From time to time I have had clients that I believed need to do some work on budgeting. In, both, my professional and personal life I like to walk my talk or said another way practice what I preach. So, it was time for me start or rather restart my budgeting journey. I had struggled in earlier attempts as I dislike bookkeeping type work and after a “honeymoon” period usually stop the effort.
Each month I had money at the end of the month but had little I idea exactly where it went. I need to focus on my de-facto lifestyle choices. Was I overspending? Could I save more or add more quality spending to make my life fuller and potentially less financially stressful? In short, my money question came down to how could I use my money to make my life better and congruent with my values?
After reviewing the online choices and my past budgeting experiences, I choose to do the 34-day trial of You Need A Budget or YNAB. I later figure the magic of the 34 days as it gets you through a first full month with some wiggle room to see if you really like the software.
Starting out, I had to really learn the philosophy around the YNAB software. I took several of the free how to courses available and watched several independent You Tube videos that provided some best practices and techniques that I adopted. The free 20-minute live courses are offer frequently and are easy to sign up to watch. One thing specific thing I like about this budgeting app is the ability to manually or auto update transactions through links to credit card and banking accounts. It has proven especially useful to catch some transactions I might have missed.
Most importantly as I started, I took it easy on myself realizing that it would take some time to work into meaningful long-term use of any budgeting tool. I accepted that I would make some mistakes along the way and refine my process over time.
YNAB follows four rules.
1. Give Every Dollar a Job
2. Embrace Your True Expenses
3. Roll With The Punches
4. Age Your Money
These rules are simple guiding principals for YNAB. The software helps make sure I put all available money toward some purpose. Using the software, it was easy for me to automate electronic expenditures like credit cards and banking transactions to make sure I capture most expenses. The software allows the budget to adjusted as life happens like my new orthodontic expenses.
Finally, YNAB gives a “score” of sorts; the “age of the money.” The age tells the average amount of time your money sits in accounts before it is spent. Higher numbers are generally better and mean you are living further away from a paycheck to paycheck lifestyle. For more info see on the rules see https://www.youneedabudget.com/the-four-rules/.
Initially, I created a budget line for all the expenses I could recall. Fortunately, the software automation helped me capture some costs I had not remembered. Over time, I have refined the expenses and become more conscious of my spending.
Successes and Lessons Learned
1. Using YNAB, has created more serenity in my financial life as I gain greater understanding on how I really use my money.
2. I have greater peace of mind as I created funds for future expenses like phone replacement and car maintenance. These are in addition to an already established emergency fund.
3. I make sure to get a receipt for cash transactions, so I record later and try to do the 30 second transaction reporting quickly after the purchase.
4. The phone app has proven to be extremely useful on the go.
5. YNAB has proven to be easy to use and worth the annual $85 cost.
6. I have looked a re-prioritizing my funds to better fit my lifestyle. I have not had to agonize over the money expenditures.
7. I underestimated my grocery bills and charity giving.
8. I have been able to increase my emergency fund nicely and better prepared for big unknown expenses or a temporary period of reduced income.
In short, the past 3 months of using YNAB has been successful. I have not felt overburden with bookkeeping work and have learned more about how I use my money.