The epiphany of a first month YNABer
Now this is a long post as I have a lot to say...
I hear about YNAB year or maybe two ago, downloaded the app just to realize there's a cost (in general I don't pay for apps) and decided to forget it. Why??? Oh why???
In december I heard another praise and while grinning every time I remember my bank account and credit card balance (oh boy did Christmas really get me!) I decided this is a thing that needs to be checked. Set my account, made my budget and decided to commit to this at least few months to see how it goes.
And it goes well! Seriously, I love it so much all my friends are probably already tired of me budgeting. I just started my second month and this is what has happened so far:
🤓 I've been watching the tutorials. A lot. Hannah makes everything so easy. Who knew budgeting could be funny.
😇 I decided to go to the bottom of my spending habits with making categories for everything. Even my cat has his own. Which has actually been kind of relief as first few days in with very tight money I realized that when I look at my groceries budget I don't have to count his food in it. That is all mine. ALL mine. No counting how much his food and stuff are just checking one balance and going with it. And then checking his.
🤔 My payday is in the middle of the month, quite solid amount every month. First I was a bit confused how to make it work in YNAB but then I figured out a solution that works (well, for me it does). I budget the fixed expenses to the month they are paid on AND divide the variables for both months. For example, my groceries budget is 220€ so I budgeted 110€ for last two weeks on Jan and 110€ for first two weeks of Feb. Now, when I check my budget I don't have to think so far, just to make it last two weeks. Same goes for household, cat, car and so on. Basically, I went from four week cycle to two week cycle.
🤓 I'm a nerd. I've probably always been, but this fact has just dawned on me. I love Excel. So, I made a shadow budget. That's the place where I divide the sums for two months, see if there's extras to be covered or to cover with and pre-budget everything to cover my expenses while planning what else I can use the money for. And I love just playing with it planning ahead while waiting for the next payday... But this works for me, it helps to make more sense and keeps me interested.
😌 Low salaried. That's me. For everyone who says their income isn't enough for budgeting I say it's even more crucial thing to do. Any money can be budgeted but budgeting doesn't make you money in a whim. There is no easy way out. It takes a bit work to find your extra money hidden somewhere. I've decided to take this journey step by step. The first few months I'm trying to make ends meet (have a big bill coming in in the end of Feb), track down my spending habits and learn how much money I need for my variables like groceries. Next step is to pay off my credit card debts and start creating buffers for medical, car and cat emergencies. And after that I will start looking into the possibility of some savings.
💰 Just like before, I'm still looking forward to my payday. But not because I've been broke for the quarter of my pay cycle. It's because I can't wait to budget all that! 🙊 This first month going on with my budget has actually been a relief. I have everything covered and I can see easily how much money I have for various categories. In the last week it might not be much and it'll be tight but it'll be ok.
Now to everyone who read this far, how many times per day is it ok to check your budget? Is, um, like 5 times too much? Asking for a friend... 🙊
Sounds like you've got a good system down already, after only a month. Breaking out your cats food vs your food was a good call, and starting a cat emergency fund is good thinking as well.
To answer your Q at the end, (besides every time you make a purchase, to check the balance in your category) I won't tell anybody if you sneak a peek every now and again, just to look at it, and see how your money is working for you. Sometimes it just helps you feel a little more secure knowing that all your planned expenses are covered at least until your next paycheck comes.
Looks like we started right about the same time. My cat also has her own category (two actually. "😻 Beaker Care (regular)" and "🙀 Beaker Care (medical)"). Also pretty low-income, though it's plenty to live on if a huge percentage of that income isn't going to past Me decisions... but congrats to us both for choosing this path when we did. Honestly while I'm enjoying the rush of a new budget and watching ALL THE VIDEOS and reading ALL THE ARTICLES, it will be really nice when YNAB gets boring and I'm thinking more about my long-term and fun goals rather than just the immediate future.
It sounds like you're off to a flying start! Well done!
I agree, the realisation about what your budget actually needs to cover can help you out a lot with cashflow. I used to struggle a bit, then it occurred to me: Why am I budgeting for the utilities bill I pay after payday, before payday? I think I was in a rut where I was looking at the 1st of the month as the start of my monthly budget, when actually it's the 25th of the month when I get paid. The first bill my paycheck has to cover is the one on the 27th of this month, not the 27th of next month.
Of course, the goal is to get a month ahead, so I'm budgeting for the 27th of March when I get paid on the 25th of February, but I simply don't have the cashflow at the moment and YNAB has helped me visualise this so much better. Hannah's video on getting a month ahead is very helpful.
On the subject of how much is too much... You can't have too much of a good thing!