My name is Trevor and I am a nerd.
I don’t mean that in a trendy Big Bang Theory sort of way, even though I do enjoy video games and comic book movies. I mean it in the spreadsheet, planning sort of way. My nerdom is one reason I took to personal finance so well. I honestly enjoy budgeting and forecasting and cash-flowing and all those other words that put most people into a coma.
So if there was one thing I had down it was my budgeting system. I used Mint.com and had budget categories that notified me when I came close to overspending. I also had a Google document spreadsheet that split the month into pay periods. I entered in my income, went down the sheet and subtracted all the expenses, yadda yadda yadda. I was on top of it, right?
Then I found YNAB
YNAB stands for You Need A Budget. Tell me something I don’t know. I had seen people singing YNAB’s praises for a while. I just could not figure out why I needed to pay for budgeting software when I was doing so well on my own for free. I finally and somewhat reluctantly downloaded the trial version to prove to myself I didn’t need it.
At first I was overwhelmed. You have complete control over YNAB and as such you’ve got a lot of options for how to proceed. The learning curve is steep but thankfully the YNAB team puts on free classes every week. These classes are informal and very interactive. After participating in two classes I felt very ready to tackle their system.
YNAB unlike other budgeting software is not linked to your bank accounts. That means transactions aren’t entered automatically. They are done manually. This can also seem very daunting. After getting over my laziness though I realize now that this is the truly powerful aspect of YNAB. A budget is telling your money what to do so it only makes sense that you should be in control of entering your transactions. When you have to put into the restaurant category that you just spend $30 more than you budgeted for the month and it’s only May 17 you really get a feel for where your money is going.
Rule One: Give Every Dollar a Job
Rule Two: Save for a Rainy Day
Rule Three: Roll with the Punches
Rule Four: Live on Last Month’s Income
There are classes based on each rule and I recommend checking them all out. And each one of them is probably due their on post (and maybe I will do just that). The first two are pretty basic when it comes to doing a budget. Roll with the punches is a great way to insert some grace into your budget because things are going to happen and you’ll have to adjust. That’s why you should make a new budget each month and not try to live off the same one all the time.
But oh man that fourth one. If becoming debt free is financial peace (and it is!) then living off last month’s income is financial bliss. Kate and I recently completed building the buffer in our checking account and just this morning I filled out June’s budget with money we already have. No balancing bills for the middle of the month paycheck to hit. No splitting your budget categories into pay periods. It’s awesome!
Their mobile app is wonderful too. Kate and I never check our bank account balance anymore, we just check YNAB. It updates in real-time across all platforms (our computers and phones). So as soon as I spend some money on groceries, Kate can see the change to our remaining balance.
Whether you are a seasoned budgeter or have never found the system that works for you, I highly recommend everyone give the YNAB trial version a go. Make sure you take some of the online classes and read through the features and method on their site. The best part of the trial is it lasts for over a month to give you the full experience. And when you convert over to the full version, your budget and information migrates with you so you don’t have to redo anything.
You Need A Budget. You Need YNAB.