Thanks to YNAB I just had the most fun vacation I’ve ever had because I had a ton of green soldiers (dollars) ready to fight the vacation battle and that was all it was for. I felt zero guilt spending every dollar I had budgeted, no worries about trade offs or if I could afford it. I went ham on tipping and somehow came home with money left in that category. Budgeting increases the fun!
I spent three years pissed at y'all trying to use YNAB my way. You know my way that got me into the debt that I'm in and not a penny in the bank to show for it? Once I stopped and surrendered to the YNAB way, everything changed, including my relationship with money. We now make less than we've ever made and not only are we making it but we're making headway on our debt at the same time and I am just absolutely blown away that this is even possible right now. My husband has seen the improvements and now we're that cute couple that texts each other about budget things. Thank you for believing in yourselves so that you could help us believe in ourselves.
YNAB and this method of budgeting has utterly changed my relationship with my money. So so helpful. I'd 'budgeted' before, but was really just putting some money here and there. The scarcity thing is what really makes it work for me. It helps me decide what to put money toward, but it also helps me leave it there for that purpose OR make a conscious decision to use it for something else.
It essentially because this system creates mental “friction” before you spend. Other budget concepts essentially track your spending after the fact and that’s why it didn’t really work for me.
This budgeting method had been a blessing. My husband and I have paid off 85% of our debt and saved more than we've ever saved before. We will be paying off our mortgage 10 years early. WE LOVE THIS METHOD!!
Zero based budgeting was probably the most difficult hurdle for me to get over to "trust" my budget. Before when I was just tracking my spending, I'd always want to leave some cushion to make sure I could cover unexpected expenses. But between my "stuff I forgot to budget for" and "emergency fund" categories and budgeting into the future, I'm starting to trust that I've got things well-covered and that I can budget to zero and still be able to handle any unexpected surprises. Also just the longer I budget, the fewer things catch me off guard -- I'm ready with the true expenses categories!
YNAB has been truly life changing for me. I was always SO frustrated because I’m like ‘how the heck are other people managing their money and knowing what they have to spend???’ I would look at my bank balance and that told me nothing so I just gave up. But now YNAB has made me really understand scarcity, and also tradeoffs (hello economics! I minored in economics but you would never know looking at my previous finances 😂) it has given me clarity and understanding. Now I look at my YNAB budget and think (ok if I buy whiteclaw, then I will have less for my vacation fund lol) I never had a plan for my money, and YNAB has now made me free to actually plan my life and what is important to me. Thanks so much. I am letting my budget nerd flag fly! 🤓 I love these videos you guys are doing the lord’s work!
Before I encounter YNAB method, I used to transfer 10% of my income to my savings account, call it a day and be happy because I save money for my future. until the end of the year where I will be so confused of why I only have so little money in it. Turns out I was spending that money for Christmas holiday (flight tickets etc) and other big ticket purchase that I never realized how much I actually need for those. YNAB taught me to be intentional with my savings and really plan for them. For the last two years I still spent a lot for Christmas but minus the guilty feeling because I was also able to hit my other saving and investing goals 😁
Another perspective: my age of money is 84 days. That means that I could move money from August to pay for an expense today. Because I'll continue to follow the 4 rules of YNAB, my age of money will take a small hit and then keep climbing. Don't forget the power of no longer living paycheck to paycheck. YNAB works.
I started zero based budgeting from the beginning, when I was 16 and got my first bank account. I had a notebook with 4 categories: Clothing, Gas, Food, and Fun. Now at age 20 in YNAB I have something close to 40 categories 😂 much more fun this way and much easier than keeping track of a little notebook!
If I did income vs spending limits I would be in BIG trouble. Our YNAB budget has 15-20 categories that we are tracking that rarely get funded currently. The challenge - too much debt still. We were looking to be "done with debt" before Thanksgiving but an emergency dental visit (a full series) went well past what we had as a buffer in the purely "Medical" category. Rolling with the punches is a little bit of our lifestyle but that is ok. We have patience. What matters is everything important is covered and almost to a 45 day AOM now and when we need to roll with punches we can very easily do that. I always forecasted before YNAB. Even when I started YNAB my mindset was forecasting. Once Zero Based budgeting clicked I've not looked back and have dumped all my spreadsheets.
Yeah, the biggest problem with the old “Excel” spreadsheet was that it wasn’t a “living/breathing” budget. Also, looking back, we would “sandbag” certain line items knowing we had one budget meeting for the month (paid once a month at the time) and wouldn’t get back to the budget until 1st of next month. YNAB is infinitely better…a complete, fun to use system. Don’t be sad Microsoft, I still love /use Excel…just not for my budget!
I’ve had a zero based budget for years but never like this!!! I was a forecaster and always was month to month. YNAB has literally changed my way of thinking about my budget and my available funds! I’m addicted!
Having a zero based budget, allows me to actually spend my fun money without guilt. Before I started budgeting, I would always feel guilty about doing fun things, because what if I needed that money for something important. Having a zero based budget allows me to prove to myself that all of the important things are taken care of, and it is ok to spend this money without guilt.
I have a savings category with sub categories. My Prudent reserve gets 10% of every dollar coming in and I don't touch that except for emergencies. I build in sub categories for emergency prevention. Fyi my phone broke. Now I have a savings sub category for phone replacement every two years. When I have a windfall (unexpected income) it's split. 1/3 to future- savings: 1/3 to present- self care; 1/4 to the past (debt). It leaves me feeling prosperous rather than being on a starvation money diet. In 3 years my car is close to being paid. My other two debts are greatly reduced and I had fun too.
I was definitely aware of zero-based and envelope budgeting, but I'm not great at creating spreadsheets and then physically using envelopes only worked to a certain point. So it was using the actual software that got me from forecasting to actually budgeting what I have, and it has had such a positive impact on my finances and peace of mind. I was always able to avoid catastrophe before, but now I'm actually building something.
I tried zero based budgeting with a spreadsheet and Quicken and just never felt like I had a good handle on things. When I found ynab it was like everything clicked into place. The combination of zero based budgeting with the digital envelope system has been a real life changer. It helped us get out of debt, get a month ahead, and save an emergency fund. We're still amazed that we don't have to use credit cards for unexpected things. We just roll with the punches.
It's confusing for me too and I'm new at it as well, guess the mindset change is the real challenge here : i guess my new one is : all your essential categories are fund, breathe you. Are okey and you will make it to the end of the month alive 😉
Before YNAB I budgeted in excel spreadsheets that was intentionally NOT zero-based. I knew what zero-based budgeting was, and intentionally did not want to have to work that much at my budget. I developed a system where I would first separate money for monthly and non-monthly (what YNAB calls "true expenses") expenses into a separate bank account, so my bills were always paid. Everything else was placed into a "money pile" I called it. My wife and I would subtract money from the money pile everytime we spent something. The money pile would be refilled every paycheck (after expenses), and my wife and I developed a feel for how quickly/slowly the money pile was draining. Money pile almost empty, and payday is 2 days away? Ramen it is! It was kind of like living paycheck-to-paycheck except all of my expenses were always paid first. Honestly, I didn't really hate this method of budgeting. I only switched to YNAB because I make significantly more money now, and I feel more responsibility to know where my money is going. But I still miss the simplicity of the money pile sometimes...
I love two nerds. I only started ynab for three days starting this first of the month and the "scarcity" you're talking about really kicked in when I give every dollar a job. I feel like I don't feel like as much a looser for not buying that pair of shoes because what more important is the electric bill. I KNOW when my priorities are taken care of I really won't feel bad or stressed about finally getting the shoes. Ynab is awesome. BTW does anyone have a coupon or code for when I start my subscription in 31 days?
My husband and I are long time YNABers. Before YNAB we wrote expenses down and paid extra on debts and got out of debt except for the mortgage. After that we spent every dollar. After YNAB we realized where the extra dollars were going by giving every dollar a job. Game changer! We were able to pay off the mortgage! We still use YNAB and every dollar still has a job. However we have always been forecasters. We reconcile the budget at the end of each month to make sure we have every expenditure accounted for. We set the month ahead and run our lives off of YNAB. If we had to meet more than once a month I don’t think we would’ve stuck to it. We have ad hoc meetings if need be.
Now when an expenditure comes in at more than anticipated I kick myself for not anticipating. This month it was auto maintenance! Hate pulling money from the emergency fund that I feel like I should have anticipated.
It’s a learning experience I am finding … we learn to add more dollars ( pounds in my case) into that category to future proof for next time. I am new to YNAB but I enjoying tweaking the budget to work for me and rolling with the punches . All the best
I tried a lot of apps before ynab... of course it didn't work, at the end of the month I would look at my "budget" and shout "I spent HOW MUCH eating out"!?!?! The 4 rules of ynab completely changed my understanding of personal finances and for that I am eternally grateful... my only regret is that I didn't try ynab sooner (I already knew about it, but i was a bit scared of its "cult-like followers" 😁😁😁 according to reviews) well, look at me now, commenting passionately under a budget nerds episode 😁 the cult got me 🥰
Otherwise the abuser I would like to ask for clarification about emergency fund do I include that in my budget if I already have my emergency fund fully funded?
It’s money you need to account for, so yes, I have a category called Emergency Fund and I keep it funded to a minimum level. My checking and savings are both places for money, and I give them all a job, including an emergency fund. I also assigned my savings to include all my “true expenses” items (Auto Tag, YNAB subscription, park season passes, gift fund). Basically, at the end of the month, I make sure my savings account balance matches my True Expenses category. Works for me.
@@robhulson I have gotten into a very bad state of confusion in the past to the point I don’t trust MYSELF how to use ynab in regards to reconciling. If I need to transfer $ from savings and/or emergency fund….it seems like ynab gets mixed up (or I do) In the technical understanding of how ynab works. I have restarted my budget so many times. There’s just something I’m not getting. Maybe it’s from the very beginning (in setting up the budget) of the amount of my money I have entered to be budgeted. Also, it may help to inform my emergency fund is at in a bank account. So, how do I address this when the transactions “automatically’ load to my budget awaiting my approval? Sorry for the long text. I just want to get this right finally 😩
@@beckyenyart8260 in that case you create a cash account in ynab an put the whole amount into your emergency fund category. never touch the category unless you have to dip into the emergency fund or add money to it, in which you will create a transfer transaction from your checking to the cash account.. 🤔 does that make sense? I'm sorry if I just add to your confusion. 😅
question: I know some day I'll need to replace my dishwasher... and I want to have at least $1k set aside for unexpected medical bills... and some for car repairs... how do you (or anyone reading) set money aside for these things? Do you have multiple categories? Or do you say, "this is the one category to absorb these types of things" ? I ask, because I have multiple categories for these things, but I'm afraid I have too many categories, so I'm just spreading out my savings goals so that it takes too long for any one to fill up, so if I have one of these emergencies I'm going to just have to borrow from another category to pay for them anyway.
for me, I have multiple savings goals, but I'll choose one to fully fund before moving onto the next so that I can focus and remember what I'm saving for. Kind of like snowball debt payments, but for savings? For example, I want to save for an emergency fund and a new laptop. I decided to focus on the emergency fund first and once that was fully funded, I'm now putting money away for a new laptop. Also, I think many of these things (medical expenses, car maintenance/repairs, new laptop) fall under what YNAB calls "True expenses (you're more than likely going to have to pay for them eventually!), which they recommend having different categories for those things.
Keep the categories and let yourself live in the tension of not always being able to fund them fully. Why? Because that gives you clarity - the reality of your situation is that you don't (right now) have enough income to fund all the things you need and/or want. When the time comes to make a big purchase, you're right that it may require pulling money from other funds, which will set you back in some areas. Rolling with the punches is good, but it only works well if you're honest about all of the things in your life that pop up as "surprise" expenses but are actually ones that should be expected and budgeted for. Stick with it, and I bet you'll find more and more money winds up in those categories - it's amazing what clarity can do for your financial priorities!
@@rojasch I hear what you're saying... I just don't see creating a "new roof" category just because some day I will need a new roof, because it might never get fully funded... I'm wondering if I said "unplanned medical expenses, car repairs, new furnace, new roof, all fall under 'emergencies'" with a goal of something above the highest potential expense, maybe that's better for the cognitive load on my brain? Of course I'm probably way over thinking it, which is why I'm looking for opinions
@@jazzam0razz oo, I do like the "snowball savings" idea... I'll have to think on this more, but I see a lot of sense in prioritizing which to fill first then roll on to the next one... that could do a lot to solve my anxiety over spreading the contributions across all the categories too thin to be effective.. it's so simple yet it wasn't obvious to me!
@@smstnitc I understand the temptation to do this, but none of those things are actually emergencies. They're all things that WILL happen sooner or later, and they could even happen one after the other or at the same time. It's much better to feel (and be motivated by) the actual scarcity of your budget than to feel artificially secure with a fully-funded "emergency" fund that is only enough to cover one or two real expenses. All that said, there's lots of flexibility in how granular you need to get in your categories. I have a Replacement group with a line item for each major item, each with a goal set. That way it's easy to add another thing when it occurs to me ("Oh! Mattresses are expensive and need to be replaced periodically. I guess I need to budget for that, too.") But you could treat this all as a single line item, as long as you're honest about how much you really need to budget for all those predictable expenses. It's ok to acknowledge you don't have enough money for all the stuff that needs to happen in the next X years. That realistic perspective is what empowers you to make informed choices about your finances. But it certainly is a major shift from how most people approach "emergencies" like a broken fridge!
Ok, I have a huge question. I have been budgeting based on my projected monthly income and account for every dollar, so I end up with zero. But, I understand now that this is "projecting". So where does the money come from to truly start a budget that is not based on projected income?
I think this is why YNAB wants you to get a month ahead. We're a month ahead, so when we go to budget for June, were only using money we made in May, so we're no longer projecting based on expected income. Any money made in June then waits until July to get budgeted, etc. In the meantime, if you aren't a month ahead, I would imagine you keep doing what you're doing, but work your way towards getting a month ahead so that you're not projecting anymore. That's pretty much what we did. Not sure if there's another way to do that. Best of luck!
Hi Irma, great question! It can be tricky to go from projecting to budgeting. The YNAB method is to only assign dollars you actually have in your bank account RIGHT NOW, so that you know for sure your budget is telling you the truth about what you can afford. That might mean that you can't assign dollars to everything currently in your monthly budget. That's why I always ask this question when I'm assigning dollars to categories: "What does this money need to do before I get paid again?" If I know my electric bill won't come due until after my next paycheck, then I don't have to assign dollars to it right now - it can wait until my next paycheck comes in. But if my internet bill comes due before my next paycheck, then I know I definitely need to assign dollars there. You can still plan ahead using the goals feature in the app (which is basically what you're doing when you project). If you want to learn more about how to do that, I recommend checking out this video, where I walk you through the process: ua-cam.com/video/An6MwCiWEOY/v-deo.html Or you could register for our free 20-minute "Set Up Your Budget" workshop to learn more about how to set up a plan with goals: www.youneedabudget.com/free-workshops/ Hope that helps! 🙂 - Ben M
IT YOUR BUDGET BECOMES “RIGID” THAN JUST MULTIPLY YOUR EXPENSES BY 3 AND USE A THIRD TO MANAGE YOUR EXPENSES-[RENT AND UTILITIES]...A THIRD TO OPERATE YOUR EXPENSES-[CELLULAR, INSURANCE]...SPLIT THE REMAINING THIRD IN HALF INVESTMENT FUNDS-[START UP CAPITAL FOR A BUSINESS, TAXES] AND REINVESTMENT FUNDS-[NOURISHMENT, SANITARY, AUTO, DEBT] ADDITIONAL INFO DIVIDE ANY FUNDS DERIVING FROM REINVESTMENT FUNDS BY 3 TO SUPPORT ANY DEPENDENT EXPENSES AS WELL AS ANY SPECIAL EVENT EXPENSES
I HATED BUDGETING UNTIL I DISCOVERED A WAY TO BUDGET ONCE A YEAR...THE POWER OF NUMBERS...NO MORE SPENDING COUNTLESS HOURS BUDGETING LIFE IS GREAT...ANNUAL BUDGETING SYSTEM
Thanks to YNAB I just had the most fun vacation I’ve ever had because I had a ton of green soldiers (dollars) ready to fight the vacation battle and that was all it was for. I felt zero guilt spending every dollar I had budgeted, no worries about trade offs or if I could afford it. I went ham on tipping and somehow came home with money left in that category. Budgeting increases the fun!
Totally awesome! Happy for you 👏
Yes, that is totally awesome! Thanks for sharing! ~Ernie
I spent three years pissed at y'all trying to use YNAB my way. You know my way that got me into the debt that I'm in and not a penny in the bank to show for it? Once I stopped and surrendered to the YNAB way, everything changed, including my relationship with money. We now make less than we've ever made and not only are we making it but we're making headway on our debt at the same time and I am just absolutely blown away that this is even possible right now. My husband has seen the improvements and now we're that cute couple that texts each other about budget things. Thank you for believing in yourselves so that you could help us believe in ourselves.
YNAB and this method of budgeting has utterly changed my relationship with my money. So so helpful. I'd 'budgeted' before, but was really just putting some money here and there. The scarcity thing is what really makes it work for me. It helps me decide what to put money toward, but it also helps me leave it there for that purpose OR make a conscious decision to use it for something else.
It essentially because this system creates mental “friction” before you spend. Other budget concepts essentially track your spending after the fact and that’s why it didn’t really work for me.
I've never thought of how scarcity also helps leave money in the budget. That is so true-I love it! ~Ernie
Jonathan! We wrote almost identical posts here. Life changing!
This budgeting method had been a blessing. My husband and I have paid off 85% of our debt and saved more than we've ever saved before. We will be paying off our mortgage 10 years early. WE LOVE THIS METHOD!!
Zero based budgeting was probably the most difficult hurdle for me to get over to "trust" my budget. Before when I was just tracking my spending, I'd always want to leave some cushion to make sure I could cover unexpected expenses. But between my "stuff I forgot to budget for" and "emergency fund" categories and budgeting into the future, I'm starting to trust that I've got things well-covered and that I can budget to zero and still be able to handle any unexpected surprises. Also just the longer I budget, the fewer things catch me off guard -- I'm ready with the true expenses categories!
YNAB has been truly life changing for me. I was always SO frustrated because I’m like ‘how the heck are other people managing their money and knowing what they have to spend???’ I would look at my bank balance and that told me nothing so I just gave up. But now YNAB has made me really understand scarcity, and also tradeoffs (hello economics! I minored in economics but you would never know looking at my previous finances 😂) it has given me clarity and understanding. Now I look at my YNAB budget and think (ok if I buy whiteclaw, then I will have less for my vacation fund lol) I never had a plan for my money, and YNAB has now made me free to actually plan my life and what is important to me. Thanks so much. I am letting my budget nerd flag fly! 🤓 I love these videos you guys are doing the lord’s work!
Before I encounter YNAB method, I used to transfer 10% of my income to my savings account, call it a day and be happy because I save money for my future. until the end of the year where I will be so confused of why I only have so little money in it. Turns out I was spending that money for Christmas holiday (flight tickets etc) and other big ticket purchase that I never realized how much I actually need for those.
YNAB taught me to be intentional with my savings and really plan for them. For the last two years I still spent a lot for Christmas but minus the guilty feeling because I was also able to hit my other saving and investing goals 😁
Feels comforting to now anticipate ‘all’ those future expenses - not get caught off guard by them. That peace of mind is all due to YNAB.
Pre-YNAB, I had no idea that what I was actually looking for was peace of mind! ~Ernie
Another perspective: my age of money is 84 days. That means that I could move money from August to pay for an expense today. Because I'll continue to follow the 4 rules of YNAB, my age of money will take a small hit and then keep climbing. Don't forget the power of no longer living paycheck to paycheck. YNAB works.
I started zero based budgeting from the beginning, when I was 16 and got my first bank account. I had a notebook with 4 categories: Clothing, Gas, Food, and Fun. Now at age 20 in YNAB I have something close to 40 categories 😂 much more fun this way and much easier than keeping track of a little notebook!
If I did income vs spending limits I would be in BIG trouble. Our YNAB budget has 15-20 categories that we are tracking that rarely get funded currently. The challenge - too much debt still. We were looking to be "done with debt" before Thanksgiving but an emergency dental visit (a full series) went well past what we had as a buffer in the purely "Medical" category. Rolling with the punches is a little bit of our lifestyle but that is ok. We have patience. What matters is everything important is covered and almost to a 45 day AOM now and when we need to roll with punches we can very easily do that.
I always forecasted before YNAB. Even when I started YNAB my mindset was forecasting. Once Zero Based budgeting clicked I've not looked back and have dumped all my spreadsheets.
Every time I hear Ernie and Ben, my brain changes it to Ernie and Burt. Sesame Street lives on.🤣
I know right? 😂
It's more when it's in the order of Ben & Ernie for me that really does it lol
Yeah, the biggest problem with the old “Excel” spreadsheet was that it wasn’t a “living/breathing” budget. Also, looking back, we would “sandbag” certain line items knowing we had one budget meeting for the month (paid once a month at the time) and wouldn’t get back to the budget until 1st of next month. YNAB is infinitely better…a complete, fun to use system. Don’t be sad Microsoft, I still love /use Excel…just not for my budget!
I’ve had a zero based budget for years but never like this!!! I was a forecaster and always was month to month. YNAB has literally changed my way of thinking about my budget and my available funds! I’m addicted!
I like to think of Zero based budgeting as Me telling my dollars what to do!
I used to be an Excel forecaster before I found YNAB. It almost hurts my brain to try to think of budgeting any other way!!
Would love to see bi weekly budgeting video
Having a zero based budget, allows me to actually spend my fun money without guilt. Before I started budgeting, I would always feel guilty about doing fun things, because what if I needed that money for something important. Having a zero based budget allows me to prove to myself that all of the important things are taken care of, and it is ok to spend this money without guilt.
I have a savings category with sub categories. My Prudent reserve gets 10% of every dollar coming in and I don't touch that except for emergencies. I build in sub categories for emergency prevention. Fyi my phone broke. Now I have a savings sub category for phone replacement every two years. When I have a windfall (unexpected income) it's split. 1/3 to future- savings: 1/3 to present- self care; 1/4 to the past (debt). It leaves me feeling prosperous rather than being on a starvation money diet. In 3 years my car is close to being paid. My other two debts are greatly reduced and I had fun too.
I was definitely aware of zero-based and envelope budgeting, but I'm not great at creating spreadsheets and then physically using envelopes only worked to a certain point. So it was using the actual software that got me from forecasting to actually budgeting what I have, and it has had such a positive impact on my finances and peace of mind. I was always able to avoid catastrophe before, but now I'm actually building something.
"I was always able to avoid catastrophe before, but now I'm actually building something." I love that way of putting it! ~Ernie
I tried zero based budgeting with a spreadsheet and Quicken and just never felt like I had a good handle on things. When I found ynab it was like everything clicked into place. The combination of zero based budgeting with the digital envelope system has been a real life changer. It helped us get out of debt, get a month ahead, and save an emergency fund. We're still amazed that we don't have to use credit cards for unexpected things. We just roll with the punches.
My first month with YNAB was confusing - since I was trying to do forecast budgeting for the month. Took awhile to alter that paradigm.
It's confusing for me too and I'm new at it as well, guess the mindset change is the real challenge here : i guess my new one is : all your essential categories are fund, breathe you. Are okey and you will make it to the end of the month alive 😉
Before YNAB I budgeted in excel spreadsheets that was intentionally NOT zero-based. I knew what zero-based budgeting was, and intentionally did not want to have to work that much at my budget. I developed a system where I would first separate money for monthly and non-monthly (what YNAB calls "true expenses") expenses into a separate bank account, so my bills were always paid. Everything else was placed into a "money pile" I called it. My wife and I would subtract money from the money pile everytime we spent something. The money pile would be refilled every paycheck (after expenses), and my wife and I developed a feel for how quickly/slowly the money pile was draining. Money pile almost empty, and payday is 2 days away? Ramen it is! It was kind of like living paycheck-to-paycheck except all of my expenses were always paid first.
Honestly, I didn't really hate this method of budgeting. I only switched to YNAB because I make significantly more money now, and I feel more responsibility to know where my money is going. But I still miss the simplicity of the money pile sometimes...
I love two nerds. I only started ynab for three days starting this first of the month and the "scarcity" you're talking about really kicked in when I give every dollar a job. I feel like I don't feel like as much a looser for not buying that pair of shoes because what more important is the electric bill.
I KNOW when my priorities are taken care of I really won't feel bad or stressed about finally getting the shoes.
Ynab is awesome.
BTW does anyone have a coupon or code for when I start my subscription in 31 days?
My husband and I are long time YNABers. Before YNAB we wrote expenses down and paid extra on debts and got out of debt except for the mortgage. After that we spent every dollar. After YNAB we realized where the extra dollars were going by giving every dollar a job. Game changer! We were able to pay off the mortgage! We still use YNAB and every dollar still has a job. However we have always been forecasters. We reconcile the budget at the end of each month to make sure we have every expenditure accounted for. We set the month ahead and run our lives off of YNAB. If we had to meet more than once a month I don’t think we would’ve stuck to it. We have ad hoc meetings if need be.
Now when an expenditure comes in at more than anticipated I kick myself for not anticipating. This month it was auto maintenance! Hate pulling money from the emergency fund that I feel like I should have anticipated.
It’s a learning experience I am finding … we learn to add more dollars ( pounds in my case) into that category to future proof for next time. I am new to YNAB but I enjoying tweaking the budget to work for me and rolling with the punches . All the best
I tried a lot of apps before ynab... of course it didn't work, at the end of the month I would look at my "budget" and shout "I spent HOW MUCH eating out"!?!?! The 4 rules of ynab completely changed my understanding of personal finances and for that I am eternally grateful... my only regret is that I didn't try ynab sooner (I already knew about it, but i was a bit scared of its "cult-like followers" 😁😁😁 according to reviews) well, look at me now, commenting passionately under a budget nerds episode 😁 the cult got me 🥰
Otherwise the abuser I would like to ask for clarification about emergency fund do I include that in my budget if I already have my emergency fund fully funded?
It’s money you need to account for, so yes, I have a category called Emergency Fund and I keep it funded to a minimum level.
My checking and savings are both places for money, and I give them all a job, including an emergency fund. I also assigned my savings to include all my “true expenses” items (Auto Tag, YNAB subscription, park season passes, gift fund).
Basically, at the end of the month, I make sure my savings account balance matches my True Expenses category. Works for me.
@@robhulson I have gotten into a very bad state of confusion in the past to the point I don’t trust MYSELF how to use ynab in regards to reconciling. If I need to transfer $ from savings and/or emergency fund….it seems like ynab gets mixed up (or I do) In the technical understanding of how ynab works. I have restarted my budget so many times. There’s just something I’m not getting. Maybe it’s from the very beginning (in setting up the budget) of the amount of my money I have entered to be budgeted. Also, it may help to inform my emergency fund is at in a bank account. So, how do I address this when the transactions “automatically’ load to my budget awaiting my approval? Sorry for the long text. I just want to get this right finally 😩
Meant to say Emergency fund is not an a bank account
@@beckyenyart8260 in that case you create a cash account in ynab an put the whole amount into your emergency fund category. never touch the category unless you have to dip into the emergency fund or add money to it, in which you will create a transfer transaction from your checking to the cash account.. 🤔 does that make sense? I'm sorry if I just add to your confusion. 😅
@@angelapontororing3552 an actual account like along with the checking and savings? Not a category right?
question: I know some day I'll need to replace my dishwasher... and I want to have at least $1k set aside for unexpected medical bills... and some for car repairs... how do you (or anyone reading) set money aside for these things? Do you have multiple categories? Or do you say, "this is the one category to absorb these types of things" ? I ask, because I have multiple categories for these things, but I'm afraid I have too many categories, so I'm just spreading out my savings goals so that it takes too long for any one to fill up, so if I have one of these emergencies I'm going to just have to borrow from another category to pay for them anyway.
for me, I have multiple savings goals, but I'll choose one to fully fund before moving onto the next so that I can focus and remember what I'm saving for. Kind of like snowball debt payments, but for savings? For example, I want to save for an emergency fund and a new laptop. I decided to focus on the emergency fund first and once that was fully funded, I'm now putting money away for a new laptop. Also, I think many of these things (medical expenses, car maintenance/repairs, new laptop) fall under what YNAB calls "True expenses (you're more than likely going to have to pay for them eventually!), which they recommend having different categories for those things.
Keep the categories and let yourself live in the tension of not always being able to fund them fully. Why? Because that gives you clarity - the reality of your situation is that you don't (right now) have enough income to fund all the things you need and/or want. When the time comes to make a big purchase, you're right that it may require pulling money from other funds, which will set you back in some areas. Rolling with the punches is good, but it only works well if you're honest about all of the things in your life that pop up as "surprise" expenses but are actually ones that should be expected and budgeted for. Stick with it, and I bet you'll find more and more money winds up in those categories - it's amazing what clarity can do for your financial priorities!
@@rojasch I hear what you're saying... I just don't see creating a "new roof" category just because some day I will need a new roof, because it might never get fully funded... I'm wondering if I said "unplanned medical expenses, car repairs, new furnace, new roof, all fall under 'emergencies'" with a goal of something above the highest potential expense, maybe that's better for the cognitive load on my brain? Of course I'm probably way over thinking it, which is why I'm looking for opinions
@@jazzam0razz oo, I do like the "snowball savings" idea... I'll have to think on this more, but I see a lot of sense in prioritizing which to fill first then roll on to the next one... that could do a lot to solve my anxiety over spreading the contributions across all the categories too thin to be effective.. it's so simple yet it wasn't obvious to me!
@@smstnitc I understand the temptation to do this, but none of those things are actually emergencies. They're all things that WILL happen sooner or later, and they could even happen one after the other or at the same time. It's much better to feel (and be motivated by) the actual scarcity of your budget than to feel artificially secure with a fully-funded "emergency" fund that is only enough to cover one or two real expenses.
All that said, there's lots of flexibility in how granular you need to get in your categories. I have a Replacement group with a line item for each major item, each with a goal set. That way it's easy to add another thing when it occurs to me ("Oh! Mattresses are expensive and need to be replaced periodically. I guess I need to budget for that, too.") But you could treat this all as a single line item, as long as you're honest about how much you really need to budget for all those predictable expenses.
It's ok to acknowledge you don't have enough money for all the stuff that needs to happen in the next X years. That realistic perspective is what empowers you to make informed choices about your finances.
But it certainly is a major shift from how most people approach "emergencies" like a broken fridge!
Ok, I have a huge question. I have been budgeting based on my projected monthly income and account for every dollar, so I end up with zero. But, I understand now that this is "projecting". So where does the money come from to truly start a budget that is not based on projected income?
I think this is why YNAB wants you to get a month ahead. We're a month ahead, so when we go to budget for June, were only using money we made in May, so we're no longer projecting based on expected income. Any money made in June then waits until July to get budgeted, etc. In the meantime, if you aren't a month ahead, I would imagine you keep doing what you're doing, but work your way towards getting a month ahead so that you're not projecting anymore. That's pretty much what we did. Not sure if there's another way to do that. Best of luck!
Victoria, thank you! I will take savings to start this.
Hi Irma, great question! It can be tricky to go from projecting to budgeting. The YNAB method is to only assign dollars you actually have in your bank account RIGHT NOW, so that you know for sure your budget is telling you the truth about what you can afford.
That might mean that you can't assign dollars to everything currently in your monthly budget. That's why I always ask this question when I'm assigning dollars to categories: "What does this money need to do before I get paid again?"
If I know my electric bill won't come due until after my next paycheck, then I don't have to assign dollars to it right now - it can wait until my next paycheck comes in. But if my internet bill comes due before my next paycheck, then I know I definitely need to assign dollars there.
You can still plan ahead using the goals feature in the app (which is basically what you're doing when you project). If you want to learn more about how to do that, I recommend checking out this video, where I walk you through the process: ua-cam.com/video/An6MwCiWEOY/v-deo.html
Or you could register for our free 20-minute "Set Up Your Budget" workshop to learn more about how to set up a plan with goals: www.youneedabudget.com/free-workshops/
Hope that helps! 🙂
- Ben M
What’s wrong with only budgeting $10 if that is all you have??
"Maybe i'll got to the movies ...... by myself"
Ben wearing Teddy Fresh gear?
It's a different brand I got from Target, but maybe that was an inspiration. Isn't it fun? 😁
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