a way I'm using one pay check to cover two months by paying off last month and also having money ready to make that payment next month. With the credit card repayment for this month already covered, the whole of my next pay check will be available to be budgeted next month!
Super interesting realization! I may be wrong, but it sounds like you may be partially on what we call the Credit Card Float. Search that up and you'll see a bunch of resources on it. Here's a good place to start:
docs.youneedabudget.com/article/1452-the-credit-card-float
~BenB
YNAB has made me think about my budget completely differently and seriously my mind is blown! I wish I would have found it years ago!!!! Thank you YNAB! I finally feel some relief and more in control of my $$$.
I was in the camp of "credit cards are from the Devil!". With YNAB, you can safely use credit cards for all the benefits, and avoid all the pitfalls.
I'm in that same camp currently but Imt considering getting a credit card again after not having one for a few years.
@@lavs23 I wanted to buy a house, and found I had zero credit after going cold turkey on credit cards for many years. I was finally convinced that as long as I could pay the balance in full each month, CCs could be convenient, give me points for free stuff, AND help build my credit. It all hinged on YNAB keeping me honest.
@@hmspain52 Yeah we've already got a house. We've had credit cards before and cut them up once we decided to get intentional about paying off debt. We just got student loans paid off so now our only debt is the mortgage. I wonder what effect that will have on my credit score, I had a high score but I'm not planning on car loans going forward and am actively investing to ensure that. (Only driving 2.5K miles a year makes it easier) The only thing would be if we moved houses. We don't have any desires to that currently, it would be a job loss situation.
@@lavs23 I would argue that getting CCs under control is not so much about cutting them up any more than going on a diet means sewing your lips shut LOL. Once you are on board with YNAB, you spend only the dollars you HAVE, and that includes CC use. As long as you spend dollars you have, and YNAB transfers those dollars from categories to your CC account, you should be OK using CCs. With YNAB watching your back, you can have the convenience of using a CC, get the points, AND build up your credit score in case it becomes an issue down the line.
Once you're in a good rhythm with YNAB and credit cards you can further improve your credit score by focusing on your credit card utilization. Because you can confidently make a payment at any time during the month with the funds available in your CC category in YNAB, you can make off cycle payments to make sure your credit card utilization stays at a level that the credit companies consider great (b/c even if you pay your CC off entirely every month if your credit is reported and your "balance" is high when compared to your credit limit you'll get dinged by the credit companies). YNAB puts you in control.
I stop YNAB three times before I finally stick to it! It took me 4 years to catch the philosophy. In between, I try many methods, apps etc.... but it really clicked when I looked at Nick True and his wife Hannah videos.
I'm super late to this video, but I had the exact oposite experience with YNAB. I had tried many other tools and none of them made sense for me. Intellectually they did, but because of all the extra work to really keep them accurate they just never worked so I assumed budgeting wasn't for me. THen I found YNAB and my aha moment happened with the very first blog post I read about the four rules. I hadn't even started using the tool and I knew from jump it was the right tool and mindset for me. I fell right into all of it from the very beginning and had no real need for an aha moment because it was super intuative for me. So interesting how everyone learns things in different ways.
I am so intrigued by YNAB! It seems to be a slightly more exact way of doing what my husband and I have called intuitive budgeting for over two decades. We started out with nothing and no one (except student debt) and by being naturally frugal, inclined toward investing in the future and high earners in our twenties and thirties, we paid off our first home at age 29 - after 3.5 years - bought another property outright, have a 15 yr mortgage on our current home, max investment contributions, have a fully funded college account for our oldest kiddo (he is 9 yrs), buy new cars in cash and live comfortably off one income so mom can homeschool two of our three kids (they both have disabilities). We always pay off our credit cards and never run a monthly deficit. We have budget line items but we adhere to them dynamically. I think we just have a rich mental model of our finances and it helps that we are allergic to shopping. We live a great life in a really nice neighborhood. But I gotta keep that $500/every five years that YNAB would cost me to fund my toddler’s disability trust! I still love this podcast so much though.
Spending from categories instead of looking at account balances and credit cards for me. Actually having the bank pay me through cash back and points instead of me paying them in interest and fees is such a great feeling.
I remember being so excited to find YNAB, it was how I wanted to budget I even broke out my food by each week of the month.
I had used YNAB free trial so many times. I wanted to like it cause I like the idea of budgeting what you have but could never wrap my head around it. It really clicked for me when I completely customized the budget categories to work for me. And I can’t even imagine going back to the old way of budgeting.
Win aha moment: I'm new to. YNAB my daughter came to me and said she needed $13 dollars for her drama shirt. I felt my blood boil and said ask your father. But then I looked at my YNAB account and noticed I had $25 in the school activities fund. Since I'm just starting I didn't think I had anything in it. Relaxation came over me and said yes, YNAB is my best friend now. I was able to get her the $13 dollars without having to pull from the other accounts.
Relaxation during a spending decision?!! Yes, please! ~Ernie
The ability to confidently spend was a game changer not having to wait for purchases to clear to see how much money im left with
I just earlier this week learned I could type at top of checking account “uncleared” and it pulls all my uncleared expenses! What a relief to not have to scroll and scroll and scroll to find them.
Having control over my Age of Money really hit home how secure we can actually be. Love the average budgeted feature because it helped to reduce the vagueness of True Expenses.
Unexpected expenses are not really unexpected... it's called denial (not the river) :-).
One thing I want to point out is that if you make a lot of online purchases, credit cards have much more consumer protections in place than if you use a debit card. Credit cards are much more secure if you're worried about fraud and identity theft. That's one reason we pay for most things with a credit card. That and all the Amazon points.
My most recent aha moment was weeks ago, when Jesse said in a podcast to cover overspending *before* you spend the money. Figure out where the money is going to come from and exactly what you're sacrificing to buy the thing you want. It's really helped me be more mindful of my spending.
YNAB originally seemed so counter intuitive compared to forecasting methods. I tried to make those methods work for so long and I never broke the paycheck to paycheck cycle. When I revisited YNAB it just made so much more sense than anything I've tried before!
Right?! It's so *not* what we were taught to do with our money. But it sure works, and there's a reason it does!!
-Hannah 🌻
I still have several extra savings accounts. I need to get rid of at least one, but I’m nervous about canceling the “property tax” savings account. I don’t need it anymore, but it’s a security blanket against not having the money come October . It’s a pain making sure the budget category “property tax” matches the savings account. I transfer money every 2 weeks, so months with 3 paychecks really mess me up 😂.
Joan, maybe try what I’m doing.
Under the “True Expenses” category, I have all the buckets for what is essentially my savings account.
For example, I have “Auto Tag (Jan)” for my license plate registration fee, due in January. I have “Roaring Springs Season Passes (May)” and “Property Tax (Dec)”. I also have my “Emergency Fund” in it, which has no date. It’s merely a $1k cash pile available to use instead of a credit card.
Basically, the entire “True Expenses” category IS my savings account, broken down. Each item is labeled with the month it is due and has a savings goal inside each bucket. This way, I know how much I need to have in it every month to make my goal regardless of how many times I’m paid each month.
I just make sure that at the end of the month, the “True Expenses” category is what my savings account balance is. On the last day of the month, I look at the balance of True Expenses in YNAB, subtract the current balance of my savings account, then do a manual transfer of the difference into savings.
Advantages? I only do one savings transfer a month, only have one reconciliation to do each month, and if it’s an interest bearing account I get a little perk.
I do NOT use those categories to shift money around, though. I have a “Miscellaneous Expenses” that I keep at $100 by the end of the month as well that I use for shifting money around to keep me sane, but i don’t consider that money to be from my savings account; it’s in my checking account.
Hope that helps. 😉
I had several aha moments after watching the full UA-cam playlist of how-to videos :)
Man, Ernie is so cool 😄
Once you learn the dividing up a single account with multiple categories it was game changing to me. Looking at categories instead of my account balance is incredible and much more in control. No more shuffling money around, I was down to one account but have recently opened up a savings account to store just my emergency fund.
Of course the main aha moment for me was working off the budget and not the money in my accounts.
The other was being able to use credit cards to your advantage. Get good use of the rewards because whatever you charge is already accounted for in your budget. Ex. I use one CC for gas and earn cashback and it in my transportation category.
Thanks a lot...NOT! AHHA...Playing in my head on repeat...🙄🎶🎶🎶🎶🎶🎶🎶🎶🎶🎶🎶🎶🎶
I have $ budgeted into April, but my age of $ is 12 days. I haven't had the a-ha moment for age of money yet. I still don't get it.
When did you start using the app? Generally I’ve found that it can take several months for your accurate AOM to show. This is because YNAB doesn’t look at which month your money is budgeted, but more so when it came in and when it actually goes out. And if you’ve just started the app, it thinks that all your money is new. I’ve been using the app since December and I had the same issue. In December, my AOM was 9 days, Jan became 33 days and Feb was 42. The longer you use the app, the more accurate your AOM will be.
Hope this helps! Good luck!
Please discuss the lack of walls in YNAB. Just as you like putting money into a category, and have it STAY there, you want to put money into future months, and have it STAY there!
Lack of walls? If you spend more money than is allocated in a category, it has to take it from somewhere else, that is simple math. And it makes the most sense to use dollars allocated in the furthest future to cover that overspending. Super easy.
@@kukurukuru04 OF course, but *I* want to make that decision not YNAB. Don't steal from Peter to pay Paul and call it a favor.
@@hmspain52 then move the money before overspending
@@kukurukuru04 You can solve the "wall" problem by simply NOT budgeting into the future, but for those that like to budget dollars into future months, I would like YNAB to respect the decision and NOT cover over spending with those dollars. Turn the category red, and require that you cover that spending from other categories just like you do if you don't budget future dollars.
I don't see any problem in that it will just carry over for next month.
Hrmm....I guess I'm half forecasting and half budgeting only what I have. Every paycheck I fill each category halfway. But it does mean I only have X$ for 2 weeks for groceries. Which seems "right". But I fund half my rent with every check because I know I have at least 2 paychecks a month so I know I'll get the other half before I need it.
Oh yeah. The credit card rewards game is fun for me. And every time I have rewards to spend, I force myself to use it for "guilt-free" spending. I played the game. That money is ALL fun!