Your rules claim to be about money, but they're honestly not. They're about defining yourself and your values. You say your value this or that, but are you putting your money where your mouth is? Are those actually your values? Starting on ynab really revealed to me that what I thought about myself didn't match my actions. By prioritizing certain budgetary categories over others, it helped me shape my values and become closer to the person I want to be. You're a self-help app, not a money app.
They're both. I read the book first before signing up. I was praying about freedom, and peace. The YOU NEED A BUDGET book showed up. For the first time in my 58 years I have hope that we can correct/learn how to truly manage our finances, get our bills on schedule and get out of the pay check to pay check loop.
YNAB win here: it's a new month and I just got paid. I've been eyeing these super cool markers for drawing, but they are a little pricy. In the old days, I wouldn't have thought twice about spending the money - I just got paid! But with YNAB, I funded my categories, including some modest savings goals (but they are a stretch for me) *first*. After looking everything over to "find the money first", I found that none of the categories were less important than the new markers. So, I'm putting the markers in my "Wish farm" (shout out to Heard it from Hannah) and will be working towards funding them over time. I absolutely cannot express how significantly YNAB has improved my life. Thanks for everything you do!
For me - Roll with the punches is for obligatory spending (unexpected repair, a bill was larger than expected). Find the money first is for discretionary spending - want but not need. I roll with needs that I have no choice with but FTMF gives choice about priorities in wants.
We had our kitchen, basement, and wood flooring destroyed by water last year. We figured while we were inconvenienced by having to move out and empty the house for the repairs we should get other whole house things done. We were able to plan ahead on where to pull the money from to pay for a really nice new kitchen instead of just what insurance would pay for and got new windows at the same time. Our age of money took a hit but we were able to fund these things without worrying.
16:50 my wife and I are doing this. Can I pull some money from some other categories? Yes. It's totally an option. But I don't want to make that a habit for us. So we are waiting until I get paid at the end of the month to finally fill the category and make a purchase. We were ready to buy this item at the beginning of the month, but YNAB worked us through unexpected expenses that meant we could not make this purchase when we wanted
I have been using YNAB for years, and I have always been reactive rather than proactive, which has cause a lot of anxiety in my budget, thinking I was not good at budgeting. But the last month, I decided to be more proactive and see what I got before I spent, and make those tough decisions on when to spend and when to take from another category. And that helped me prioritize certain purchases more than others. Such as the new HVAC is just had to get for house. It felt so much better moving the money around before hand from the other categories, that doing it after the fact.
You recognize that your priorities have changed and reassign your money before making the purchase. So it means that instead of overspending and rolling with it, you’re actively keeping your budget aligned with your priorities. Priorities can change day to day, not just once a month… (Doing this is one of the biggest ways YNAB has changed my relationship with money.)
Regarding to Ben's "My main goal is to pay down debt, therefore, no groceries, no eating" I wanted to say that this sort of extremism is what - ahem - some financial systems advocate for, and while I appreciate the importance of getting out of debt and being dedicated to that goal, it's so aggressive that it teaches you to stop living. One of the things I love about YNAB and the philosophy behind it is that it rebuilds your relationship with money. As Ben often advocates: Money is supposed to be spent.
I recently changed my debt payoff goal for one loan that I badly want to finish by the end of this year. For the last two years, I would use "leftover" money to overfund the minimum payment as I could and figured I'd get it paid off "soon." Working in YNAB, I was able to see what specific payment amount it would take to pay it off by next spring, next January, or even this year. Watching this Budget Nerds episode helped me switch up my thinking. If this debt payoff goal is important to me, fund it first! And then it's ok if other categories don't get fully funded based on the existing targets. Having targets set up to automate the budget can be nice, but now it's time to come off of autopilot for a bit to prioritize an important goal over hitting arbitrary targets I set up in the past.
I just had an unplanned expense, come up in the near future. Instead of panicking, I looked to see where I could find some money to pay it. I moved the money into the appropriate category and it is sitting there waiting. It really feels good to know that, I can cover that expense when it comes.😊🎉
YNAB Win - I just "found the money first" last week when we were looking at doing a bathroom remodel a year earlier than we had been planning. After the quote came in much higher that what we were hoping, I moved all the comfortable dollars to the remodel category which wasn't enough, and decided to hold off longer until we could comfortably move more to it. There was money enough in other categories to cover, but it wasn't worth the "uncomfortableness" of rolling from those higher priorities. I learned this lesson of "finding the money first" from ignoring it 5 years ago with our kitchen remodel and having to do too much scrambling and WAMing. This decision feels so much better and informed, YNAB Magic!! PS. "Being in it everyday" and "Arbitrary Rules" - music to Budget Nerd ears! ❤ PSS. Another vote for You've Got Mail, in my top 3!!! "She has to be!!!" "Don't you think daisies are the friendliest flower?" PSSS. Raising another "Pure Budget Nerd", my 14-year-old son loves his too!
YNAB Win: So I've been budgeting for a few years and really loved the ynab method and so I've joined the ynab family. My win is I really wanted the Godzilla blu ray boxset which is quite expensive and it wasn't in stock for months but it came back in stock but I didn't have the money in fun money category but I was in a good place with Auto Maintenance so I moved the money and bought the boxset and I don't feel bad or feel like I have failed. I will eventually refill the Auto Maintenance category. Love budget nerds great show Ben and Ernie.
I usually find the money, but don't actually move the money until a transaction has gone through and I see RED😅. At that point I have to cover overspending with the money from my intended category, but it's more of an "I have to" move by then. I'm going to try and move the money before my transaction/purchase, I think if I do that, it will be a choice and more of a trade off instead ( I'll feel it a little more). This is a great bonus rule :).
I feel personally attacked 😂😂 Groceries are always the issue here. Towards the end of the pay period, I would rather get what I need for next week, too, rather than spending $20 today on the urgent thing and then having to go back tomorrow when we get paid for the big shop. Finding the money first is definitely the habit I need to get back into. I agree it is a much better feeling than WAMing after the fact.
lol they're $5-7 in my head, but I don't think I've accounted for inflation. Still really cheap though! And now that I think of it, there is a bag of orange chicken I buy for $5.79. Add in a couple cups of rice and that's cheap (though it's not the best orange chicken). ~Ernie
@@YNABofficial YESSS! I would love this blog or episode. How to be scrappy and thrifty in general or just at the end of the budget. Would love to hear more about your meals.
FTMF actually results in me revising my budgeting targets over time. I may realize that gift-giving or house cleaning is more important to me than clothing purchases after repeated transfers out of that category into others. This results in less “rolling” as time goes by.
B&E (or E&B)…. IMHO - one of your best episodes. This topic is the crux on where the YNAB philosophy succeeds for founders. Nice work making the topic human / practical / relatable.
This video is making me think that I should get rid of my in-budget "emergency fund" and use that money to fill up next month. Since otherwise it's kind of easy to pull money out of the emergency fund, then just fill it up when I get paid. I'll still have my larger "income replacement" tracking account that'll cover true emergencies. And I'll maybe decide on a max to assign each month, and put some "extra" in my "unexpected expenses" category. And maybe rename that category to "Rule 3" like another comment mentioned.
Yes, rather than a category for "Emergency Fund", I much prefer having money allocated to time ahead. It took me awhile but I am now fully funded for the next three months. Any extra money I have goes into the "General Savings" category, and if I overspend a category and need to transfer from another category, it comes out of the "General Savings" category. So, the "General Savings" category is my savings and my buffer.
I wish you had stuck with the noble example of your mom coming for dinner. I feel like this is exactly where we struggle. So often, there are many obligations that feel like we can't go cheap because it would impact someone else. Would love creative ideas on being generous and hospitable without being "cheap." Also, I wonder if, in YNAB, there is a way that to mark what the money in categories is for? I struggle because I put money away then forget what I have. Then, when I am rolling with the punches, I pull it, only to later realize I needed it. This is actually a new problem as our family has grown, little kids have gotten older, etc. and there is a lot more to remember.
I'd like to share that you don't have to necessarily use YNAB to pay down debt. I use it to just manage my expenses and understand my spending. It makes life so much easier saving for big life purchases and fun vacations. I am comfortable carrying a car loan and a mortgage. I'm not going to be seeking to pay down my car loan quickly and then paying off a mortgage. I'm just using YNAB to manage my expenses and make sure I'm not surprised by anything.
I'm so bad at it... but with a solid income, low expenses with a 40-50% savings rate... there's always income coming in without hurting my savings (saving 42% instead of 50% some pay periods isn't "hurting" my savings). Eating out is a pain point, but I do check myself because too much of it doesn't align with my finance goals or my health goals.... that and a recently new (expensive) hobby I've been throwing money at... Have I wasted some money? Yep.. but most things I buy, I have no regrets about it.
My multi-year running issue with YNAB is how it handles an active credit card. Not a card that is in a payoff mode and not being used; and not a card that is at zero and is used occasionally and then brought back to zero. I’m talking Daily Driver card (bills, groceries, etc) that I can pay more than the monthly activity but not the full statement balance. I have a set amount I can pay but I have to do the math to find out what that is above the funded activity. Should I just drop the monthly amount I can pay into the credit card category and then when a bill lands cover it in that category from the credit card amount? That feels backward to what YNAB is about because it’s funding a category after it was spent.
Is there an end goal in mind? Do you want to eventually be in a place where you can at any point in time pay the balance down to zero? Or is the plan to continue paying that set amount every month? If you're going to keep paying that set amount, there isn't an automatic way to do that when accounting for the monthly activity. You'll have to continue to do the math to figure out how much to assign directly to the payment category. We have some other ideas in this article www.ynab.com/blog/are-you-riding-the-credit-card-float Let me know what you think! ~Ernie
@@YNABofficial eventually yes I’ll be able to get that card back to zero and default back to statement balance / full balance payments. I suppose then for now I will put the planned amount to the credit card category and when a bill lands on it in YNAB I’ll cover it from the assigned amount in the payment category.
Can we have an episode about naming conventions for payees? I used to enter the name of most every payee we spend money with. Now, I categorize payees into groups such as retail store, service provider, healthcare provider, gas station, etc. and track the individual business name in the memo when we care to. Makes reports easier to use and still allows tracking of spending at certain businesses.
YES to the episode idea and to the naming conventions. I use both generic and specific payees e.g. I have a few named cafes / restaurants that we use regularly (not Chipotle 😂) as well as a generic cafe and a restaurant that I use for places that I might only go to once or twice. Keeps payee numbers under control!
If you were working with cash, this would be mandatory. You can’t spend 50 if there’s only 40 in the envelope. 10€ has to come from someone before you can give it out.
Your rules claim to be about money, but they're honestly not. They're about defining yourself and your values. You say your value this or that, but are you putting your money where your mouth is? Are those actually your values? Starting on ynab really revealed to me that what I thought about myself didn't match my actions. By prioritizing certain budgetary categories over others, it helped me shape my values and become closer to the person I want to be. You're a self-help app, not a money app.
*mic drop ~Ernie
They're both. I read the book first before signing up. I was praying about freedom, and peace. The YOU NEED A BUDGET book showed up. For the first time in my 58 years I have hope that we can correct/learn how to truly manage our finances, get our bills on schedule and get out of the pay check to pay check loop.
YNAB win here: it's a new month and I just got paid. I've been eyeing these super cool markers for drawing, but they are a little pricy. In the old days, I wouldn't have thought twice about spending the money - I just got paid! But with YNAB, I funded my categories, including some modest savings goals (but they are a stretch for me) *first*. After looking everything over to "find the money first", I found that none of the categories were less important than the new markers. So, I'm putting the markers in my "Wish farm" (shout out to Heard it from Hannah) and will be working towards funding them over time. I absolutely cannot express how significantly YNAB has improved my life. Thanks for everything you do!
Great win!!
For me - Roll with the punches is for obligatory spending (unexpected repair, a bill was larger than expected). Find the money first is for discretionary spending - want but not need. I roll with needs that I have no choice with but FTMF gives choice about priorities in wants.
I just did a combination of the two last month for unexpected repairs.
Oh, that's a great way to frame it! ~Ernie
We had our kitchen, basement, and wood flooring destroyed by water last year. We figured while we were inconvenienced by having to move out and empty the house for the repairs we should get other whole house things done. We were able to plan ahead on where to pull the money from to pay for a really nice new kitchen instead of just what insurance would pay for and got new windows at the same time. Our age of money took a hit but we were able to fund these things without worrying.
16:50 my wife and I are doing this. Can I pull some money from some other categories? Yes. It's totally an option. But I don't want to make that a habit for us. So we are waiting until I get paid at the end of the month to finally fill the category and make a purchase. We were ready to buy this item at the beginning of the month, but YNAB worked us through unexpected expenses that meant we could not make this purchase when we wanted
I have been using YNAB for years, and I have always been reactive rather than proactive, which has cause a lot of anxiety in my budget, thinking I was not good at budgeting. But the last month, I decided to be more proactive and see what I got before I spent, and make those tough decisions on when to spend and when to take from another category. And that helped me prioritize certain purchases more than others. Such as the new HVAC is just had to get for house. It felt so much better moving the money around before hand from the other categories, that doing it after the fact.
You recognize that your priorities have changed and reassign your money before making the purchase. So it means that instead of overspending and rolling with it, you’re actively keeping your budget aligned with your priorities. Priorities can change day to day, not just once a month… (Doing this is one of the biggest ways YNAB has changed my relationship with money.)
Regarding to Ben's "My main goal is to pay down debt, therefore, no groceries, no eating" I wanted to say that this sort of extremism is what - ahem - some financial systems advocate for, and while I appreciate the importance of getting out of debt and being dedicated to that goal, it's so aggressive that it teaches you to stop living. One of the things I love about YNAB and the philosophy behind it is that it rebuilds your relationship with money. As Ben often advocates: Money is supposed to be spent.
I recently changed my debt payoff goal for one loan that I badly want to finish by the end of this year. For the last two years, I would use "leftover" money to overfund the minimum payment as I could and figured I'd get it paid off "soon." Working in YNAB, I was able to see what specific payment amount it would take to pay it off by next spring, next January, or even this year. Watching this Budget Nerds episode helped me switch up my thinking. If this debt payoff goal is important to me, fund it first! And then it's ok if other categories don't get fully funded based on the existing targets. Having targets set up to automate the budget can be nice, but now it's time to come off of autopilot for a bit to prioritize an important goal over hitting arbitrary targets I set up in the past.
I just had an unplanned expense, come up in the near future. Instead of panicking, I looked to see where I could find some money to pay it. I moved the money into the appropriate category and it is sitting there waiting. It really feels good to know that, I can cover that expense when it comes.😊🎉
Just today I decided that replacing my patio furniture now was more important than saving for my (eventual, someday) water cremation.
YNAB Win - I just "found the money first" last week when we were looking at doing a bathroom remodel a year earlier than we had been planning. After the quote came in much higher that what we were hoping, I moved all the comfortable dollars to the remodel category which wasn't enough, and decided to hold off longer until we could comfortably move more to it. There was money enough in other categories to cover, but it wasn't worth the "uncomfortableness" of rolling from those higher priorities. I learned this lesson of "finding the money first" from ignoring it 5 years ago with our kitchen remodel and having to do too much scrambling and WAMing. This decision feels so much better and informed, YNAB Magic!!
PS. "Being in it everyday" and "Arbitrary Rules" - music to Budget Nerd ears! ❤
PSS. Another vote for You've Got Mail, in my top 3!!! "She has to be!!!" "Don't you think daisies are the friendliest flower?"
PSSS. Raising another "Pure Budget Nerd", my 14-year-old son loves his too!
I love your YNAB win! Finding the money first makes you a lone reed...standing tall, waving boldly in the corrupt sands of commerce. ~Ernie
@@YNABofficial 🤣🤣🤣
@YNABofficial I knew y'all were my people! ❤
My “Forgot to budget for” was renamed “Rule 3”. I use that, in most cases, to move budget.
YNAB Win: So I've been budgeting for a few years and really loved the ynab method and so I've joined the ynab family. My win is I really wanted the Godzilla blu ray boxset which is quite expensive and it wasn't in stock for months but it came back in stock but I didn't have the money in fun money category but I was in a good place with Auto Maintenance so I moved the money and bought the boxset and I don't feel bad or feel like I have failed. I will eventually refill the Auto Maintenance category. Love budget nerds great show Ben and Ernie.
6:36 it's more empowering to have intentionally chosen before spending the money than it is to have to react afterwards
I usually find the money, but don't actually move the money until a transaction has gone through and I see RED😅. At that point I have to cover overspending with the money from my intended category, but it's more of an "I have to" move by then. I'm going to try and move the money before my transaction/purchase, I think if I do that, it will be a choice and more of a trade off instead ( I'll feel it a little more). This is a great bonus rule :).
I feel personally attacked 😂😂 Groceries are always the issue here. Towards the end of the pay period, I would rather get what I need for next week, too, rather than spending $20 today on the urgent thing and then having to go back tomorrow when we get paid for the big shop. Finding the money first is definitely the habit I need to get back into. I agree it is a much better feeling than WAMing after the fact.
What are those $5-7 meals, Ernie? 🤣🤣🤣
lol they're $5-7 in my head, but I don't think I've accounted for inflation. Still really cheap though! And now that I think of it, there is a bag of orange chicken I buy for $5.79. Add in a couple cups of rice and that's cheap (though it's not the best orange chicken). ~Ernie
@@YNABofficial YESSS! I would love this blog or episode. How to be scrappy and thrifty in general or just at the end of the budget. Would love to hear more about your meals.
FTMF actually results in me revising my budgeting targets over time. I may realize that gift-giving or house cleaning is more important to me than clothing purchases after repeated transfers out of that category into others. This results in less “rolling” as time goes by.
B&E (or E&B)…. IMHO - one of your best episodes. This topic is the crux on where the YNAB philosophy succeeds for founders. Nice work making the topic human / practical / relatable.
This video is making me think that I should get rid of my in-budget "emergency fund" and use that money to fill up next month. Since otherwise it's kind of easy to pull money out of the emergency fund, then just fill it up when I get paid. I'll still have my larger "income replacement" tracking account that'll cover true emergencies. And I'll maybe decide on a max to assign each month, and put some "extra" in my "unexpected expenses" category. And maybe rename that category to "Rule 3" like another comment mentioned.
Yes, rather than a category for "Emergency Fund", I much prefer having money allocated to time ahead. It took me awhile but I am now fully funded for the next three months. Any extra money I have goes into the "General Savings" category, and if I overspend a category and need to transfer from another category, it comes out of the "General Savings" category. So, the "General Savings" category is my savings and my buffer.
Do it!
I wish you had stuck with the noble example of your mom coming for dinner. I feel like this is exactly where we struggle. So often, there are many obligations that feel like we can't go cheap because it would impact someone else. Would love creative ideas on being generous and hospitable without being "cheap."
Also, I wonder if, in YNAB, there is a way that to mark what the money in categories is for? I struggle because I put money away then forget what I have. Then, when I am rolling with the punches, I pull it, only to later realize I needed it. This is actually a new problem as our family has grown, little kids have gotten older, etc. and there is a lot more to remember.
This might be a good reason to add more categories. Those extra details could help you better align behaviors with your priorities. ~Ernie
I'd like to share that you don't have to necessarily use YNAB to pay down debt. I use it to just manage my expenses and understand my spending. It makes life so much easier saving for big life purchases and fun vacations. I am comfortable carrying a car loan and a mortgage. I'm not going to be seeking to pay down my car loan quickly and then paying off a mortgage. I'm just using YNAB to manage my expenses and make sure I'm not surprised by anything.
I'm so bad at it... but with a solid income, low expenses with a 40-50% savings rate... there's always income coming in without hurting my savings (saving 42% instead of 50% some pay periods isn't "hurting" my savings). Eating out is a pain point, but I do check myself because too much of it doesn't align with my finance goals or my health goals.... that and a recently new (expensive) hobby I've been throwing money at... Have I wasted some money? Yep.. but most things I buy, I have no regrets about it.
Check out Aldi’s turtles instead of goldfish! Cheaper and I swear they taste better!
My multi-year running issue with YNAB is how it handles an active credit card.
Not a card that is in a payoff mode and not being used; and not a card that is at zero and is used occasionally and then brought back to zero. I’m talking Daily Driver card (bills, groceries, etc) that I can pay more than the monthly activity but not the full statement balance.
I have a set amount I can pay but I have to do the math to find out what that is above the funded activity.
Should I just drop the monthly amount I can pay into the credit card category and then when a bill lands cover it in that category from the credit card amount? That feels backward to what YNAB is about because it’s funding a category after it was spent.
Is there an end goal in mind? Do you want to eventually be in a place where you can at any point in time pay the balance down to zero? Or is the plan to continue paying that set amount every month?
If you're going to keep paying that set amount, there isn't an automatic way to do that when accounting for the monthly activity. You'll have to continue to do the math to figure out how much to assign directly to the payment category.
We have some other ideas in this article www.ynab.com/blog/are-you-riding-the-credit-card-float
Let me know what you think! ~Ernie
@@YNABofficial eventually yes I’ll be able to get that card back to zero and default back to statement balance / full balance payments.
I suppose then for now I will put the planned amount to the credit card category and when a bill lands on it in YNAB I’ll cover it from the assigned amount in the payment category.
Please share your spreadsheet of cheap meals!
Ernie can you share your meal plan you mentioned?
Can we have an episode about naming conventions for payees? I used to enter the name of most every payee we spend money with. Now, I categorize payees into groups such as retail store, service provider, healthcare provider, gas station, etc. and track the individual business name in the memo when we care to. Makes reports easier to use and still allows tracking of spending at certain businesses.
Now that's nerdy...and super interesting, too! I'll put it on the list for Ben and I to discuss. Thanks, Elizabeth! ~Ernie
YES to the episode idea and to the naming conventions. I use both generic and specific payees e.g. I have a few named cafes / restaurants that we use regularly (not Chipotle 😂) as well as a generic cafe and a restaurant that I use for places that I might only go to once or twice. Keeps payee numbers under control!
Hey hey...never been the first viewer before!!
Ben was too busy cold plunging at the YNAB staff retreat to get here first 🤣 ~Ernie
Proactive vs reactive spending based on priorities!
If you were working with cash, this would be mandatory. You can’t spend 50 if there’s only 40 in the envelope. 10€ has to come from someone before you can give it out.
Well now i really want some under $10 meal ideas
Good reminder, thanks.
Stop talking but more importantly, sleep and hydrate!
Love the biblical expression "draw a line in the sand" 😊
Why have I never heard of YNAB?