
If YNAB only had... A purposeful way to help broke people get a grip on managing money.

So, I've been using YNAB for a little over a month and figured I'd share some newbie perspective. Jesse mentioned he occasionally gets useful feedback from the forum, so maybe this will trickle his way as well.
As a bit of a precursor, in terms of getting started with the software, I'd say I'm getting more comfortable using it, but it was a very tough start.
Even for someone like me who's fairly tech savvy and advanced in various software products including enterprise class platforms for business, and CAD as well as web design, graphics, WordPress, SEO, SEM, etc. YNAB was very, very complicated. I also root, flash and program Android operating systems, as well as build and repair computers, etc. I can do basic programming on PLCs, etc. But... YNAB is in a league of its own as far as being really quite difficult.
I've had several support members graciously help, tried attending a class, and have exchanged numerous messages back and forth with support, but its like trying to learn Chinese for me. I don't speak Chinese, and likewise I'm not fluent in money management or spreadsheets. I'm not an accountant, bookkeeper, tax preparer, etc. Just someone who has mismanaged my money for decades and wants to do better and stop living paycheck to paycheck.
I've watched the primary/basic YNAB videos and several others from unaffiliated YouTube ynab users/teachers. I've also watched a few official ynab training videos, as well as whiteboard videos. They're all good and helpful. As for the method, I've listened to Jesse read his book several times over on Audible. I listen to at least a dozen of his podcasts per weekday. I get it.
The disconnect I believe, is that it seems like, or feels like, from a newbie perspective at least, that YNAB and Jesse are of the impression that their target market is made up almost completely of people who already understand money management, budgeting, finances in general, money software, spreadsheets, accounting and aren't broke. They're endearingly referred to as ynabers. Nothing wrong with that at all. Its just that for a newbie without money skills, I've felt like a checker player at a chess club.
I think there's a huge untapped market for ynab in the self improvement area of money management. For people like me who don't have stacks of cash and flush bank accounts, but are looking for an easy, simple system to help them stay afloat another day, or week, or month and and hopefully get some financial peace of mind quick fast and in a hurry.
Anyway I've felt better having at least some sort of budgeting tools, and having gained some methodology from the training, videos and software. But, here it is, another paycheck and I'm still dumbfounded as to what to pay with it. Mortgage? Credit cards, or?
Well, that was all I had to say, over and out.
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Welcome, Silver Inspector ! Kudos to you for sticking with it for over a month! It's worth it, keep at it!
From my perspective, it took us three months to trust the software and experience some of the more hidden calculations. That was also a good amount of time for us to get in the habit of entering transactions/reconciling/working through priorities.
I will say that I hope the YNAB team does pay attention to your feedback, because one of the company's stated goals for 2019 was to have better on-boarding/teaching materials. They've definitely overhauled their articles and videos. However, as someone who started in the Fall of 2018, I don't think I would be as successful starting now as I was then.
It seems that, in an effort to make the learning process less complicated, the training materials are over-simplified, separated, and presented without the context of WHY. Why do the math operations work the way they do? (The Move Money Tool is not magic - it streamlines actual math) What parts affect which other parts, and why? (transactions, TBB, budgeted, activity, available, month roll overs) Why do we approach the budget process this way? (Rule #1, Rule #2, Rule #3, and the previous Rule #4) What are some concrete examples of scenarios for approaching the budget process? (Obviously, YNAB can't represent every single financial experience their users will have, but multiple, real situations and the processes used to deal with them in YNAB were very useful for me. In trying not to "exclude" people {my assumption - why else would they remove useful material?}, they have taken the meaning out of examples {if concrete ones are used anymore}. I firmly believe that people can actually apply the logic of someone else's scenario to their own, and if they need a bit of help along the way, that's fine. But taking away the concrete examples makes it harder for people to clearly see how the abstract principles should be applied in their own budget).
I don't recommend YNAB at this time, mainly because I don't feel that people will be successful without me teaching them, and I simply don't have the time. I can't send them a link to the "Budgeting When You're Broke" video that my friend sent me. It's gone. I can't send them to a single article that will walk them effectively through the method and its application, like my friend did. She sent me those, said to call if I had any questions, and off I went.
Now, the "Learn the Method" article (if you can call it that - it's just some colored boxes that expand) and video are the most disappointing bits of non-information I have seen. If I didn't already know them, I would not have learned what the 4 Rules really were and how they worked. I took the classes this summer, just to see if I could recommend them. I think Dave is a great teacher. I also think the classes are designed for remediation - people who need some extra help in real time to figure out the math applications needed for the method. No big deal if you need that - do whatever makes you successful. I think that I don't have two hours during a work week to spend waiting on four 20-30 minute classes to learn the method, especially if I don't already know the right questions to ask. A good pedagogical principle to use is "whole, part, whole" - the current 4 classes on the 4 rules are good for individualized focus on the parts, but in order for them to be effective, the student should have an understanding of the whole to start with and refer back to. To compound the problem, if the learner doesn't know the "whole" method and how the "part" fits, they won't know what kind of questions to ask in order to learn the "part."
The beauty of that specific "Budgeting When You're Broke" video is that it went over the whole method, walking through the steps of interacting with the program in concrete situations, and showing a few key scenario types where the process could better support the overall financial goals. It also looked at what you wanted to be working towards and why. This overview with examples took about 20 minutes, not 2+ hours. I'm sure they took it down because it referenced the old Rule 4, but that is a pity.
tl;dr - YNAB's overhaul of educational materials has diminished their pedagogical quality by trying to over-simplify and put conceptual abstractions on the same level (ditching the "whole/part/whole" approach). This is because the Rules changed, rendering previously good trainings "obsolete." I also think the new Rule 4 is simply not as powerful and takes a level of fundamental meaning away from the process, thus leaving less to teach.
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If you want my advice (but there are other, more experienced, and smarter people out there), here it is.
0. If you had "savings" in whatever previous system you used, put that amount in a category first. That way, you don't get excited thinking that you have more available for fun things than you do (voice of experience).
Each paycheck, use Rule #1 and Rule #2:
1. Budget for and pay your bills. These are known amounts with known due dates.
2. Budget for and pay for variable expenses (groceries, etc.). These amounts change and are typically purchased multiple times throughout the month.
3. Budget for known "True Expenses" - long term bills/annual subscriptions/vacation, etc. with known amounts and due dates.
4. Budget for unknown "True Expenses" - contingency savings like home/car maintenance, medical expenses, and other emergencies (like job loss). You don't typically know the amount or time that the money will be needed, but you'll want something there when you do need it.
5. Budget for financial priorities. Maybe you're paying down debt. Maybe you want to use the old Rule 4 to get a month ahead (hopefully you can find some literature on that still). Maybe you're trying to beef up savings categories. Maybe you're putting away money for retirement.
6. Budget for discretionary categories. It's important to have some fun, otherwise the grind of a tight budget won't stick long-term. Some people would put this step up by #2.
7. Make sure your TBB is 0. For us in the first several months, that meant putting less than we thought we needed in some categories because we simply didn't have enough to fund everything where we wanted. Now, we've normalized some annual expenses, plus we have more realistic expectations.
Throughout the month, use Rule #3:
WAM (stands for Whack-A-Mole) ming is common, and is one of the best things about YNAB. It allows you to put the uneven puzzle pieces of life together without wasting resources. For example, in our tight budget, when we gave ourselves 400 in groceries, but needed more, we could pull the exact amount from the fuel category very easily (and hope we wouldn't need more gas - sometimes we didn't!). If, later on in the month, we needed to fill up but there wasn't enough in fuel, we could pull from one of the contingency categories or debt paydown, whichever we thought was less important.
Plan how you will budget.
It's frustrating and disorienting to try to budget paycheck to paycheck. It's hard to see the above priorities and make sure they're actually getting covered appropriately. However, the point of using YNAB is that you can refer to the category available balances to make spending decisions, so it is not good to enter data that hasn't happened yet. To deal with this, many people use the classic Rule #4 of Living on Last Month's Income. This way, they can make all the up-front decisions of Rules #1&2 at the same time, in YNAB, ensuring the priorities for the month are met satisfactorily.
If you don't have enough capital to fund the entirety of December on Dec. 1, then that's something to work for. Until then, you still need a way to plan and make sure that the $50 of discretionary money from your first paycheck is a viable choice. Some people use goals for this, but I find the goals more useful for other things.
Personally, I use the YNAB method outside of YNAB to list out what I will use each paycheck of the month for. That way, I know if my plan is comprehensive enough to get me through to the next cycle. Listing this plan for the plan (budget) outside of YNAB also allows our family to have the priority (budget) conversations at our convenience, and it further meant that we didn't have to go chasing after anything that we accidentally messed up in YNAB when fiddling with numbers. Then, on paydays, I just go down the list and record the plan that was already decided on.
From my understanding, for most veteran users, this old Rule #4 is the key to YNAB - it allows you to be intentional with the other rules. Many even say that it should be the first financial priority (then build a baby E-fund, usually housed in various contingency categories; then tackle debt; then fill the savings categories; and retirement fits in various places, depending on interest rates and contributions) because of the clarity it brings to the decision making - you can aggressively approach your goals because you never have to wonder if you're short-changing another necessity.
I did the comparison math, and decided that the interest I would save and the cash-flow I would free up by finishing debt first was worth making the plan for the plan outside of YNAB instead of "being buffered" and being able to plan the plan effectively in YNAB. I know others disagree on the amount of clarity I get from that, but "A bird in the hand is worth two in the bush."
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Silver Inspector said:
YNAB and Jesse are of the impression that their target market is made up almost completely of people who already understand money management, budgeting, finances in general, money software, spreadsheets, accounting and aren't broke.I think it's funny that you say this, because my impression is that the training materials and Rules were overhauled to make on-boarding easier for people who don't already have their financial life together. My guess is that the concrete examples were nixed so that people in "broke" situations didn't feel bad or get discouraged.
An unintended consequence is that now the tools to improve the financial situation of the people who need it most are not as strong.
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Not every topic clicks for every person. Sometimes it takes a very different explanation to make something click. That’s not the person’s fault. I don’t know that any software, short of a full blown AI, maybe, that can do things in a way that clicks for everyone, all the time.
YNAB certainly has its faults, but, in my view, it takes great pains to make budgeting accessible to those who aren’t already good at it, often to the detriment of those who are already good at it. Add in the innumerable videos and documents which go into great detail of just about any aspect of the software and I’m not sure what they, or anyone, could do to make it more accessible.
As to what may or may not be a throwaway question at the end of your post, mortgage or credit cards, in my view, depends on when the mortgage is due and how much more money you’ll have available between now and then. What happens if you don’t pay your mortgage versus not paying your credit cards? What happens if one of them is late?
There are people who can go into more detail, but that question isn’t really about the software. YNAB can’t make that decision for you.
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I agree with Move Light Sound Life , I find that so much of YNAB is geared towards users that don’t have a strong grasp on budgets and money. I think what throws people off is that they expect something more hands off. YNAB is supposed to be very hands on. You have to constantly look at it and make decisions.
YNAB cannot change how much is coming in or going out of your budget and fundamentally increasing income or decreasing outflow are the only ways to improve your financial situation. So if a user is in a super difficult financial position, it’s not realistic to expect YNAB to create quick peace of mind because the financial facts on the ground have nothing to do with YNAB. In fact, YNAB can make it seem worse because YNAB just lays it all out for you and you may have to recognize that you are in fact living way over your means and have been for a long time. YNAB is not going to tell you how to spend your money. That is simply not what it is designed for.
When you get your paycheck you have to answer the question: What does this money have to do before I get paid again? Pay your mortgage? Pay your credit card bill? YNAB will not (and should not IMHO) make these choices for you because there may be really good reasons for doing something that on the surface seems totally illogical. You are the boss of your money and YNAB is a tool to help you organize your thoughts so you can instruct your money.
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Thanks for the replies. I didn't know about the initiative to make it easier to get started. From reading the replies, my guess is that there are 2 camps, (maybe 3), among YNAB users.
The first would be those who have been using YNAB for years, grasp the fundamental envelope principles and use the software as a tool to manage money. I imagine most of these folks would be using something else and would be fairly successful at it, even if YNAB wasn't around. Perhaps they are inherently self disciplined savers, may have already budgeted and have likely used some tool to manage money before, from their checkbook register to a software system. They may already be good at paying bills and are not in survival mode 99% of the time. Maybe they were taught by parents to manage money or developed it on their own at a young age. < I don't fit in this camp. Public schools didn't feature fundamental personal finances in their curriculum when I was young and my parents kept everything financial related to themselves.
The second would be those who maybe didn't know, or didn't know better and then somehow found and utilized YNAB's principles and software to turn their lives around. I picture these folks being pretty confident now, having overcome most deficiencies in their finances and moving forward with an in depth understanding of how it all works together. Maybe at this point they're mastering nuances of the YNAB system as a whole, but probably aren't in survival mode. If anything, if that were ever the case, that's a distant memory. < I don't fit in this camp, but hope to someday.
The third would be those who have made or not made plenty of money, have never been taught or just ignored personal money management skills, but have made a mess of their lives financially. Ignoring bills, over spending, maxed out on credit, bankruptcy, changing jobs or careers, not implementing any money management skills other than checking their bank's available balance. and therefore live day to day in survival mode. Maybe they have tried methods or software in the past, but have pretty much given up and caused even more money problems for themselves. Or maybe they made plenty of money and paid most of their bills but operated week to week and have had some life event that sent them into a financial tail spin. Now, they have come to realize they NEED a budget or way to manage money and are seeking ways to do that, (and probably looking at things like debt consolidation, debt management, bankruptcy, career changes, (moving, changing their identity, running away, lol) --- < That's the camp I would fall into, along with roughly 75 to 80% of America. (a super huge market for YNAB to tap into)
When I found YNAB and started it, I was expecting something completely different. I certainly am not disappointed, because I can tell YNAB really cares and has spent a great deal of time and no doubt money, trying to help people learn how to manage their finances. Accepting that it is what it is, and only by embracing it and making good use of the resources will the user be successful is key. I personally am giving it everything I've got. Unfortunately for people in camp 3, its more DIY than they probably expect. and therefore they (we) are more apt to give up quickly and say forget it. Like being a new home buyer but instead of a set of keys and a moving truck, you get a load of lumber, building supplies and a "How to Build your First House" book dropped off in an empty lot. Don't get me wrong, its super important that people understand how money should be earned and spent. They wouldn't be in a precarious financial position if they knew the basics and were self disciplined. But for people in camp 3 (a wayyyyyyyyyy bigger market for YNAB than those in camp 1 and 2), it would be super cool to have a way to attack immediate pain points with a system designed for getting a handle on your money quick and easy.
My greatest success financially was actually back in the late 90's. By using Microsoft Money 95 (at that time it was tied directly to the bank via a 56k modem so what I saw in my financial software was the same as the bank teller could see), and a spreadsheet I had cobbled together that used a priority principle. Basically I had cells setup in order of importance, that would populate with whatever funds could be allocated based on my most recent paycheck I plunked down at the top in an income cell. When the money ran out, anything less important didn't get funded. I could only spend what I had on only the most important things and I used the MS Money to track everything. The spreadsheet was fundamental in getting bills paid, getting some credit cards paid off and saving money for closing costs on a new home. Like everything technology based, Microsoft over designed their software to the point that it was no longer useful and I lost my spreadhseet that was on a floppy disk. That's what I was hoping for in YNAB, but more modern and automated. Like a Turbo-Tax style software for getting a grip on money management.
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I always hesitate to share how I do my budget because I figure maybe it was obvious to everyone but me in the beginning. I just know that when I started, saying to myself, "what do I have to fund before I get paid again?" didn't really work. It was still just so much guesswork for me. I had several false starts because of it. I was constantly just shifting money around because I was underfunding some categories and overspending on others and I was whack-a-moling until there wasn't enough money to whack-a-mole anymore. It was frustrating, I didn't feel like I was getting anywhere, and I quit several times.
I had to get very granular for it to work for me. I laid out all my categories from highest priority fixed amounts, to lowest priority variable amounts. I put the due dates and amounts on the line with the category name. And then I calculated specifically how much would have to go into each category from each paycheck for them to be fully funded every four weeks. If you have one source of pay, that's pretty easy. You just divide by four and that's that. But I have three income sources that each represent different percentages of our total income and all three are paid on different days. So I did a lot of calculating. And then I put those numbers into the notes of each category.
So on payday, our money goes TBB, and then I hover over each category so that the note pops up to tell me how much to put in. The first month was extremely hard because categories had to be caught up. Something that was due next week had to have 100% put in, not 1/4 of that, obviously. So the first couple of months only the high priority stuff at the top got any funding and the purse strings were extremely tight on everything else. But after that, it was pain-free, smooth sailing.
It's been six years and I still do my budget this way. I know common wisdom is to build that buffer, but I have never done it. We get paid 8 different times a month, and each time I'm manually distributing the funds to each category. And I LOVE doing it. I have no desire to buffer and then the first of the month do the magic auto budget. I look forward to getting my hands in there and doing it manually. So I focused on building savings instead.
We started out where we had pennies in our bank accounts-- and even negative pennies many times. In six years we've paid off five big debts. The rest will all be paid off in the next three years. Our credit reports went from very poor to excellent. And if something catastrophic happened and overnight all three of our income sources disappeared, we'd be able to survive a solid four months before needing another paycheck. We can even take vacations now and my kids are taking private music lessons. All of that seemed absolutely unfathomable to us when we started this journey.
Like I said, maybe my method seems painfully obvious to most people and that's how everyone did it. I just know that's not what I knew to do in the beginning and it caused me to quit several times. All I can say is, find a method that works for you and DON'T quit! Keep trying, over and over again if you have to. It will be absolutely life changing.
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Silver Inspector said:
another paycheck and I'm still dumbfounded as to what to pay with it. Mortgage? Credit cards, or?YNAB doesn't exist to tell you where to put your money. It exists to allow YOU to make a plan -- using YOUR priorities, and then easily refer to that plan for spending guidance. YNAB doesn't care where you put your money, only that it does its level best to get you to put it where you previously decided that you wanted it.
Your budget, your priorities.
FWIW since you asked, just about every financial advisor on the planet would suggest paying down high-rate consumer debt before low-rate mortgage. There is also the potential for "take-backs" if you are a bit too aggressive toward reducing CC debt. Once you send it to the mortgage, you won't get that back until after the mortgage ends.
EDIT: so yes, you're probably right about some of YNAB's assumptions. Some knowledge of finances is useful. However, you're a grown-up and have managed to survive thus far, so you're not as clueless as you might think. Give yourself some credit. I suspect you already knew paying down CC debt would be better than reducing the mortgage.
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Being self employed I can relate somewhat to this, I started with a bit of capital and I was doing well for a couple of months, budgeting for the whole month and keeping all my ducks in a row.
Then payments coming in became smaller and further apart it became much more difficult to discern if one bill payment later in the month was more important than the one due now.
Ultimately the premise seems to rely on having a surplus of money to cover all outgoings for the month, if you find yourself leaning on a credit card to get by until the next income then how to manage that situation within the app is far less clear.
As it was making me more stressed trying and failing to use YNAB in the illustrated way, I ended up side lining it in the hopes I could focus my effort on earning enough that I could fit the ideal of a YNABer. Which I'm pleased to say I'm approaching doing soon, just feel sad that YNAB felt more of a hindrance than a help when I needed it most.
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I love this post!! Man are you my twin? Not only have a mismanaged money since I was 18 and got my first credit card offer. I filed bankruptcy in 2014 and still didn’t learn my lesson. I may still have a ton of debt but at least Ynab is teaching me healthy money habits by doing my budget daily and paying close attention. I also have auto sync and I make sure to double check it.
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I've had to really study the software to figure it all out. Especially earlier this year, I was unemployed for awhile and the YNAB rules just weren't working for me. If I only budgeted the cash I had, I wasn't eating, so I had to figure out how to work with credit cards in an unintended way. I eventually came to see red in a credit category, which would happen after making a payment I hadn't budgeted for, as money I had available to spend. I didn't find that in any tutorial, for good reason, but after studying how the software did things, it made sense, and at the end of the day using the software "wrong" is better than not keeping track of your money at all. Even now that my income is steady again, I spend a lot of time just looking at my categories and tweaking things and experimenting to get what's in the program to match what's in my head. Just keep working with it. I'm also a tech person and I'm still getting the hang of it after 3 years of on-and- off use. I don't think the the software itself is particularly difficult. It's just the concept of budgeting in general that doesn't come naturally for everyone.
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To me, YNAB works great if you earn enough to pay your bills and your problem is overspending. If you don't, it's not as helpful. What it is good at is tracking and helping you not make impulsive decisions. But in order to get your money under control in the first place, you need to do your planning somewhere else.
I think people sometimes sell YNAB as the only tool you need. But if you are really starting from scratch, you'll need more. Check at your local library if you have one. They can recommend some good books and sometimes they have classes.
In the books, it will tell you to track all your expenses. Use YNAB for that.
As far as mortgage vs credit card, it's not just that. Which is due first? Do you have enough to pay the minimum on both? Always pay the minimum at least so you don't get late fees. Do you have enough to pay everything else until your next check? Once you have that all figured out, pay anything extra towards the debt with the highest interest rate.
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Completely agree. I actually had a lot of anxiety starting with YNAB because of how confusing it was. And it wasn't just misunderstanding the "four rules," it was understanding what the system does with transactions in as far as debiting/crediting the budgeted amount. If I read "Give every dollar a job!" as a means of explanation for what was happening in YNAB one more time I may have to punch someone. It's been 3 months and I still don't understand many things. There is a crazy barrier to entry. Not everyone understands money and math the same. They need to figure out different ways to communicate to different people.
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YES, the first few months were sooooo frustrating. The videos are way too simple and limited examples. I had to start over twice because I kept making spaghetti out of things. I even overdrew my checking out, something I had not done in years, costing me $$, because I tried to just follow the simple advice. I agree with Cyan Drill that I kept getting the same stupid "canned" responses from the YNAB genuises that just seemed to refuse to offer me good detailed examples. But, if I kept pursuing the problem, eventually some wonderful person would actually read what I wrote, attempt to understand my question, and give me a real answer. So don't give up!!! One thing that really helped was to pare things back a little. Start with just your regular accounts. Don't try to add your savings and all your other accounts until you get the hang of things. If you like having lots of different accounts, you will just have to learn how to manage within YNAB, even though you will be told over and over not to have different accounts...very annoying. HOWEVER, I discovered I had less need for different accounts and less need to transfer money around as I got better at YNAB, and that helped too. I'm about to finish up my first full year without restarting or re-budgeting, and I'm still going to make a new budget (even though the geniuses say not to) because I have learned so much and want to make things even simpler for me personally. IF THEY WOULD ONLY HAVE A WAY FOR ME TO LOOK AT MY "MOVE MONEY" HISTORY it would really help!!!
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I agree, the learning curve is steep. I've had to learn quite a few different programs, systems and methods over my career (in Finance) and remember taking that leap of faith with YNAB that happens when 'you don't know how this will work, you just have to trust that it will.' I had used enough personal finance programs that didn't give me what I wanted to know that it wouldn't be easy or standard when I found the one that gave me what I did want.
All that being said, I think that this:
....their target market is made up almost completely of people who already understand money management, budgeting, finances in general, money software, spreadsheets, accounting and aren't broke.
...couldn't be further from the truth. I would say this segment of the market is the exception, not the norm. So many people here in the forum, the old forum, the Reddit sub, the blog, the Debt Stories have all been desperate for a lifeline until YNAB came along.
In fact, when it comes to managing personal finances, if you've always been terrible at it, you really should feel like a checker player at a chess club when you're trying to improve. You're not just learning a new program but a whole new way of thinking! Everything I thought I knew about money had to get shut down and put aside so I wouldn't have alarm bells ringing every time I looked at my new YNAB. 18+ months later and I don't give it a second thought when I budget a full month ahead, something I never thought I'd be able to do.
Stick with it, it will get easier!
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Lavender Nomad said:
IF THEY WOULD ONLY HAVE A WAY FOR ME TO LOOK AT MY "MOVE MONEY" HISTORY it would really help!!!Agree 100%
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I dunno. I read these sorts of threads and I never want to butt in because it feels braggy. But here and elsewhere, there’s a mantra of “YNAB is really hard! It takes three to six months to understand! It’s okay if you don’t get it!” And I ultimately don’t think that refrain is very helpful because it convinces people that it should be hard. It shouldn’t be hard.
It’s okay if you don’t get it right away, don’t get me wrong. But it is entirely possible to get it right away. It shouldn’t take six months to understand how to use the budget, it should take six minutes. Even if you don’t have any experience managing money, if you can understand the idea of an envelope budget, you can grasp this.
Now, what is optimal to do with your money? That’s a different question. Does it take six months to a year before you have a budget that is humming along with everything that might come your way accounted for? Sure. Does it take a bit of a leap to accept account/category independence? Perhaps.
But the basics of taking a pile of money and putting it into smaller piles is very simple. The problem is that many people get caught up in goal this, scheduled that, yellow green etc. Or they don’t see the budget as really representing their on hand money and try to make it an abstraction.
All you are doing is sorting money, and then spending the money you sorted. That’s it. That’s the whole thing. Everything else is just ways to make that sorting and spending easier.
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OK, so I will admit in advance our situation is maybe different than most in this post. We are 74, retired, mostly fixed income and for the most part do have enough money to pay our bills every month. I’m grateful to finally be in that position after decades of not being there/being broke. However, we found we needed a better budget program to help us allocate for goals. We looked at and tried most of ‘em before committing to the program 4-5 months ago. Somehow, however, and even after much reading, listening and even one-on-one help from YNAB (who have been great), I still don’t get how to easily tell WHERE my money is that I’ve got allocated to future goals. Once I allocate all of TBB then I simply become afraid that the amounts I’ve got allocated, especially over a couple of months of building, actually exist in savings or checking. At one point I thought I understood how to check that from Quick Budget. Now I don’t and I don’t trust the system!
Hey, I recognize that our problem is less of an issue than trying to find enough money to pay bills - we were there (it felt like) forever. But this is still another example of where I’d like YNAB to be clearer and more intuitive and I’m certainly not satisfied w my understanding of it. Ive begun to think maybe it just isn’t made for our purposes and I should go back to something a little simpler? I really hope that isn’t true and that I can get thru this block because I have devoted dozens (hundreds?) of hours to this and I can certainly see the system is more than robust on many levels. Any thoughts?
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I agree with the general consensus of these posts--YNAB is meant to give you a clear picture of your money. I also agree with some posters that stated it takes a few months to really get a feel for your budget and how your money can move around. I started a few years ago, and it took at least 3 months of using YNAB to better understand where my spending tendencies were. Then it took a little longer to nail down the target amount for each category.
I am currently in a financial situation where I am paying car notes, a mortgage, and a student loan on top of the normal expenses. So I have a section that is for the essentials (i.e. food, transportation, shelter, utilities, daycare, etc.) And then a section for debts, and then the longer term items or less frequent items like doctor appointments and things (i.e. true expenses), and lastly a savings category. I split up the bills that come the first half of the months and the ones that come second half so I don't find a category that can wait until the second paycheck. This helps me manage the money assignments so I don't miss anything.
On top of using YNAB I am mixing in the Dave Ramsey principles (the Baby Steps) to get out of debt. I did not like the Ramsey budgeting app since I was already deep into YNAB. For those who are in dire financial situations, Dave Ramsey has some good materials on how to set up a budget and how to use your money to get out of debt in order to use your money in productive ways. I started my debt snowball and have payed off my truck and am on my way to get my wife's car and my loans paid off in 2 years instead of decades.
In summary though, YNAB has been a great tool to help track spending and remain flexible throughout the month, while making sure the essentials are always covered. Budgeting doesn't take as much training as it does behavioral analysis. We have to determine what our tendencies are and then evalute whether those need to be changed to be successful in our financial goals. This evaluation is why it takes a few months to get comfortable budgeting. Give yourself some grace and be patient and you'll begin to understand the steps you need to make.
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Aquamarine Transistor said:
I still don’t get how to easily tell WHERE my money is that I’ve got allocatedIts wherever you want it to be, because money is interchangeable (technically "fungible"). Read the link Move Light Sound Life posted. Several times.
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Horatio Spifflewicket said:
"oh, I'd like to get ahead on next month"If you were fully ahead, you'd probably feel differently. It all plays with the consistent budgeting It's not a "like to", it's a "until I am absolutely forced to do otherwise" kind of thing for many of us.
Horatio Spifflewicket said:
It put too much focus on planning ahead in a way that was too rigid.When "ahead" is between 1 and 30 days, I really don't think it's too fluid to have a solid Plan A. Keep in mind that there's a BIG difference between the nominal values for the month and the inter-month reallocation to deal with the "there is no normal" aspect of life.
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Horatio Spifflewicket said:
One of the things that I really like about YNAB is that it is rooted hugely in TODAY, RIGHT NOW. Money spent in the past is gone, and money assigned in the future is just a statement of intention.
So on the terminology standpoint, it's not really stealing, it's just changing priorities from "oh, I'd like to get ahead on next month" to "I really am out of fuel and have a client meeting this afternoon".This misses the entire intent of the phrase. The software is doing the stealing, not the user. The problem is YNAB makes it too easy to unintentionally pull money from a future month without letting you know about it... in other words YNAB does something that you didn't plan for and doesn't tell you about. Thus the phrase Stealing From the Future.
I can't believe we're still having to explain this after 4 years.
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Horatio Spifflewicket said:
I'll admit, it took me awhile to get here. But I've found now that I explicitly have a category for "One Month Ahead" (and also two months, and three months, etc. (not that any of them are full, yet)) that I feel a lot more zen about the random stuff that life throws at me than I was before when I was worried that buying fuel today would throw me off for next month.Give it some more time and you will discover that Two Months Ahead and Three Months Ahead are unnecessary. Income for Next Month is sufficient and then the rest can be put in an Emergency Fund or Income Replacement Fund, or whatever you want to call it. My EF contains 6 full months of expenses in addition to this month's income funding next month.
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Cut yourself some slack. It took you how many years to get yourself into the mess you're in, you're not going to get out of it overnight, nor are you going to learn a whole new system/way of managing your money overnight either.
You CAN figure this out. YNAB can help you, only if you allow it to.
First - expect that it will take you a minimum of 3 months to begin to have a handle on categories and such. That's normal. And it's fine to restructure what you have as you learn where you need more detail/less detail.
Second - after you've made it through 3 months you can begin to see patterns in your spending, you can more accurately plan for the amounts in various categories each time you get paid. At 6 months you can really begin to look at trends in your reports.
Finally - at a year you will have enough spending down to really be able to settle in and start really pushing debt repayment and other things. You can easily begin sooner, but after a year you'll know what to expect and be able to roll with the punches without WAMing all the time. From there, it just gets better and better.
This might sound a little harsh or critical, but it is intended to only be some tough love. You are obviously successful, and very smart, based on your list of credentials. So I know you can figure this out. It's a matter of wrapping your head around it, and going slowly enough to not overwhelm yourself in the beginning.
I wrote a post for this very reason last week about getting set up. You might find it helpful: https://support.youneedabudget.com/t/h49pm4/far-from-the-usuals-guide-to-getting-started
And, I'm also happy to help chat in DM's about all of this. I love crunching numbers (entirely different from doing math) and have been working with the program for 5-6 years and have figured out quite a few things that could help save you time, stress, and a learning curve. Please do reach out.