3 weeks in
I am three weeks into YNAB and for the first time ever I feel as though I have a sense of my financial situation. I have, for the past number of years, been living an erratic financial life - making excuses based on insecure employment to simply cover day-to-day expenses without keeping too much of an eye on the future. I really don't have a clue but since the start of the year I have been going through my accounts at the end of each month and building up a picture of my spending. This was really helpful when setting up my budget as I already had an idea of my approximate spends in each category. I inputted all my June outgoings when I started, so although I have been using it for three weeks this reflects conclusions based on a month of spending. There has been a few wins:
1) I went through my financial paperwork, identified gaps in my records and also chased down some long overdue payments. At the end of the month the first of these came in, will see whether anything comes out of the others (annoyed at past self for being so pathetic about chasing these but at least I am now confronting it). Simply having more contact with my numbers, forcing myself to open and check my bank account, look at bill rates etc is going some way towards me feeling less stressed even if the learning curve re. the financial information feels very steep.
2) Learned some hard truths with regard to my spending. I have a limited amount of money and a need to save intensely for some future salary cuts/unemployment. Previously I would have spoken of 'expensive months', when I needed to pay for a few days away, a new item, a gift for a friend etc. I never really confronted the fact that almost every month has an associated unusual expense. YNAB has helped me frame this in terms of true expenses and I have set some rolling goals to contribute to short-to-medium term goals like clothing/holidays, as well as longer term ones like Christmas (this year and next!), saving in advance for my healthcare deductible, and even putting some money aside for a computer in the distant future. On the one hand it is stressful how much money needs to be allocated to these true expenses (I anticipate more of them every day!) and it's frustrating to feel like my money is ringfenced in advance. Money feels very scarce (but it is). On the other hand, I do see the point in that short term inflexibility leads to long term flexibility. What keeps me going is the thought that instead of feeling unhappy and stressed about gifting in the holiday season this year I could instead feel genuinely ready to spend the money I have been saving up on my loved ones - it's weird to be thinking about that on the last day of June but there you go.
3) Attempted to shift from a tracking to a budgeting mentality. While I had a sense of where my money was going I didn't have a clear picture of when and how I was going over my mental allocations. This is going to take time to adjust to - but today, for example, I was heading towards the final cents of my June budget and had to cover one more bakery trip. A quick calculation in the queue led to me buying the still delicious but slightly cheaper bread and coming in just that little under. Watching the small purchases is as important as watching the big ones and this is something I really need to get my head around.
4) Honestly looking into my savings. Rather than regarding them as a (not particularly big) pot of cash to be spent I tried instead to work out what proportion of them should be allocated towards retirement, providing a buffer against salary drop/unemployment, and what portion I can legitimately spend. I'm not delighted with the numbers but rather than being disillusioned with my past self I simply am adopting a 'better now than never' attitude with regard to saving and hope that it pays off.
Sorry for the long post - but already it's a big shift for me to even write and think reasonably about my money so it's useful for me to express some of how I feel! Hope this helps those of you out there who are thinking of starting or in early days with your budget.
So much progress in so little time!! You are doing awesome 🙂 I went through the same refunds chasing period when I started YNAB. For some reason I used to be embarrassed about having to ask or no amount seemed ever big enough to justify the hassle... But knowing exactly what I would/could do with the money removed a lot of the feelings - it's just a business transaction, I was due that refund/discount/whatever and huh I totally needed it too for the budget 🙂 Wishing you many more wins to come!
Feeling a little down as one of the chased payments resulted in nothing - too much time had passed (reasonable). The news forces me to confront some of how I have felt about money over the years - how overwhelming financial stuff has often felt, how impossible it seemed to check balances, go the bank, and also, perhaps, how the payment was connected with my own low appreciation of the worth of my services - looking back that money was a poor return on the work that I did but I obviously never felt I deserved it enough to demand it! Trying to to feel ok-ish about this. It wasn't a huge amount of money and the important thing is that I am now trying to change my habits and relationship with money. I can tell this is going to be a long work in progress...
3 months in! Not sure how that happened ;-) Now a fully fledged subscriber (I had a 3 month trial) and feeling very happy with the system. Revisiting some of my thoughts at 3 weeks in...
1) the sense of control over my finances has remained. Filling in outgoings regularly, keeping an eye on my account and bills and generally 'managing' everything has been illuminating and while I think I will never at ease with these calculations as I'm much more of a word person there is a comfort in not being quite as bad as I thought I would be. YNAB really has made me feel less stressed about my money.
2) I am still struggling with the true expense saving, simply because it is hard to anticipate everything I need in the medium term so this list seemed to be ever-growing for a while which made me feel as though the budget was strained. Nevertheless, over the past few weeks I haven't added anything new so maybe this is settling out a bit. I still find it a bit hard to combine the abstract with the practical - e.g. I calculated all the true expenses based on monthly averages but from time to time a bill has come up which if I kept going with this method I would fill without effort in a year's time but struggled to get the cash together immediately for. On the occasions when my spending was in jog with the savings in the true expense categories, knowing the money was there was actually really satisfying.
3) Those hard truths aren't going away. Over the last month there has been some overspending due to changes in regular routine. On the plus, I am now fully aware of where the budget drains are and if I need to reassign money from one category to another then I have a better sense of what my priorities are. It has also made me more aware of things I have recently spent my money on. For example, I have been making more of an effort to use subscription services I have so I can determine whether they are really worth renewing. Recently I bought something impulsively and to encourage myself to keep using it regularly I have arranged to 'pay myself back' for it over the next year so I am constantly reminded that I spent the money on it.
4) The honest examination of my savings has continued. I am grateful for not having a head-in-the-sand mentality any more about the demands of the medium- and long-term future. Coupled with this is a better sense of what my money could be doing for me. Knowing what I can regard as 'not to be touched' money (like retirement savings) and what can be regarded as 'this could be spent if I had a really good reason to do so' is helping me think about more creatively and realistically about my future. This is new for me!
It is too early to make conclusions regarding how much I have managed to save pre-starting YNAB (I would need to be doing this for a longer period to have meaningful averages to compare). But haven't lost the momentum and clinging to the sense that doing something is always better than doing nothing. Hope this helps anyone who is in the early stages or interested in starting off with YNAB.
I got an email a few days ago reminding me of my six month YNAB-aversary. I could not be more grateful for this programme which has completely transformed how I feel about money. Updating my original thoughts at 3 weeks and 3 months and I really hope these might be useful to someone who is considering joining.
1) I have continued to educate myself re. my financial paperwork. In some cases this was clearing up annoying administration tasks like updating phone numbers with providers, in some cases it was actually going through the nitty gritty of the fine print and working out exactly what I was paying for and what I could cut. I can face into 2019 knowing that at least my files are in order, come what may! I still have one big scary task to do regarding a long neglected bit of financial business but I am feeling in a better place to find out the information I need to progress on that task and intend to make some progress on it in 2019. Most importantly I am trying not to beat myself up so much and there has been fewer middle of the night panics of late.
2) The biggest lesson continues to be learning that all months are expensive in some way. I am better at anticipating sporadic outlays and I am trying to keep on top of true expense categories. I might not yet have had time to actually go and buy gifts, but the money is there to cover Christmas (and I even have budgeted right down to a granular per-person level using this system! https://www.huffpost.com/entry/the-best-christmas-budget_b_4398943). More importantly getting a sense of what my outlays are has given me scope to plan for my unpredictable employment future and feel better prepared for future job/career transitions.
3) I think the constant (manual) tracking of purchases for the past six months has made me more careful with living within budget. It's not easy, but I have money for what I need and for (enough) of what I want. Impulse purchases have slipped through the net, but I am more conscious about looking at the emotional reasons behind these and that's important. I have also been ruthless with cutting some subscriptions and clearing up other account drains.
4) I continue to save. I intend to sit down at the close of the year and take a look at how my savings over the past few months compare to how I was doing before YNAB. It has been very important for me to be able to look beyond the number in the account and instead think 'what does that money need to do for me?' It's motivated me to protect the savings categories and also to feel a bit more peace about my financial future.
In short, it's better to be late sorting these things out than never to get around to it. I am 100% committed to continuing this into 2019 and hope to be back to update again in six months time!
Back a little early to update this as officially I didn't start YNAB until mid-June 2018, but I did fill back my expenses to the start of the month so I am finally on the brink of sitting on the top of a year of data! YNAB continues to be transformative. Aside from rare times when I have been travelling or figuring out reimbursements when away I have kept up to date with it on a daily basis and I have always made the effort to catch up. So (again!) I am updating my initial thoughts in the hope that they will be of interest to new users - certainly it is interesting for me to look back on my progress!
1) Control over my finances!!!!! This has been so hard won and YNAB has been an eyeopener. Transformed is such a strong word but it is the right one for the progress I have made. I have gone from complete financial illiteracy (as in I wouldn't have hardly been able to tell you my salary) to genuinely having a realistic sense of where I am and where I need to be. I still have some things to iron out but I can see myself moving to 'managing' my money in the future and dipping my toes in investing. Having some insight into my personal finance made me less scared of finance talk in general. I am far from perfect, but I am better than I was and feeling overall more confident in my choices.
2) Initially I really resented the YNAB philosophy of sinking funds and budgeting for anticipated future costs in a cumulative fashion. At the beginning the number of categories which all demanded attention was so overwhelming and I felt like I never had enough in any of them. Switch to last week where I bought two pairs of shoes in about ten minutes which were fully budgeted for. Yes, I had saved the cash for a few months and thought carefully about what I needed, but in the moment of deciding I could make my choice based on whether I liked the shoes or not, not whether I had the money for them. I can't describe how liberating that was! Not only was it great to know that the money was there - but I also enjoyed making the decision in an atmosphere completely free from financial stress. Yes, there is still an unpredictable quality to every month, but I have been able to spot some patterns and tweak the budget as I went along and now things are running little more smoothly :-)
3) I have been a manual tracker from the beginning and i appreciate it still. It continues to be useful for discipline (particularly for keeping too many small purchases from slipping through) and checking in on my categories has really helped me prioritise my spending. I have been living the philosophy that I can have anything, I just can't have everything, and it has proved a good rule of thumb. Tracking things like grocery spending has helped me keep an eye on potential lifestyle creep and also evaluate appropriately the value of things like our recent purchase of a CSA share. And I have to admit that I am now geeking out over the ease of comparing the reports on various categories in YNAB - it's so interesting to have a year of data to examine!
4) Saving, the big un... I was always good about chucking money into my savings but it was whatever was left over, not a premeditated amount. Now I transfer a set amount at the start of each month and actually have longer-term goals of where I want to be. Mentally breaking down my savings into what is for short-, medium-, and longer-term use really helped me. And yes, looking back on the data of the last year I can see that my rate of savings went up. Comparing a rough average of what I was saving prior to YNAB to what I am saving now (and adjusting for a salary increase) I think my rate has increased by about 3%. So not only am I saving more in absolute terms but I am also saving more intensively. In practical terms this has been very reassuring as I am struggling to find a permanent job and I need to know that I have a financial cushion to give me some mental room.
I can't praise the programme highly enough, so thank you YNAB! Hope this review is helpful to someone out there who is hoping for a new start :-)