There's No Such Thing As Saving Money
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- เผยแพร่เมื่อ 2 ก.ค. 2024
- What if... saving money wasn't actually a thing? Crazy, right?! Well, if you subscribe to YNAB's philosophy -- the Four Rules -- then money is properly understand as a spending tool. The whole point of money, and your budget, is to plan how to spend your money. Savings is really just money that you plan to spend later, whether it's three days later at the grocery, three months later for an oil change you know you need to get, or thirty years later when you retire from the workforce!
Ben and Ernie explore this idea, prompted by a blog post Ben wrote back in September. Saving money is a bummer for a lot of people, and perhaps the reason is because they were thinking about it all wrong!
There's No Such Thing as Saving Money (Blog Post) by BenB:
www.ynab.com/blog/no-such-thi...
Share your YNAB wins with Ben and Ernie!
budgetnerds@ynab.com
Timestamps:
00:00 Intro
01:55 What does saving money mean exactly?
06:56 Savings is more than just an account
12:07 A better definition of saving
24:44 Spending is more fun than saving
31:06 YNAB wins
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I can’t call this “weirdly happy to spend” but I have a new category that I think is in the spirit of the question… my grandmother passed away recently and my mom asked if I could fly out of state in five days (not cheap). I looked at YNAB and grumbled about what category this would come out of. Then I paused and was grateful that I have money set aside for everything I need, and more than one thing that I want, that I could afford this trip no problem, and that something I want would just have to wait a bit longer. After the trip, I created a new “Show Up” category so I have money set aside to show up for the people I care about when the opportunity arises.
That’s beautiful ❤
Love it... Adding it 😊
Love this! My mother in law was placed in the hospital over the holidays and I was happy to have some money in my gifts category to get her the things she needed/wanted but I was thinking I needed something bigger in case more was asked of us.. like paying for nursing help or taking time off to support. This is exactly what I need! Thanks for the idea!
Oh. Oh wow. Didn’t expect that conclusion 😢 ❤
Show up-- love it
Christmas! This is the first year I had a Christmas sinking fund! I was able to buy new decorations and gifts guilt free! The best feeling! Happy New Year!
Yes, the best feeling indeed! Now we start the process all over in January! ~Ernie
This makes me wonder if we can do away with the term "savings" or "saving money". Maybe it could be replaced with money planning instead.
saving money = allocating income for future expenses
I love having categories that have a 10 year down the line goal (husband’s next car). It’s great knowing we will be able to have the money when we need it instead of panic buying something when his eventually gives out.
Similarly - I knew in the spring my 8yo Honda wasn't;t going be here forever- I would be financing a new car soon. In September did it - and paid it off in 70 days! - as soon as the next paycheck came in I have a $ aside in a month and hope in another 8 years be be in a position of choice and time!
Setting up YNAB today and this was helpful! Probably saved me a lot of grief. I’m still confused but optimistic.
My grandma would say money doesn't do anybody any good if it isn't circulating. She also encouraged me to save... Ha!
I'm afraid of lack so the saving part I got down (eventually). Now I think I need to learn to circulate my money. I like the idea of saving for joy.
YNAB has helped me save for a couple of future expenses that are one-off: A huge renovation of my bathroom. I can now buy something beyond the basics and also pay for a stay outside the home while the work is being done. And: Later in 2024 I can use the same monthly amount to save in a new category of joy.
paying for an unexpected car repair from my car maintenance category with no stress was a real win!
Wow! You have given me so much to think about! Rethinking my savings because it’s for future expenses that I have, rather than just to save.
I think Hannah's video on why we don't need an emergency fund budget category more clearly explains the concept you are trying to convey. Also as a more interesting way to talk about retirement savings at parties might I suggest saying you are saving to be able to quit your job and still be able to pay your life subscription fees (food, rent/home expenses, clothes, transportation) indefinitely.
Through YNAB my wife's car accident has been much less stress than I thought it would be. We had planned to buy a car in late 2024 but we had to buy one now. We were able to shift money from saving for our second house, a vacation to italy, and emergency savings to put a large down payment on the new car. We were able to go with the flow and shift our budget to match our needs.
Money = Options! Love it! ~BenB
New year is approaching. Going to restructure my categories based on my budget that I expect to have as a retiree in 2 years.
Tip from the retired🙂 If you do go out and travel back home late at night plan your budget to allow for a hotel on each of those nights. It will come sooner than you think and who want to stop doing the things you enjoy.
I don’t have a savings goal but I have more money in a savings account than I have ever had. Funny how that works in the YNAB Universe
Agreed! ~Ernie
My partner tends to 'gamify' savings. He is regularly chasing 'high' savings rates. As someone who works in banking I enjoyed your 'quota' comment hit true & it's usually how the new high yield savings account my partner is lusting over came to be.
One last thing.... If you look at our budget you see categories based on when we plan to spend the money- Current Us, Near Future Us (2 years). It has given us such peace of mind for big future expenses like a new roof in 10 years.❤
I like those category groups a lot! It makes you and your partner the main characters of your money story! ~Ernie
I worked in banking in the late 70s early 80s, when interest was the opposite of what it is now. So to me, savings was always a place to park my money with the hope that it will accrue interest. Now, I have a savings account where I park my money, but it was only to put somewhere beside my spending account. Which never really worked anyway, halfway through the month I'd start moving it over to the savings account. I just came across YNAB. I'm tired of yet another year of starting strong, taking days to make a "good" budget, only to end the year in a mess. This sounds like I've found my answer.
It's not about perfection over here-you have lots of flexibility as life and priorities change month after month! ~Ernie
My savings account pays interest, my checking doesn't, so it doesn't make sense for me to create a 'savings' category in YNAB where it's still physically in a checking account. It has no specific purpose, but when the day comes I need it, I'll be glad I had saved it.
Happy Holidays you guys! 🎄❤️
I have to admit I am a saver 😅 Even with YNAB some of my long term expense categories are pretty cushy and super vague. But now might be a good time to revisit that
As an HVAC guy's daughter, Keep buying the cheap ones, Ernie! Dad says the expensive ones have too much resistance and burn out blower motors faster from his experience!
Also, so glad you put this all into words because I've always been bothered by people's arbitrary savings goals or percents and never known how to express it properly lol
Good to hear there's some validation from other professionals for my approach to furnace filters! 🤣 ~Ernie
I like to say that in YNAB nothing is savings and everything is savings.
It's true!
Central Virginia gets cold though, lows in the 20s and 30 in the winter......
Oh and in a standard forced air system the aircon coils are on top of the furnace in the Air duct.
It does indeed, but nothing compared to Wisconsin! 😅 ~BenB
I’ve been waiting for a new episode!! 💃
It was weird skipping a week! Glad to be back! ~Ernie
I ran into this problem of "what is savings?" without fully realizing it. I started to think of everything as expense categories and "Savings" didn't really make sense as a super/master category. What I came up with is a super category called "Untouchable". When I put money into retirement accounts, or stocks that I'm holding long-term, or any other type of account where there is a penalty or tax consequence for using that money right now, I put those in categories under "untouchable". Granted, I will concede that these are still ultimately spending categories. I will eventually spend my retirement. But my untouchable money is the closest thing I have to savings, since I really can't access that money right now. Everything else is money for spending.
If you make the actual account (IRAs, brokerage, etc) a Tracking account instead of a Budget account you can get rid of the "untouchable" budget category because the amounts in Tracking accounts don't get included in Ready to Assign.
@@biblioholic7139 Yes, those accounts are set up as tracking accounts, but in my budget, I still budget for outflows for deposits into those accounts.
You probably needed a new washable HVAC filter Ben 😂 I've been using them for 4 years now, with sensitivities and pets, and I love them!
My college football season tickets! It’s a big expense and I’m happy to be able to just pay the whole thing at once! My spouse likes to hoard money away (aka a saver) and I was always like “but what is it FOR??” and he never had a good answer. I think I’ve finally gotten him to start changing his mind on savings…7 years later… 😂
Sportsball doesn't come up much in this community so I'm jumping at this opportunity-which team do you have season tickets to?! ~Ernie
My Alma mater…the Oklahoma State Cowboys! 🧡🖤🧡
I am also surprised that sports don’t come up very often in the YNAB community…like why?!?!
@@lisahartfiel9720 my favorite OK St player of all time-Kevin Williams! #skol ~Ernie
I spend 100% of my paycheck every month... just half of that is spent on buying my freedom by investing those dollars.
I don't have a savings account.
I recently re-structured my groups and categories and under Savings, I really just have things like home down payment, wedding, new car, etc. Traditional big ticket items. And if you consider those categories my only savings, then this month only about 7% of my paycheck went to savings. But if you count my true expenses for items I'm "saving" for throughout the next couple years, then my savings was closer to 85% of my paycheck this month.
I recently went through this crisis of "what even is savings if I'm going to spend it some day??" so I appreciate the timeliness of this episode!
I “save” with an assortment of sinking funds.
The way I do it is I have my main savings accounts which for me currently is 1 High Yield Savings and then emergency cash I kept under my bed. I Have a category group where I allocate the total amount of savings accounts money too that way I can still allocate that money into categories and organize but I can till make sure Im not spending money on my debit or credit cards that isn't actually in my checking account
I did an end of year report for the first time. It was kind of random, as not sure what its hood for. One number i gave myself was the total in my sinking funds (not including monthly expenses). $16k. Gobsmacking. I guess if someone asked i cpuld call that ‘my savings’. Doesnt feel meaningful, just interesting. (My category balances are meaningful.). Maybe if i add up again next year if the number is up or down that might be interesting.
Wow... No such thing as saving... My heart skipped a beat. I enjoy saving money. Makes me smile, smile, smile. 😊
But if you are funding your categories each month…. You are saving money! “Every dollar is a savings dollar” they said in the video 😊
But what if you save for things but like the savings so much you don’t actually spend the category? I will rarely spend whatever I have allocated and saved for!
Sounds like a new money goal to me 😉 ~Ernie
I'm approaching death and approaching having 1/2 million dollars that I'll never spend. I guess it's for my heirs. I don't mind this fact at this stage of my life. I wish my children will have easier life because I didn't spend all this money on myself. I have what I need in my life anyway which isn't much. The only thing that I want but can't have is a dog. It's not fair to the dog.
Both Erie and Ben have very bubbly personalities. I love it.
New to this channel. Is this conversation basically an alternative to investing for retirement?
No. It’s for money you save outside of retirement/investing such as saving money for emergency fund or just saving cash in general.
@@ering7733 thanks for explaining
Second! YaY!!!!!!!! I LOVE this show!
I don’t know it this exactly fits the items discussed in the video. But a few years ago, we created a category group “Food” with categories “Groceries” and “Restaurants” under it. Now every month I fund these two categories with a predetermined amount each which we decided on in January. But during the month, our rule for Food is we only WAM between these two categories. If we see we are going to spent more than average on Restaurants we only can take money from Groceries and vice versa. So for an entire year, we stay on budget for “Food” even though the “Groceries” and “Restaurants” expenses bounces around.
First! (finally)
Amazing, Ernie!
I want to get something out of these talking heads videos, but I can't stand how much talking there is for how little info is delivered. Get to the point. Be concise. These do not need to be 40 minute videos for what is really about 3-4 minutes worth of actual information.
Jessie has the rights in the YNAB Universe for the 5 minute yam bam your done talks. His are in a podcast form. The other Ben and Hannah occupy the space of 7 to 15 minute videos. I hear what your point is but I really enjoy these conversational format videos by Ben and Ernie. Conversation is becoming a lost art form so I am grateful for these longer videos.
I like the conversational videos too!
Other types of ynab videos cover the information with short & concise delivery. I’m here for the conversational format. It’s very motivating for me right now. Just what I need in my financial journey.
I love these videos!
True budget nerds revel in the long form budget content.