Once I was out of overdraft, YNAB finally clicked into place

Hi everyone,

I'm here to encourage everybody who's in overdraft, to hang in there. I've been a YNAB user for five years and I was deep into overdraft (no credit). Even though I soaked up absurd amounts of info about YNAB the software and the method, the overdraft made it hard for me to stay focused on getting my balance back above zero. I certainly wasn't using YNAB to its best potential in that particular situation, and for a few times I stopped paying attention to my budget (which was essentially a non-budget) and winged it, getting myself back deeper into overdraft as a result.

But now I've finally worked my way out of overdraft for the first time in six years, and I can finally use my budget as a budget and not as a spending monitor … and suddenly all the infos I've soaked up about YNAB clicked into place, because I was finally able to use YNAB like it's meant to be.

This is such an exciting time in my life because I've always been very particular about not incurring debt, but I was bad at balancing my cash flow, and overdraft is debt all the same, even if it's not credit. Actually being able to budget to zero and stop there made all the difference for me, and since I have no other debts I'm automatically in the debt-free club as a bonus, and I can focus on aging my money.

So this is for everyone who's in overdraft: Keep going. Don't slip. Keep reading and watching YNAB and budgeting related things, keep thinking about your budget, but only the moment you're out of your overdraft is the moment all the pieces can fall into place.

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    • Peter
    • Professional Designer, Web Developer
    • lasty
    • 3 mths ago
    • 5
    • Reported - view

    Things that have helped me along the way during my last four months in overdraft in addition to an already pretty well structured budget:

    • Seeing the finish line after selling some stuff, a.k.a. the overdraft reaching an amount that's manageable to pay off within a couple of months
    • Switching to a bank with excellent online features that shows and notifies me of every transaction right away (bunq) …
    • … thus separating the account with the overdraft from my new account that does not allow for overdraft
    • Manual entry of transactions (necessary because my european banks aren't supported, extremely helpful budgeting wise)
    • Switching from a credit card that I paid off monthly to a debit MasterCard that hits my checking account directly and mercilessly
    • Getting a finance software that connects to all my banks and shows me a graph of all my balances combined and separately (MoneyMoney)
    • Figuring out a good way to record and budget for joint expenses without having joint accounts with my housemates (Splitwise as a separate budget account)

    … and finally: A Fresh Start™ of my budget the moment I was out of overdraft and had budgeted until my next paycheck

    Reply Like 5
    • TheTabby
    • Just a common cat trying to budget uncommonly well.
    • TheTabby
    • 3 mths ago
    • 3
    • Reported - view

    Congratulations on getting out of overdraft!  I'm from the other side of the pond, so the best understanding I have of overdraft in the UK sense of the term is that it's something approximating a credit card attached to the 0-line in the account, and from everything I've seen in the forums, it makes YNAB somewhat hellacious to deal with.  I have a hard time wrapping my mind around getting out of overdraft and dealing with budgeting software that loses it's mind at the end of every month because it doesn't know how to handle the way my bank account works.  I salute you, sir.

    Reply Like 3
      • Peter
      • Professional Designer, Web Developer
      • lasty
      • 3 mths ago
      • Reported - view

      TheTabby Thank you. I have all my bills set up as direct debit, meaning they get requested from and deducted from my checking account automatically by the respective companies, including my credit card bill which I paid in full every month. Being in overdraft in that sense basically means that the checking account will handle direct debits beyond the zero-line and will automatically carry a negative balance as a form of credit. So with a negative checking balance my To Be Budgeted amount was permanently in the red even at the start of a new month to varying degrees, making it very hard for me to judge my progress during a month and only really having any sort of overview month-to-month.

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    • Khaki Storm
    • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
    • Khaki_Storm.1
    • 3 mths ago
    • 1
    • Reported - view

    Congrats! Great encouragement! 

    Reply Like 1
  • Congratulations Peter ! Working your way out of overdraft is an amazing accomplishment. Thank you for sharing your story and insights with us! I'm happy to hear that things are clicking into place. 🎉

    Reply Like 1
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