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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  • WordTenor said:
    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. 

     This is probably the most clarifying statement I've read about how YNAB works. I can say that in retrospect, after using YNAB for  8 months. What I wish someone had explained to me in the very beginning, way before goals and colors and all that other stuff, is how the envelope system works. I had never heard of it before (of course, I had never used any budgeting before so that's not surprising) It becomes a very simple concept once you understand that it's all about sorting the money you currently have. Period. The bells and whistles are nice (some of them, anyway) but that's not what YNAB is about. If someone had explained to me that all I needed to do was take every dollar that I had to my name, add it all up, and then decide what envelopes I wanted it in, I think I would have understood the concept quite easily. Instead, I got caught up in how credit cards work, scheduled transactions, goals and all that other stuff BEFORE I really understood what it was I was trying to accomplish.

    As it turns out, I did figure it all out but it took me a while because I didn't understand the basic concepts behind the software. Yes, give every dollar a job - I get that now, but in the beginning it didn't make a lot of sense.

    I wasn't in debt when I started using YNAB, but I was in the middle of a divorce after 30 years of marriage and feeling very vulnerable financially. YNAB has clarified not only what I actually have, but also what my priorities are in terms of that money. I used to spend money willy nilly, never really going into debt, but every month when the Amex bill arrived I was shocked at how much I had spent. What gives me the most gratification is knowing beforehand what my bills are going to look like and then having that amount ready and waiting to be paid out. It has forced me to think about what means the most to me, plan it, and then follow the plan. The rest is just added frills.

    Like 9
      • jenmas
      • jenmas
      • 1 yr ago
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      KnitPurlKnit Did you start using the program before reading the stuff on the website? I didn't click on the "start the trial" until I had read through most of the stuff on the website that explained the four rules and the methodology. I also immediately took the training rather than trying to figure it out on my own.

      Like 2
    • jenmas  I did the same, read lots and watched video's beforehand. But I recognise something in your post as well KnitPurlKnit ; some things just only start te make sense when you have some context. I vividly remember lightbulb moments on this support forum :-) Though it'd be hard to know for sure which things I learned at what moment.  I already had the long standing habit of tracking my spending. Even that helped I think. And the fact I normally don't use creditcards; once you understand the way they are handled it's not too complicated, but that's the case with just anything, right? Once you understand.... Then all this gets mixed up with the really new and personal questions; what are my priorities really? And how do I figure them out? Why do I find naming them so difficult?! That's ridiculous! there're mine after all.... And that in a situation that apparently gave a reason to look for more clarity, security or whatever; my job being insecure (and that in turn caused by having been ill) was a big reason behind wanting to change my former way of handling money. So priorities shifting at the same time as learning a new way to look at budgeting and getting familiar with the program.

      Don't you think we're all doing really well?! 😄 And learning any quicker just doesn't seem possible. Some information didn't make sense to me in the beginning. I'm sure I overlooked some. And that's allright.

       

      And  KnitPurlKnit ,  your comment is very valuable to me in a practical way: my mum, who has always been anxious about maths and has left finaces to my dad who loves all of it, gets nervous  (with lots of anxiety and shame) whenever thinking of maybe having to manage any of it without him some day. From when I found YNAB I sometimes thought this would be ideal for her as well. But I realise now I should't step over the envelopes too easily. They brought me clarity too, but I already take that for granted and get exited by how well made the program is. She certainly wouldn't.... So if she'll ever use it it will be because of the envelopes.

      If that day will ever come is questionable in reality. Because my dad, like I said, manages all the money and just LOVES his spreadsheet. A few years ago he made clear he didn't agree with the way my husband and I handled our finances. So, thinking he would be proud of me when I started using YNAB, I showed it to him, all enthousiastic. He didn't like my new way either... Maybe be bit better than the old? But if so, he hid that. No, his spreadsheet is the way to go. 

      I am like my dad really, I realise. He's convinced his perfect spreadsheet is just that and it's my mum that has to start understanding. And I too have found her the perfect and foolproof solution. HAHA.

      Oh well, I just like YNAB a lot.....

      Like 1
    • jenmas I actually read the book first, then listened to a bunch of videos to try and get a handle on it. I also took several of the training classes. What I learned first was how to use the software, but not really the meaning behind it. That part was lacking for me until, as Powder Blue Pony mentioned below, I had some context. My first budget was a joke actually, as I had never in my life tracked expenses so really had no idea what I was spending on, other than the fixed items that appear every month. After the first couple of months, I made an entirely new budget because I was starting to get an idea of what my true expenses were. As time went on, and I started reading the forums (they have been extremely helpful for me and probably taught me more than I learned anywhere else), I had a couple of light bulb moments that significantly changed things for me and made things much clearer.

      Powder Blue Pony said:
      your comment is very valuable to me in a practical way: my mum, who has always been anxious about maths and has left finaces to my dad

       Funny you mentioned this. I was the one who managed all the finances in our marriage. Paid all the bills, negotiated the mortgages, bought the cars......my husband used to joke that the only money he was aware of was in his personal IRA and pension plan. And if I died, he wouldn't even know how to pay the bills, log on to online banking or where the money was. Obviously, that changed drastically when we split up and we each had to manage our own finances. The divorce was very amicable and once we had come to a settlement (which we did totally on our own without any legal assistance), that's when I started feeling financially vulnerable. Not because I didn't know how to do it but because all of a sudden, here I was, totally on my own, without having to think about what anyone else spent or wanted. And was I going to have enough money coming in on a monthly basis to continue living the way we had when we were together. I couldn't even figure that out because I had never tracked anything financially. How much did I really need? I had no idea what I spent on groceries, on clothes, makeup, or any other real expense. That's where YNAB came to the rescue for me. It's 8 months later and I'm still tweaking the budget but YNAB gave me the ability to see that yes, I do have enough coming in to live comfortably. The difference is that now I know where every dollar goes and that has helped me to feel way less vulnerable.

      Like 3
    • KnitPurlKnit this is a learning curve that seems to be true for many people. It takes time to build up the context, as you're using it. I wrote a getting started guide, because I noticed there were many things that I figured out after the fact that I wish I had someone tell me (you can find it over here: https://support.youneedabudget.com/t/h49pm4/far-from-the-usuals-guide-to-getting-started ) and one of the big ones is that I wish that someone had told me to not worry about how much was going into various categories for at least the first 3 months, but to only focus on getting the transactions in and reconciling accounts. After the first 3 months you have an idea of what you need to track, and where it is going, and only just begin to look at trends in your reports. At 6 months, you have even more data to work with and can really start to get things nailed down to a flow, and at a year you have enough data to see true trends and know where your averages need to be to fund categories for a year. It just takes time, but I haven't ever seen anyone recommend a slower approach to getting it started, which would have helped me tremendously.

      Like 1
    • farfromtheusual Wow! Excellent article.  Wish I had found that when I started!  I'm in good shape now and can't wait to start fresh in the new year with even better ways to manage my money.   

      Like 1
    • Lavender Nomad I'm so glad that it helped you!! That's why I wrote it!!

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    • Matthew 

      Wow, I had no clue this post would get this much attention.  Actually though... Jesse's got a podcast (#136 Priorities), that delves into the broke topic a bit. Its quite good and he's passionate about what he's going over, but I sense he's probably never really experienced broke like the way many of the YNAB customers have. That's not his fault, just an observation. Like his analogy of the skinny person with fast metabolism, telling someone to eat carrots and celery while they eat their third donut. Good stuff and very insightful, but out of touch a bit. That'd be like a broke person telling a wealthy person how they should mind their money.  I totally get the company's neutral stance on "How" and "what" people do with their money. Its refreshing in fact and one of the things I do like about YNAB.  However... I think they should, (or at least to the newbies that need it). Otherwise there's a disconnect between a method and tool that was created by and for someone very self disciplined who was young, had a supportive spouse, good parents, no real debt and had a good "framework" about these matters in general. I suppose the same things could be used by others successfully, (and apparently many have), but WHAT would the education material and software be like IF Jesse knew what he knows now, but approached it as many people do, when they've been broke for years, in debt by thousands, working endlessly but without any light at the end of the tunnel...  There's no way to truly know what being financially secure is without being in that zone. There's also no way to really wrap one's mind around what being broke is unless experiencing it themselves. 

      Maybe they've been living that way for decades. And now they're worn out, health is poor, perhaps they're realizing its not many years they have left, perhaps they've indebted and worked themselves into physical ailments, clinical depression, anxiety, etc. Now these folks know they need a budget and Google around looking for a quick effective solution. What will they find? Nada, because there's nothing on the market to help them. YNAB is probably the closest thing, but its really not geared to help quick fast and in a hurry, but it could be! Then the journey of long term proper money handling could take place, after the user got a handle on paying the rent lol.

      What I was going for in my original post was not any sort of slam that YNAB isn't good, (because it is), just that its not very good for broke people trying to get un-broke. Its GREAT for helping people on the slow burn journey of mastering their future finances, but its difficult or seemingly impossible to reach that launching point for many, including myself so something that would help start that process is desirable.

      Imagine if an executive at YNAB, (perhaps even Jesse), set out on a quest to freeze their assets for a period, get in debt, get a high stress mediocre job an hour drive away from home, support themselves like that for a while without any budget, no lifeline except their next paycheck, credit cards, consolidation loans, payday loans, and so on. All that only to really find out what that's like, (sort of a backwards Brewster's million's), then start a YNAB budget with little or no money, then recreate or modify money education and management tools from the perspective of their new reality -  living on the brink of poverty, with the weight of the world, as well as their own guilt and shame on their shoulders, (especially if they're also employed in the service sector to any degree - a double whammy). What would THAT budget look like? 

      I know its a ludicrous idea, to think anyone who's well off and financially secure would go backwards, but I'll bet the solution that person came up with would strike gold in the marketplace, while helping tons of people for years to come. Just a 6 month or year long hiatus of complete self imposed financial sabotage and then a few months to recover from it. What came from that experience would be truly knowing what its like to be living in precarious times with loads of debt, long hours, poor credit, and expenses that far exceed tangible income potential. What's the resulting solution look like?

      Thanks so much for your support. Its truly appreciated and I think with enough time and attention I'll learn to use the methods and software effectively. Like anything worthwhile in life, it'll take determination, work and forming new positive habits to utilize the software. I'll keep plugging away at it. The suggestion for a broke person's YNAB was just meant to be a product improvement tickler. 

      Like 1
    •  Silver Inspector I’m a doctor and have been seriously ill for about a year. I always wanted to (and thought I managed relatively well to) understand what things were like for patients. Still, that’s no comparison with being ill yourself. It has changed me, in I think a similar way to what you describe; it will always be different from the outside.

      Thanks for the insight.

      Like 1
    • Silver Inspector The challenge with this is that we can only work from our own perspectives.
      And 'broke' is a perspective that sticks with you. I totally see what you are desiring, but the difficult thing about it is that in order to not be 'broke' one can't stay in a 'broke' mindset. So you have to expand and shift into a new mindset. I don't think that the execs or those making decisions (Jesse included) need to have any more experience with debt/money struggles than they already have (I can't really wish that on anyone). I don't really know what more you desire than to have things 'fixed' and on a silver platter. It doesn't work like that. Getting into debt doesn't happen overnight, and getting out of it doesn't happen overnight either. The is NO quick fix. I think YNAB does the best job that any budgeting software can - especially the concept of give every dollar in your metaphorical pocket a job that it must do right away. Is the rent the next bill due? Fund it now. Nothing left over? Then you have to deal with it and face the fact that you are going to have to ride the credit card until the next pay day.

      Maybe the fact that sometimes there just ISN'T enough money to go around isn't talked about often enough/well enough (I have been in this position for a LONG time). Maybe they could do more to offer some guidelines for how to work when the outgoing is greater than the incoming and there isn't anything that you can do about it just yet. But all in all, that's just a situation that you have to put your nose to the grindstone and live through.

      I think the other struggle that may be coming up is that when you *actually* look at the current reality it can be pretty startling and stark. The reality check can be a sucker punch to the gut once all the numbers are in YNAB and it is suddenly really clear just how bad the situation is. That SUCKS. Been there, done that. BUT, you have to know what the situation is before you can make any changes. Know better, do better. Sometimes that road is a very long slow one.

      I hear what you are saying, and I can relate. But I will also say that it's always darkest before the dawn, and sometimes you just have to wade through. It does get better. The budget gets easier. And things change faster. In the beginning it's slow. But you'll get through that, and things will continue to improve, and everybody here will cheer you on.

      Like 4
    • Silver Inspector Hey, I didn't take it as a slam whatsoever!

      Here's what I would say. I think the YNAB Method works extremely well for people who are struggling financially. It can't work literal magic, of course—if you're working for minimum wage and supporting a family, YNAB is not going to enable you to max out your (probably nonexistent) 401k. But I've worked with plenty of customers who are in a really tough spot, and YNAB was one of the tools that helped them at least see a way out of it. (You can also read some of those stories on our Debt and YNAB Wins forum sections.)

      Having said that, I think we could be doing more to help people learn and get comfortable with the YNAB software. Especially if you're already under tons of stress because of financial, job, and medical issues, any financial software that's purporting to help you out should be as easy to learn as humanly possible.

      And that's one of our current initiatives! We've already launched our new video training series, which we're really proud of and which is especially helpful to people who just don't have time to take our free online courses at the time they're offered. And we're working on a lot of ways to make YNAB easier to learn—I can't tell you when that will happen, but it will.

      Like 3
  • I just read this reply by monkeyhanger (or is that monkeyhanger , with a 1 at the end?) and thougth it might look something like a short version of what you would like to have seen when you started YNAB. Right?

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  • farfromtheusual said:
    I don't really know what more you desire than to have things 'fixed' and on a silver platter. It doesn't work like that.

     Thank you for the reply. Again, please don't take anything I said as a negative, its simply a suggestion. I believe the core functionality of the software, and the logic of the methodology is spot on. I'm only pointing out that it simply doesn't relate to folks that are in the midst of financial turmoil currently and newbies when it comes to anything financial, but need something to help them get started. The current product really doesn't help a broke person anymore than a table saw and a box full of tools would help a housewife trying to build a kitchen island. Regardless of how many cabinet makers try to coach her, or how many books she reads or classes she takes, the project would take seemingly forever.  She would certainly be a better carpenter than cook by the time it was done, but it would be a whole bunch easier and quicker if she bought a DIY kit from Ikea. 

    If I was a software developer I could cobble together something to provide an example of what a simple way to approach this would be and share it.  With enough time, research, trial and error that's possible. But since I'm not a developer, no matter how great the computer and learning material, it would be a long hard struggle.  It would be easier and faster if someone who's already able to do that, was broke for awhile, forgot that they know budgeting and see what they come up with to get themselves unstuck. It might be the world's best get out of debt software!

    I'm thinking the issue with YNAB is primarily the overwhelming GUI, and lack of a way to actively guide the user step by step to make the best budgeting decisions based on the information they enter. I may be completely off base, but I'm envisioning something sort of like tax software that has step by step wizard style sections for inputs and won't let you claim a deduction you don't qualify for, but provides options for things that you do qualify for. Then in the end it generates a tax return. So, in the case of a budget, this super duper budgeting tool would basically take all that aggregated data and produce a budget to follow based on the situational input of the user, filtered through various rules, and proven principles that YNAB encourages using. 

    In the end I'm sure there's lots of ways to approach it, but it would be ideal for newbies at least, if its from the vantage point of someone who needs to get from A to B with limited knowledge of the process. 

    Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 1 yr ago
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      • Reported - view

      Silver Inspector Aside from the near impossibility of coding for all the permutations, or the complexity of writing an expert system, that wouldn’t be terrible. The problem, though, is that even something as complicated as income tax ultimately comes down to a relatively small number of line items, with discrete, if arcane, rules for the data that goes on that line. Such programs don’t guide you through a decision-making process — with some small exceptions, such as telling you that the standard deduction is better than itemizing, or vice versa — they merely sugarcoat unfamiliar terms and procedures. 
       

      Ultimately, a YNAB wizard would be asking you the same questions the documentation already asks you to contemplate. Yes, a wizard might get a new user into a budget a little sooner, but that user wouldn’t learn how to be budget maker any more than someone who puts together an IKEA piece learns to be a cabinet maker. And one needs to learn how to be a budget maker even if it stings a little at first. 

      Like 3
    • Habanero Salsa 

      I agree with what you are saying and I realize there's a sort of purity about YNAB, almost a cult following of the enlightened. From a more practical standpoint however, there's HUGE opportunity to help millions of people who are broke and don't likely have the determination and intelligence to see YNAB through to a point of being useful. Having a product geared for the masses could potentially be an enormously profitable initiative.

      This article https://www.marketwatch.com/story/half-of-americans-are-just-one-paycheck-away-from-financial-disaster-2019-05-16 is fairly new and reveals the massive scale that I'm referring to.

      Like
    • Silver Inspector I appreciate your desire, I really, really do, but it feels very much like grasping at straws.
       

      Silver Inspector said:
      people who are broke and don't likely have the determination and intelligence to see YNAB through to a point of being useful.

       Again, if feels like what you are asking for is a quick fix, an algorithm to tell you what to push and where, and what to spend the money on. The trouble is that just doesn't exist. Only YOU can make the decision as to what is best to spend your money on. Doing anything else is abdicating responsibility for your financial situation. YNAB (and other similar programs, YNAB isn't the only one out there) can only give you a framework to view your money situation through so that you are better informed and can make decisions easier. But there is no program that can stop you from swiping that card at the liquor store rather than paying your rent. Only YOU can decide what is most important to you. If you are unwilling to do that, then that's on you.

      The first couple months WILL be rough. If you're outgoing is greater than your incoming, then it's going to be REALLY rough. But it will change if you stick with it and you will see results. Any program that you start is going to be like that. That's what it means to be a beginner. And if you've been in debt for almost all of your adult life, then doing something different with your money makes you a beginner, and that's not bad. YOU have to find the determination and intelligence to shift your habits.

      I know where you're standing, I was there about 7 years ago. I can say this as someone who is now standing ON the line between the black and red, instead of so far into the red that the black line is only an imaginary concept. Very soon that red line will become a thing of the past, something only of nightmares. But it's been a long road to get here, and it's going to be a continuing journey forward. You didn't get in debt overnight, and you won't get out overnight, either. Habits aren't changed overnight, and so you are going to slip and slide around, making poor choices sometimes, and great choices other times. But you're here, and this is the best place to start. (and if you don't like what you find here, go look elsewhere, there's plenty of other options, too, just keep putting one foot in front of the other).
      Wishing you great success in the new year!

      Like 5
    • farfromtheusual thank you! That's good to know someone in the red made use of the tool and it sounds as if you're making a real go if it.

      Like 1
  • welcome I would not say i was massively good at money management but have found the YNAB experience painless in implementation. I did do lots of online courses in the first month and every now and then I send a question through to the support people ( Thanks again everyone your amazing) . I have found the trick is to surrender to the experience follow the rules and it will be ok.  

    I've adjusted my categories multiple times I've learnt not to spend every "spare" cent on pay day because I don't have spare money anymore its all in a category and I can spend it on that category when I choose. I'm learning to save up for things rather than putting them on the credit card.

    I am able to use my credit card for most purchases as I have a accurate record of what i've sent and can transfer the dollars , I was always worried I would rack up more debt on every day purchases before . mostly that is what i did before nab. I'm slowly learning that I can't have everything I want right now . I wish I had this program 36 years ago when I got my first after school job my finances would be very different now but I am using it now to inform my choices.

    What YNAB doesn't do is tell me how to spend my money they recommend being debt free mostly to reduce the budget busting cost of credit and loans . They recommend therefore the you spend only what you have. YNAB is a way to manage and track your money but there aren't any right or wrong ways to spend what you have excepting that you should be spending ONLY what you have  and that your should set aside money to cover predictable expenses and a little perhaps for emergencies.

    Honestly its not that complicated it took me 3 months or so to realise how simple it could be . Hope your experience improves . remember there are four rules follow those and it works out.

    Like 5
  • makaeo said:
    What YNAB doesn't do is tell me how to spend my money they recommend being debt free mostly to reduce the budget busting cost of credit and loans . They recommend therefore the you spend only what you have. YNAB is a way to manage and track your money but there aren't any right or wrong ways to spend what you have excepting that you should be spending ONLY what you have  and that your should set aside money to cover predictable expenses and a little perhaps for emergencies.

     Thanks makaeo. The snippet above that I captured, is most likely the fundamental obstacle for the newbie who is broke and never budgeted or used finance software. Just a wild guess, but I'd say the several million Americans that are in a money mess currently, will remain in that mess because there's nothing on the market to help them, that they can use, to get themselves on track. YNAB the software isn't hard to use in terms of what its capable of doing, (although this can easily be done in your head, on paper, in a spreadsheet, etc). The YNAB rules are sound, and they also could be followed with or without the accompanying software. The rules are simple, so that's not the problem.

    The problem is, that there currently isn't a budgeting/stop living paycheck to paycheck system available on the market today. Its illogical to me that a software company which specializes in that segment wouldn't want to break out of their comfort zone and employ the knowledge they teach, and the logistical method of moving money around, into a platform that would be easy to use and effective at solving an epidemic problem of consumerism, overspending and mismanaging personal finances. 

    That problem is addressed frequently in YNAB resources, but knowledge for knowledge sake is pretty useless when a person is broke and trying to get ahead. Having software that's better than traditional paper envelopes is fine, but that doesn't help solve the root cause of millions of American's financial woes.

    Here's an example of what I mean: Imagine the newbie who finally realizes they want to do something about their predicament... They might be current on all their bills, with a good credit score, but have little chance of getting ahead. Or they might be past that point and current on their bills with a fair or good credit score but its a house of cards and sustaining it is highly unlikely. Or they might be behind on bills with a poor credit score and at this point creditors are calling and the house of cards is beginning to fall apart. Beyond that, the outlook is dismal and a very short road to despair. Relentless phone calls, emails, text messages and mail from creditors or collectors. Later comes lawsuits, judgements and all the personal relational and professional work related fallout that goes with it hand in hand.

    The options available to folks in any of these categories are very limited. While one still has a decent credit score and job, they can opt for debt consolidation loans. Once their credit gets worse they no longer qualify for loans, but can turn to debt management. If they're beyond debt management programs because there's not enough regular income to cover debts and expenses, they are on their own throughout a tortuous season of desperation and harassment for months or years while they grease squeaky wheels prolonging the inevitable when they ultimately file bankruptcy.

    This space is the biggest, with the least saturation of software and solutions. FPU and YNAB are the only real players in this space and they sorely lack in a functional way to help a DIY broke person. Have they helped? Sure, they've helped in terms of recognizing there's an issue and suggest methods or habits to help. Have people benefited from them? Absolutely, there's many case studies. That's just a sliver of people though, and only those with the income and determination to tackle their personal challenges whatever they might be.

    So the way I see it, its an untapped opportunity for a company to come along and offer a system that's designed specifically to address these scenarios and provide a solution to an enormous problem.

    Like
      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 1 yr ago
      • 9
      • Reported - view

      Silver Inspector Part of the difficulty of what you’re asking is that you’re asking for a heart shift on the part of the broke person, and that’s why YNAB alone, and really no software, can do it. There’s no software that can cause someone to feel that they are capable. 

      Making people feel capable is what YNAB AOM, useless as it actually is for making financial decisions, is trying to do. FPU debt snowball is a similar construct. They are trying to show someone who doesn’t know what progress looks like, what progress looks like. 

      The information is out there on what one should do if one has no money, debt in collections, etc. It’s not even that difficult to find, these days. Honestly, YNAB, with its envelope system, is about as close as it gets to a budget system that is designed for people who can’t make ends meet. But what’s missing is the hope and the feeling that someone can do it, and no software can do that. 

      Like 9
      • adriana01
      • adriana01
      • 1 yr ago
      • 3
      • Reported - view

      Silver Inspector Silver Inspector it sounds like you want YNAB to offer fiduciary services for people who are broke. Those types of decisions normally require full control of someone else's finances, and don't actually teach the person any budgeting and financial skills. Being "hands off" is what typically got people into a financial problem, so encouraging dependence on a fiduciary or a software acting as a fiduciary wouldn't solve the root problem. It would be the same problem as when people successfully complete a bankruptcy or debt management program only to run up even more debt because they didn't change their financial behavior.

      If people want to change, the tools & information are available. If they don't want to, nothing will help.

      Like 3
    • WordTenor I think YNAB does really, really good at  being upbeat, friendly and optimistic about the whole thing, and makes the idea of money management doable.  Especially Jesse, who's book and pod casts have been really uplifting for me personally. Honestly its been years since I even took an interest in managing my money. I think that's worth the price of admission alone.  I'll continue to research and maybe try to build an app or spreadsheet that does what I need it to  and in the meanwhile use YNAB's software, so at least I'm using something.

      Like 1
    • adriana01 Hi, 

      adriana01 said:
      it sounds like you want YNAB to offer fiduciary services for people who are broke.

       No, I don't think that's the answer. I'm thinking that the software can help guide users to make the best decisions for their situation based on their inputs. That's not being a fiduciary, If the software helped prioritize based on conditional responses that would be ideal and would help the user to not only manage their money, but understand what's a priority and why.

      For example, like tax software will present a section then ask questions and provide links for additional learning. Once that section is done it leads to another, and another and so it goes until its completed. That would be super cool if money management could walk a user through their budget and help them figure out which priorities to take care of, and why. So, for example - A broke person might have $5000 worth of bills to pay that month, but they only have $3500 in pay with. So, what gets paid? What are the repercussions of not paying  a bill, or putting aside money for gas and groceries? What are benefits of paying one thing over another? What's the forecast for making these decisions and what happens next month?

      Now imagine the user glides through these decision making processes and what happens at the end is a plan of what to pay and to whom. It was a plan created by the user, so if anything they were more involved than hands off. The resulting budget, would be the best plan and the user would be much more likely to follow it, or go back and change it over and over until they have a plan they think will work based on expert guidance, smooth software and their interaction... So its definitely the opposite of hands off. The same way one needs to "think" about their tax stuff when they use tax software. 

      Those are the sorts of comparisons and logic type decisions broke people face every single day. They're not thinking about vacations and retirement. or how to pay off their mortgage. They're wondering what their situation will be like when they pay the mortgage, but not the phone bill,  and  ignore several credit cards. If they pay the mortgage they can sleep easy knowing that's taken care of, but they will need to deal with 100's of dollars in additional credit card dues next month and how will their work and family get it touch if they lose their phone? And  can they mentally handle the stress of morning to evening phone calls, texts, emails from debt collectors? How about getting back and forth to work and eating? And so it goes with a broke person and that's a primary reason they don't do any budgeting at all... None of the budgeting software and money management software out there addresses these concerns.

      Millions of American's have these decisions to make right now and therefore there's a potential for a product like YNAB to help the mainstream, but only if they see that opportunity.

      Like
    • Silver Inspector what you are asking for would cost money, which you have just identified that people who are broke don't have. It's called a financial advisor. The only way I could ever see this really working (I'd love to be wrong about this) is with a real human being guiding you. There are non-profit financial support systems out there, with real humans to help sort out these questions, but you have to go looking for them.


      Bottom line: If you want different results you have to do something different to get it. You have to be willing to seek new information, and there is LOTS of info out there. It is probably better that there is no one stop shop that takes care of everyone. Dave Ramsey has a lot of good things to offer, as do many others. There's TONS of books at the library (free to borrow!), and lots of info online. But there's no push button program because each person's situation is different.

      I'm honestly not sure how it gets much simpler than YNAB's concept of only spending what you have until you get more. So the priority becomes what bills are due between now and the next pay day? Next question: is there any leftover? If the answer is Yes, then budget that for other future things, if the answer is no, then wait until pay day to spend more money. If you must spend money before more money comes in, then know that spending = debt. If you're far below the black line, then everything nonessential gets cut.

      Lather, rinse, repeat.

      Don't make it more complicated for yourself than it already is. 🙂

      Like 3
    • Silver Inspector A key element of the YNAB Method is figuring out your priorities and that looks different for each of us.

      You can learn more about that strategy in our Prioritize Guide where you can also watch a video of YNAB teacher, Sherri, giving an overview. This goes through several of the topics you mentioned to help break the paycheck-to-paycheck cycle & get out of debt!

      Here is the breakdown:

      1. Budget for Obligations (like a roof over your head, utilities and food!)
      2. Embrace Your True Expenses (insurance premiums, holidays, etc)
      3. Deal with Your Debt
      4. Age Your Money
      5. Set Quality-of-Life Goals
      6. Just for Fun…

      We're always working on new education materials and features to help with this process. Awareness is an important element of YNAB, and it's definitely hands on. The strategy above can help determine which bills need to be paid first, and budget accordingly. The budget is the plan!

      To use your example above, they may know their landlord offers a grace period on rent without penalty—so they can budget to buy groceries, and put gas in the car. That's something the software won't be able to tell you.

      If you have specifics in mind regarding the conditional responses, and how you would like to see that implemented, please let our team know by filling out a Feature Request. Our team is dedicated to helping people take total control of their money, regardless of their situation. We're always looking to improve education, documentation, etc. and of course, the apps themselves.

      Like 2
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • 4
      • Reported - view

      Silver Inspector You can come up with a spreadsheet that will tell you the mathematically correct solution, but it may not be the optimal solution for a particular individual. Part of personal finance is psychological, and not everyone sees things the same way. So a mathematically optimal solution may not be the right answer depending on the individual.

      Like 4
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 1 yr ago
      • 1
      • Reported - view

      nolesrule Mathematically optimal might not be psychologically optimal, but a wizard/guide could present the options to the user. It would be complex far beyond anything that’s in YNAB now, for sure, but probably far less complex than a lot of expert systems. 
       

      I’m not a programmer, but given accounts, balances, due dates, pay dates, income, and so on, it’s probably pretty feasible to program an interface that that generally follows sound YNAB methodology while allowing the user to decide priorities in specific cases that walk the user through priorities until she’s out of money to allocate. Whether it’s feasible enough for the revenue to justify the cost, well...

      Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • Reported - view

      Habanero Salsa I get your point, and perhaps that is theoretically possible.  Though I wonder how well even that might work. Investment houses have these questionnaires that supposedly inform risk tolerance to help you select the correct asset allocation for your risk tolerance... even with robo advisors. Yet still these people will freak out if their IRA goes down $5.

      Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 1 yr ago
      • 5
      • Reported - view

      nolesrule Just about everyone’s risk tolerance is high until the risk shows up. 
       

      I think, “do you want to pay your gym membership or your Netflix” is more tangible, though. 
       

      I think the main flaw isn’t even technical, though. You’d really, really, really want to be sure that nothing could be construed as giving actual financial advice. And that’s tricky when that’s pretty much what you’re doing. 

      Like 5
    • farfromtheusual thx much appreciated!

      Like 1
    • Nicole thank you Nicole.

      Nicole said:
      Here is the breakdown:

      Budget for Obligations (like a roof over your head, utilities and food!)
      Embrace Your True Expenses (insurance premiums, holidays, etc)
      Deal with Your Debt
      Age Your Money
      Set Quality-of-Life Goals
      Just for Fun…

       I've actually got these engrained in my mind after listening to Jesse's audiobook 3 times, as well as about 140 podcasts. I'm also listening to a book Jesse recommended titled "Your Money or Your Life". All of it is very sound reasoning, although intangible to someone broke and in debt.

      I'll utilize the feature request if I go any further with the YNAB software. Regardless of whether or not I use the software, Jesse's worth listening to. With the new month I might try something different like Everydollar or the Simple Bank app, to try and get started with budgeting. This is my second full month with YNAB and the decisions I made last month in it have nearly sunk me financially. Not that its the fault of the software, it just doesn't pan out too well when things are super tight and even upside down. It seems like it'd be wonderful once I've got stabilized a bit and caught up on the bills. I might try it again when I've got to that point.

      Like 1
      • monkeyhanger
      • No animals were harmed
      • monkeyhanger.1
      • 1 yr ago
      • 3
      • Reported - view

      Silver Inspector It's great at any point and I'd argue that it's most powerful when you're in the red. The standard forecast type budgeting that you see mentioned on here where people budget £50/month to clothing but then carry forward any overspends into the next category is fine (but still less effective) when you have enough funds in other categories to effectively cover it. It's that approach that doesn't pan out and causes problems when the chips are down.

      The problem you often have is that people are upside down while they're trying to learn how the software works. Often you might also be learning money management altogether. The key point is that no system can change your financial situation by itself. If you're upside down, you're upside down. I find it helps to think of what YNAB represents and then search for how to reflect that in the software.

      What does help you get out of the hole is the principles behind it and you can use them with or without the software. YNAB should come with a warning though. It has a way of telling you the truth and bringing the reality of any situation into full view. That's hardly YNABs fault but it can be a little uncomfortable whatever your starting situation.

      I wrote this elsewhere which may be of use:
       

      YNAB can't magic money out of nowhere. No budgeting system can. The where the money comes from to fund your budget is always a decision outside of the budget. What YNAB can do is allocate your resource optimally.

      Think of it like an envelope system. That's all it is really. A fancy, computerised version of my gran's envelope system. These days we just have to do the following virtually.

      • Get all your cash and resources and dump them on the table.
      • Get a bunch of envelopes that represent the categories you have to spend e.g. rent, groceries, gas, electricity, etc.
      • Divide the cash and resources you have into the envelopes so that you cover the most important things first, focusing on food and the roof over your head and the bills that need paying before you get any more income (i.e. can add to the pile of money on the table). Continue until there is no money left on the table.

      If you haven't got enough money to fund everything that you need before you next get some income, what are you going to do?

      First, you would move money from lower priority envelopes. Those beers can wait if you need clothes. Those clothes will have to wait if rent is a bigger priority.

      If you don't have enough money to fund even the most critical envelopes then what are you going to do in real life?

      Remove some money from savings you said  - well actually that should have been part of the cash and resources that got put on the table in the first place. Savings (but more clearly defined) would have been one of your envelopes. If you can't fill your really important envelopes with your other money then that's the first envelope that gets raided.

      Not got enough in savings - well then you have to mirror what you do in real life. Put it on a credit card - you need an envelope to pay the credit card back? Borrow money from a friend - the same? Talk to the electricity company and sort out a payment plan? Whatever you do in real life that can be reflected in YNAB.

      That though is the simple premise that YNAB is built on. You can do it with pen and paper or real life envelopes or your own spreadsheet. YNAB just builds a more efficient bit of software to enable you to follow that method. It can't create money for you.

      Once you've got past the emergency situation, how do you make sure you that you don't get into trouble again?

      • Spend some time thinking about all the bills and expenses you have to cover in a year and start an envelope for each of them.
      • Write on each envelope the due date and how much you anticipate you need.
      • Work out the number of months (or payment events) = X between now and the due date and if you can put amount/X into that envelope each month.
      • If you can't do that each month, then you need to redo the calculation each month and increase the amount to make sure you have enough by the due date.

      Like 3
    • Silver Inspector I'd really encourage you to stick with it even if you are in the red. It can be difficult when all the "advice" and recommendations are saying don't overspend, but honestly, when the basic necessities for outgoing are higher than the incoming, you can't not over spend. You gotta eat after all. And I know how painful it can be to have constant reminders in your face of just how much debt you already have PLUS over spending every month.

      What budgeting with YNAB while in the red has done for me is kept me aware of how much I have available for things, given me peace of mind (oh, yeah, I have budgeted for gas, I don't have to worry about whether or not there is money there to get gas or not), and kept me continually striving towards the goal of being in the black. It also has given me years of data that I can now work with (I need to budget $144 for gas every pay check exactly) so that I can refine my categories to the exact amounts that I need across an average.
      While YNAB might not be perfect, it has a lot of really good qualities, but many of those qualities aren't going to work for you until you've used the system for a while. I think that is true of any system. My suggestion would be to either run a couple systems in tandem (if you REALLY like crunching numbers and can wrap your brain around it, and you feel you must "research" multiple approaches), or pick one system and run it for a minimum of 6 months and see how you feel about it and what kind of awareness/progress you've been able to make in that amount of time.

      You didn't get into the hole overnight, and you won't get out of it overnight. You've shown here that you are intelligent, and apparently determined enough to do this, so it's possible, but there's that uncomfortable beginner learning phase where you'll have to develop new habits.

      Feel free to private message me if you want to bounce ideas off about how to set up budgets and work while in the red, I'm happy to share what I've learned and worked through (most of which is mindset more than anything).

      Like 3
  • Habanero Salsa , Silver Inspector
     

     I actually wrote a program in excel that does this very thing. You list all the things you have spent money on, the things that you have to spend money on that is not in the first list, and all the things you want to spend money on that is not in the first two lists. 

    Then it actually does compare two items and asks the Question "If you only have enough Money today (do not count any expected money) to spend on one, would you spend it on <list item 1> or <list item 2>?"  Not exactly easy. It gets down to Rent  or Car insurance. Or even Rent or Drivers license.

    I can't however make it tell anyone what they "should" do. 

    Like 1
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 1 yr ago
      • 1
      • Reported - view

      kevman479 Yeah, not a programmer, but seems like like a loop of while TBB>0, if/then. Technically feasible, but surely complicated. And my choices might well be different if I'm getting paid tomorrow versus two weeks from now, so excluding expected money might not be the way to go, either. It's an interesting thought exercise, anyway.

      Like 1
    • kevman479 Judging from years of postings, many people don't even have a semi-complete idea of the things on which they need to spend money until several months after starting YNAB. In my own budget, I had a pretty good idea early on, but I recall adding a category (web domain registration) more than 12 months after starting.

      I think the pair-wise comparison (a.k.a., bubble-sort algorithm) to evaluate priority is a great exercise for people to do. Budgeting is trivial once priorities are established.

      Like 4
  • dakinemaui  Yes it was a thought exercise. I used it for for the first 2 years of YNAB 3. I mostly used it to help My wife and I get on the same page as to priorities. When we found something new we hadn't considered we would rerun the program.

    Habanero Salsa, Your missing the point. The point is not to think about tomorrow. What are your priorities today. Tomorrow run it again. It has nothing to do with TBB. To me Rent may be more important then a drivers license. To a truck driver his(her) license might be more important. This thread is about helping someone that is broke. For someone starting out that has always spent money willy-nilly it helps them to get a starting point. Tools are high on my list so when I wanted to buy a saw because I needed it that day, my wife could just go back and show me where I chose a muffler over tools. So the saw had to wait. Even though I was to get a check in four days and wouldn't have the money to fix the car until then. It just helped me learn delayed gratification. And learn to stick to my categories. I did this every time I got paid. Did I do the WAM. Sure I did a lot. Still do. just not nearly as much.  

    Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 1 yr ago
      • 1
      • Reported - view

      kevman479 If the point were not to think about tomorrow, YNAB would budget by the day and not the month. 

      If you want your internet cut off today because you fully funded your mortgage instead, since it’s a higher priority but not due until after your next check, you do you. I’ll pay for the internet. 

      Your view necessarily means that I fully fund my rent before I buy food or gas because not getting evicted trumps everything else. Well,  no, I take it back... I don’t know about my rent because it isn’t due today. So I should just plan for today as if I don’t have to pay rent in the future... even though takes all meaning out of planning and substitutes ideological purity, as far as I can tell. 


      Edit: Let’s say I make $1000 a month, $250 a week (and all 4-week months, for simplicity). My rent is $250. I get my first check. If I don’t think about tomorrow, and rent is my unopposed #1 priority, don’t I put all $250 into Rent and then wait for my next check to do anything else? That seems unreasonable, so I must be missing something. 

      Like 1
  • The helpfull questions are an interesting idea.

    Imagine having to list all categories before the program can present you with choices though.... Once most people can acurately name them they're already well on their way. 

    Like
  • Your not looking at this from a point of being broke. I'm not saying don't plan. I'm not even saying budget in that order. But what if your next check won't cover your rent? If your rent is 400.00 and you have 250.00 today. do you pay that internet bill today? Then budget 150.00 today and if that internet bill is 100.00 or less you pay the bill. But what if that bill is 125.00? This is the kind of situation some people face every day. They don't save the first two checks of the month. Their broke because of bad money management choices.

    A single guy makes decent money. Gets paid Friday, Always broke on Monday. It's the middle of the month. he just got his 3rd paycheck of the month. Started YNAB Yesterday. Giving the 50.00 he has in checking because of minimum balance. His credit is bad. Has everything covered. His car is running good. does he put whats left back in case his car breaks down or does he go to the night club with the guys? This is what YNAB helps us figure out. 

    All my program did was to help me keep focus when I started out. It is what helped my wife and I to spend by category balance. 

    Like 1
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 1 yr ago
      • 1
      • Reported - view

      kevman479 Well, it sounded like you were saying don’t plan, because planning involves anticipating income you don’t have — not spending it, hopefully, but planning on it pending revision — as well as expenses. I can’t make any informed judgment about anything in my budget if Rent swallows all, or more, of my first check of the month and I limit my vision to my first check. 
      My point, and I may not have made it clear, is that if my rent is $400 and I have $250, whether I pay for the internet, or buy food, depends on income I plan to have but which you said earlier to ignore. If I have no more income before rent is due, maybe I keep $50 for food and gas, pay half the rent, and throw myself on the mercy of the landlord. If I anticipate more income, maybe I pay the internet. But if my decision must be made solely on knowledge of all expenses but not of income, I can’t reasonably weigh my options. In that case everything goes toward Rent, no matter what income I may have the rest of the month, and that still doesn’t seem reasonable to me. 

      kevman479 said:
      His car is running good. does he put whats left back in case his car breaks down or does he go to the night club with the guys?

       This, in a nutshell, is what I think having a good grasp on budget and finances comes down to: being able to see a positive number in your account and not thinking it’s all available. That’s a perspective that transcends YNAB, though YNAB can help enforce it. My mom would see $10,000 in the bank and want to know why we weren’t going on an expensive vacation. My dad would see $1500 in Vacation and say “That’s why.” They both used YNAB at the time, one more enthusiastically than the other, but my mother still doesn’t quite grasp that some money in the bank is already spoken for, whether explicitly or not. And she pays the price for that every time property taxes or insurance premiums or whatever get close. That’s something YNAB can’t fix. But, like your spreadsheet, maybe YNAB could, at least theoretically, help frame those choices. 

      Like 1
  • Silver Inspector said:
    Or they might be behind on bills with a poor credit score and at this point creditors are calling and the house of cards is beginning to fall apart. Beyond that, the outlook is dismal and a very short road to despair. Relentless phone calls, emails, text messages and mail from creditors or collectors. Later comes lawsuits, judgements and all the personal relational and professional work related fallout that goes with it hand in hand.

     Oh, hiiiii there! 🙋‍♀️ This is me, LOL. Or at least, this was me at the beginning of the year. After going through an ugly and grueling divorce process last year, I pretty much lost everything. I had to use what little savings I had scraped up to pay for legal fees, and during that process I fell behind on everything else. My credit score plummeted. Shortly before the divorce I was sued by one of the major CC companies for defaulting on my CC ($7K outstanding balance) and had to make payment arrangements with their attorneys to keep them from issuing a judgment against me. I racked up medical/utility bills that went to collections and the phone rang nonstop. I came VERY close to defaulting on my student loans because I'd already reached the maximum amount of deferment/forbearance. I had to break the lease on my apartment early because I could no longer afford it. I lost my car to my ex-husband and then fought tooth and nail to get it back. To sum up: he outspent/out-lawyered me, won primary custody of our two kids and most of our possessions, and now my net income is further reduced by automatic support payments coming out.

    I'd been familiar with YNAB before and I'd used it on and off with a few small wins here and there, but at the beginning of the year my situation was the most dire it had ever been and I knew I had to go full force with it and follow the Four Rules to a T if I ever wanted to start clawing my way out of this pit of despair I'd dug myself into. That's a decision that I had to make, and then I was the only one who could do the hard work to try to start turning things around. I've had a TON of support and encouragement from family, friends, and partners - but I'm the one who's making the tough financial decisions based on what little I have. And yeah, most months I still cut it REALLLLY close but my account has not gone into the red ONCE since I started using YNAB to track everything. And that's with reduced income and increased debt from previous years. 

    Nearly a year later, I'm still going strong with YNAB (I enter expenses manually because I'm in there multiple times a day anyway) and while I still have a LOOOONG way to go before I get where I want to be, I'm taking comfort in the fact that I know my exact account balance and exactly what expenses I need to budget for. Just having the awareness and not stressing about being constantly overdrawn anymore is a HUGE improvement for me.

    All of this is to say that I'm echoing what other people here have already said - YNAB is a tool. It's up to us to decide to use it to take control of our own finances, and that looks different for everyone even if the methods are similar. There are a ton of stories here that I can't really relate to, but then there are some that I connect with immediately. Maybe some people can't relate to my story (in fact, I hope that's the case because I wouldn't wish this mess upon anyone LOL!) but maybe someone out there can relate to at least part of it and then realize that they, too, have it within them to change their situation. That's the beauty of YNAB - just like with any tool, it becomes what YOU make of it.

    Like 6
    • Violet Rain  WoW. Well done, coming from what you went through. I’m impressed. Wishing you all the best for the future

      Like 1
      • Violet Rain
      • ElectroNecroMancer
      • Violet_Rain.3
      • 1 yr ago
      • Reported - view

      Powder Blue Pony Thank you! I'm *cautiously* optimistic about the changes that 2020 will bring if I stay on this path. 😊

      Like
  • Violet Rain said:
    Oh, hiiiii there! 🙋‍♀️ This is me, LOL. Or at least, this was me at the beginning of the year.

     Thx, that's encouraging for sure. I hope all the best for you and it sounds like you're well in your way to a success story! Congrats.

    Like 1
      • Violet Rain
      • ElectroNecroMancer
      • Violet_Rain.3
      • 1 yr ago
      • 2
      • Reported - view

      Silver Inspector Thank you! It has not been easy, but I'm definitely much better off than I was a year ago. This is definitely a marathon, not a sprint.

      I started a journal about a year ago and then it kinda fell off the map until about a month ago LOL. But now I update it pretty regularly. Check it out if you want to follow along in my saga: https://support.youneedabudget.com/t/80dw5l/picking-up-the-pieces

      Like 2
  • dakinemaui said:
    Give yourself some credit. I suspect you already knew paying down CC debt would be better than reducing the mortgage.

     Thank you I think. I suppose the only thing I give myself credit for is surviving this long without a budget, intuitively. As far as paying down the mortgage or credit cards goes, that's a long way off. Currently I'm trying to figure out how to pay anything, mortgage, utilities, minimum credit card payments. Things were going okay, making all the bills and paying down some credit, until a couple months ago when my wife lost her job, (she's since gotten another). However, because we were living paycheck to paycheck, everything began to crumble and unfortunately when one lives paycheck to paycheck and they miss a few paychecks, things get really goofed up in a hurry. Last month trying to use YNAB I paid some bills I shouldn't have, then the thing that really crushed me is my paycheck got reduced by $400 every 2 weeks for a new health insurance plan, and that came at the worst possible time, when we were without my wife's income. I hadn't planned for it, didn't know when it would take place and by the time that deduction came I couldn't afford it even if I had. But because I'd paid other bills I budgeted for in YNAB, I couldn't afford the mortgage. Now I'm trying to refinance, and the phone doesn't stop ringing from creditors calling. The biggest problem with credit cards, is regardless of how long you've been an on time payer, when you go past due things get crazy super fast because there's no longer the minimum payments, but in their place are past dues several times the normal payment. I'm sure it would've happened eventually, but I probably would've made different choices and delayed the devastation a bit. On the upside, I was following the YNAB rules, on the downside, they don't work very well when you're broke. Normally without YNAB I would've protected all funds until the mortgage was paid. But, using the zero based budget, I spent all my money on all the things that were covered by that last full paycheck, counting on getting another full paycheck to cover the mortgage and that didn't happen, so everything is now falling to pieces. Again, not YNAB's fault, it was just a really inopportune time to try and use a budget.

    Like
    • Silver Inspector oh, what an unfortunate and frustrating combination of events and coincidences! 

      Of course I know life can’t be called fair, but this is just one of those times I’m reminded. Not meaning there aren’t different ways one couldn’t have handled things beforehand or one isn’t responsible at all, (they say the dutch are blunt, if I am now, it’s due to not native speaking, not meaning to be unsensitive), but to have it all at once, where some would be saved by the bell (or a family member) and you obviously weren’t. And even in how some people learn about finances in their upbringing. No, fair just isn’t the case.

      you being here (just the discussion I mean), means multiple things to me: being so very much aware must be the toughest part. And at the same time so very responsible, so you’ll take responsible descions too. At least to the best of your ability. Good luck.

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      Silver Inspector That is hugely frustrating and please know that I wrote my last response before I had seen this. I do understand how difficult and stressful this period can be and I'm fully aware that once you fall under, it can spiral quickly.

      Ironically what YNAB encourages me to do is never assume that the next paycheck is coming. All you can do at the moment is look at what you have, look at everything that has to get paid, is behind etc and then look at the priorities for paying them off and the consequences of not doing so. I can't give advise here because I'm based in the UK and our rules are very, very different on certain key things in this area. I used to post regularly on the Motley Fool UK boards when they existed as we had a debt section. People would post their template budgets and debts and then we would look at the situation and try and find a way out. Sometimes, the advice was ultimately to say that bankruptcy was the only way. Sometimes there would be things we could trim that would then allow a debt snowball/avalanche approach to be taken. Sometimes there was an interim period where we had to advice which bills could be defaulted on temporarily and which should never be because of the potential consequences*. It was on the Motley Fool UK debt boards that I first learned of YNAB (when it was transitioning from 3 to 4) actually. It was recommended as a tool to manage your money once the plan had been put in place.

      All this to say, good luck. There will be a way out of this. It could work alongside YNAB or with you using the basic principles with a pen and paper (or Excel to save you the cost of the software at the moment). 

      * As an example, in the UK not paying your council tax could lend you in jail. Not paying your mortgage could see you out on the streets but you can normally default for a month or two particularly if you speak to them first and arrange a plan. We can't however just give the mortgage company the keys and walk away if we're in negative equity and sadly sometimes people have seen to many US films and think they can. Other debts have less immediate consequences and some credit cards will reach payment agreements at lower interest rates once you have defaulted and if you agreed to stop charging things to the card. However, we couldn't use the often quoted US advice of well just give the mortgage company the keys and walk away if your house was in negative equity. All of these things could be useless in the US but there should be people who could advise you. In the UK there's something called the Citizen's Advice Bureau which can help with advice in this area. I don't know if there is something similar in the US, possibly available through churches? 

      Like 1
  • monkeyhanger said:
    Ironically what YNAB encourages me to do is never assume that the next paycheck is coming. All you can do at the moment is look at what you have, look at everything that has to get paid, is behind etc and then look at the priorities for paying them off and the consequences of not doing so.

     This is an approach I’m having a hard time understanding. How does one, or does one, keep one’s high priority expenses from swallowing all of the available money?
     

    Assume, for example, my rent is my highest priority and that I am not buffered. I paid rent on October 31 for November. On November 1, since rent is my number one priority and I can’t assume another paycheck, shouldn’t I allocate all the money I have to rent? If not, why not? When I get my first paycheck of November — let’s say that it, along with what I have, will cover my rent — shouldn’t I allocate the entire paycheck to rent and have nothing for food, gas, electricity, etc. until I get another paycheck, if I get another paycheck? If not, why not?

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    • Habanero Salsa I can understand this struggle. For me, personally, it's a balance of the two - not expecting the next pay check but also not discounting the fact that it is coming, either. I think it's a and situation, not an or situation.

      I put half of the mortgage payment aside out of each of the BF's pay checks. I put half of most of the bills aside out of the pay checks, actually. It spreads things out and allows me to do more with each pay check. I also took opportunities when we got windfalls to set aside an extra payment (so my mortgage payment category almost always has an extra payment's worth of money in it). But it has taken years to get to that point. And sometimes, in between, I've allowed the credit card debt to go up because the bigger bills were more important. You can't pay the mortgage on the credit card, but you can put the groceries and gas on the credit card. It has meant that we've lived leaner than I would have liked, but our priorities are in the right place - with the utility bills (we don't even pay for internet, that's not a necessity. The cell phone bills are, however, because they provide access and a meager amount of "hot spot" internet).
      So it's always ultimately up to you - but it helps to have a view of both perspectives. It's like driving a car, if you only watch right in front of you, you won't be prepared for the slow down ahead, but if you only watch far away, you won't see the car that's about to turn in front of you. You have to watch close and in the distance as well.

      And if the house of cards falls due to a job loss or other emergency, then you just pick up the pieces and keep adjusting your priorities. At least you have the support of YNAB to help reorganize at that point.

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      farfromtheusual Yes, I agree that it's necessary to look at the near term and the longer term, which is why operating on the basis of not getting another check doesn't make any sense to me.

      If the check never comes, yes, you need to rearrange, but sitting around hungry in the dark because you've put all of your money toward rent pending another check seems... untenable.

      Like 3
    • Habanero Salsa When you're Giving those dollars a job the most important question to ask is: “What does this money need to do before I’m paid again?” Our Learn to Prioritize Guide goes over this.

      Yes, rent is a high priority, but food, gas, and electricity are also necessities. If rent isn't due until next month, having something to eat and a warm house in the winter take precedence today. Being able to pay rent next month won't be of any good if you starve before then.

      That being said, don't budget an entire check towards groceries. What is the minimum amount you need for food to last until your next paycheck? Maybe use a Spending goal to make an easy reference of that amount.

      In YNAB, your budget is a plan for the money you have right now—but you may want to plan ahead for what to do with money you'll get in the future. We call this a budget template. 

      When you have a moment, watch our video on How to Create a Budget Template or take a look at the Set Up Your Budget workshop. Both will teach you how to use scheduled transactions and goals to outline priorities and plan for future expenses.

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      • monkeyhanger
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      Habanero Salsa It's not an easy question to answer and not one that anyone else can answer for you. What YNAB (or any similar system does) is make it apparent quite how many people are one late paycheck away from potential disaster. I'm in the UK and we typically get paid monthly so don't have to deal with decisions about what to allocate from each paycheck. That doesn't mean that we couldn't be in the doo doo if a paycheck was late.

      What YNAB does (or should) force you to do is to think about what you would do if that happened. I think the answer depends on your attitude to risk, the amount of discretionary funds you have available and your access to credit. I personally would prefer to have my rent and council tax (something we can ultimately go to jail for not paying) fully budgeted by the end of my first paycheck if not earlier. If I was starting out and couldn't fund the whole budget then I would only fund categories I absolutely had to pay before the next paycheck and all the rest would go to rent. Groceries would be funded but I'd have an eat the cupboards and buy the bare minimum fortnight. I know I've not budgeted for my electricity bill in that first paycheck and I'm aware there's a risk if that 2nd paycheck doesn't come BUT for me electricity is a slightly lower priority than rent. Slightly. In the UK they're more likely to give you a little grace and a red electricity bill is less significant than a missed rental payment. Electricity is still much higher than most other categories including paying my credit card bill. We're not talking things I want to do here but we are talking the advice that I would be given in the UK if I was in the mire with no access to credit. 

      If my situation was less dire or I had credit available then obviously you'd handle it differently and YNAB should reflect your real life decisions.

      Once things were more stabilised I'd fill the other categories in priority order. If I had access to credit, then I would buy as much as possible on credit cards (backed by the budget) so that if that paycheck didn't arrive I could use the cash in the bank for the rent. It's all still budgeted but you've increased your temporary liquidity. If my budget was über tight though I'd still be on an emergency setting and not spending at my things are OK level.

      If your budget is a little more stable or you have more funds generally, then you can budget more to a template knowing that if the proverbial hit the fan you could pay your rent out of your Christmas fund, for example, or even that car insurance that doesn't need paying for 8 months. Some people would choose to budget to rent and leave those categories low. Others would budget as normal but know they could WAM. What you don't want to do is just assume that every paycheck will come so spend down to the wire.

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      • monkeyhanger
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      Habanero Salsa YNAB should reflect the decisions you've made and not the other way round.

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      Faness Electricity does me no good without an apartment, though. If I have to choose between the two, I'd rather bundle up in a cold apartment than under a bridge.

      If I can't plan on another paycheck, what this money needs to do is pay rent, period. I know how to prioritize, but part of prioritizing in the real world requires understanding the entire situation, not just right now.

      My question isn't really about prioritization. It's about how one can make informed choices about those priorities if one knows about all the bills up front but not any income.

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      Habanero Salsa Hence my response above.

      I'm in a different situation. My budget is fine but I'm currently unable to work and although the UK has reasonable sick leave policies they don't apply to me as a contractor so my invoice for November is going to be less than 5 days work. December won't be close to a full month either. My business could afford to pay me relatively normally in November. Actually it could have afforded to pay me better than normal but I know that there will be an issue in December or more likely January so I've already cut what it paid me. How do I reflect that in the budget? Well I've taken the decision to continue to fund most of my categories as normal for now but in the full knowledge that I may need to WAM from them in the future. I can easily see from just the current month's budget how padded my budget is, where there is slack and where there are potential risks.
       

      Personally, I need to do this for 2 budgets - personal and company - and I need to think ahead to what happens if I don't get back to work at all. It's entirely possible that my client could cancel my contract if my recovery takes longer than anticipated and my corporation tax from my FY ended 30 September 2019 is still going to need paying in June 2020. Legally, I'm allowed to pay a larger dividend than I have in cash let alone one that leaves me with enough to pay that tax bill but that wouldn't be sensible. Is there a middle ground where I pay enough of a dividend to keep my personal budget ticking over (with reduced discretionary spends) but risk having to use credit, possibly personal, if I don't get any more income before June 2020? Or do I take the hit in my personal budget now? Either option is possible as is pretty much anything on the spectrum in between. What YNAB has done is made me brutally aware of the potential consequences of any decision. A few years ago I ended up processing contractor invoices for a short period as emergency cover for someone who had left abruptly. You'd be surprised how many phone calls I received from very highly paid contractors (very highly paid) asking for payment far ahead of our normal payment terms so that they could pay an urgent tax bill. They were on 5 figure sums per month but needed last month's invoice paid via an emergency payment to pay a tax bill that they would have known about for 9 months. 

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    • Habanero Salsa This is where individual priorities come in and that doesn't mean tough questions will never be asked. I'd sooner take a late fee on the rent to pay the $60-$100 heating bill, than to stay in a cold home (I can't function in the cold). However, if funds are that low, I may resort to the bare minimum for food to cover some of the difference. Difficult circumstances will paint a different result depending on who's present.

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      Faness I agree that it may come down to deciding which late fee is lower or less impactful. Or worse. It's the ignoring any future income while planning that seems overly rigid to me, so I'm trying to understand what I'm missing.

      I'm helping my roommate with money, in general, and YNAB, in particular. She's prioritized her obligations. She's living paycheck to paycheck but can, with some planning and diligence, come out ahead at the end of the month.

      Rent is her highest priority. I've suggested that she put half of each of her first two (weekly) checks toward rent with the rest filtering down her priorities. This has her rent funded by mid-month and at least something toward her other highest priorities. It also has the effect of pushing most of her most discretionary items -- entertainment, etc. -- toward the end of the month. By the end of the month, if she sticks to the plan (it's a work in progress) she's funded, has some money toward emergencies, and can see the benefit of maybe not spending everything in the entertainment bucket so as to make next month a little easier. It's only been about four months, but it's working.

      If she can't plan in a wider scope than what's in the bank now, there's no light at the end of the tunnel. It seems insurmountable to her. This way, she's making progress. Yes, if she got fired or income otherwise dried up, she'd have to rearrange, but she'd be in deep, deep water no matter what.

      Like 1
  • monkeyhanger said:
    What YNAB does (or should) force you to do is to think about what you would do if that happened.

     I'd pay rent. So, again, it appears to me that the concept of not contemplating any future income means I fund rent. Not electricity, groceries, internet, car, or anything else until rent is full funded. How can it be otherwise if the presumption is no more money will come in?

    I can't help but think that this approach leads to unnecessary austerity in the case where future income actually shows up. If the income doesn't materialize, you need to regroup and reassess, but letting your internet get turned off the day before a paycheck, for example, because it's a lower priority than rent or whatever seems odd to me.

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      Habanero Salsa but you're not in a situation where the only money in your possession is the rent amount. If you were then you would have to make that decision or you would fund one of the payments by credit.

      You're being deliberately obtuse.

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      Habanero Salsa And you wouldn't not eat for two weeks. Reflect reality.

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      monkeyhanger Well, thanks for the personal attack. 

      If someone is living paycheck to paycheck and doesn't have categories built up that person could absolutely be in that situation. My roommate pays rent on November 30 for December. On December 1, she absolutely does not have money in her possession to pay rent on December 31.

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      monkeyhanger There are a lot more resources for the hungry than for people who need rent, if it absolutely comes down to that. I think part of "reflecting reality" is that people have income at least for the hours they've already worked and it shouldn't be ignored when making budgeting decisions. I'm trying to understand why it should be ignored and what the advantage would be.

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      Habanero Salsa I know and if you'd read all my replies you'll have seen that I've addressed that but you are choosing not to see those bits so I am bowing out. 

      On your last point, I have worked a few hours this month but there is no guarantee that my client will pay it. They are generally pretty reliable but even then I could get paid anytime in a 3 week window. I'm not going to consider that for any urgent payments until it arrives. 

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      monkeyhanger Yeah, if you're going to continue to accuse me of operating in bad faith, that's best. Now I understand why people request an ignore feature here.

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    • monkeyhanger Habanero Salsa like life itself it is all about priorities in the light of chances, isn’t it? I’m not 100% sure I’ll get my next paycheck but it is very likely. I know my husband could get run over by a bus this afternoon, but that’s not very likely. If you KNOW the next paycheck is not coming, that influences the way I spend my money. You just can’t be prepar3d for everything.

      YNAB helps a lot in preparing for the (very near and further of) future. But it won’t accurately predict it. So sometimes looking back, with new information, you wish you would have chosen different. That doesn’t mean you chose wrong at the time....

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      Powder Blue Pony I agree with that. I think one can -- I won't say "should" -- take into account circumstances beyond this second -- no, this second, no this one -- in evaluating priorities and allocations.

      You make a good point in that there is a difference between knowing there won't be a next check and planning that there will be, subject to new circumstances.

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      Habanero Salsa If I were to start YNAB when living paycheck to paycheck, I would already know that if my next paycheck didn't come, I'd be in trouble. So I could see 2 ways to deal with that. 

      1. You fear the paycheck isn't coming, so you put all in your highest priority(ies), i.e. rent in this discussion, and find other ways to get your other necessities covered.
      2. You hope this won't happen too soon and you start preparing for it but still try to cover most of your necessities. That is you start budgeting for what you need but keep some money in reserve, aka you start saving. And then you hope, you'll have enough savings if the paychecks stop coming. That's typically the spirit of Rule #2.

      In short, for me, it's like any other risk assessment you have to make in life. For example when you decide which level of insurance you want to take: if you think something is likely and would be crippling, you will take out better insurance than if you think something is unlikely.

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      • Habanero Salsa
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      Ceeses I agree. The first option — plan as if you’re not getting another check — doesn’t seem feasible to me, yet people here were promoting it, which confused me. 
       

      As I said somewhere in here, my advice to the person I was helping was to put half of each of the first two checks toward rent. That covered rent by mid-month, made the use of the remaining 50% of those checks subject to some exceptionally rigid scrutiny, and emphasized that trips to the nail salon, for example, might have a place, but that place is pretty far down the list, if they make it on the list at all for now. 
       

      The “don’t look past what you already have” approach works for actually allocating money, but it strikes me as nonsensical as an approach for planning for allocating money.

      Like 1
    • Habanero Salsa The connotation of the budget (noun) being a plan, budget (verb) meaning "allocate", and budget (verb) meaning "plan" (verb) is often confused. 🙂 It's really easy to misinterpret because newbies don't understand the distinction, and veterans sometimes abuse the language so the newbie might relate. English is... complicated. LOL.

      Unquestionably, you have the right of it. One should consider future income when planning (and it's built into Rule 2). One should NOT allocate money that cannot be spent right now (i.e., future income).

      Even the "fundamental" YNAB question hinges on future income, "What does this money need to do before I am paid again?" (emphasis mine). If you know you're not going to be paid for a while, you probably should rearrange the budget/plan (noun) so expenses you expect to incur during that time that cannot be paid with credit have money available.

      Like 3
  • Silver Inspector said:
    I was following the YNAB rules, on the downside, they don't work very well when you're broke

    On the contrary, that's actually when you need them the most. The budget is a plan for your cash, and the reality is that some things cannot be bought with credit. Making a plan (Rule 1) is crucial when things get tight so you don't accidentally spend cash you need for something else.

    Don't conflate the fact that sh!t happens with the budget failing. You made that plan as best you could with information you had *at the time*. Don't beat yourself up for not predicting the future with 100% accuracy. Adjust the plan as new information arrives (Rule 3).

    Perhaps Rule 2 is less useful in your situation since it relies on future income, but never getting additional income is not realistic either.

    Yeah, ignore Rule 4. 

    You've been hit pretty hard, no doubt. You're going to have to get up again, though. I know I'd rather have a plan (and change it as needed) than try to navigate your situation without any guidance whatsoever. You CAN do this!

    Like 6
    • dakinemaui yes, that’s what I tried to say 😊

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  • dakinemaui said:
    You've been hit pretty hard, no doubt. You're going to have to get up again, though. I know I'd rather have a plan (and change it as needed) than try to navigate your situation without any guidance whatsoever. You CAN do this!

     YES, THIS. Having a plan (even an imperfect yet flexible one) is SO much better than drifting aimlessly with no guidance or awareness.

    IMO, the awareness is the first (and probably most crucial) step. You can't make a plan if you don't know what you're working with. I had to snap myself out of "ostrich mode" and face my financial realities, as grim and heartbreaking as they were, before I could start working on a strategy to make things even marginally better.

    Yes, life happens. That guy Murphy made me his personal punching bag last year. But that's what's so great about YNAB and having a dynamic budget that can adjust to your life with no judgment whatsoever. You may start out on one plan, then get blindsided by some horrible unforseen circumstance - at which point you say, "Welp. Plan A is no longer valid, so let's work with what we have now to see what kind of Plan B we can do." But you can't do that if you don't already know what you have and where it's already going. 

    I'm sorry you're going through all of these awful things. But it won't last forever. It's only a season, and you CAN be in a better place with time, patience, and effort. Stop beating yourself up for not being able to predict the future. All that matters is here and now and where you go from there. Deep breaths. You've got this. We'll be here cheering you on! 🙂

    Like 3
  • The question I keep hearing ringing out over this conversation is, "How can I be sure I'm prioritizing correctly?"

    And the answer is, you can't be sure, because you can't see the future. Plans change, stuff happens. But the whole point of the YNAB Method is to make you more financial resilient in the face of the unexpected, and prioritizing is how you get there.

    So if you can't be positive that you're prioritizing your dollars well, but prioritizing is fundamental to the YNAB Method, how do you actually get anywhere?

    The answer is: prioritizing pretty well and adjusting as you go is good enough, especially when you're getting started. (That sound you hear is me smooshing Rules 1 and 3 together.)

    How do you know if you're doing good-enough prioritizing? YNAB will let you know by regularly offering you two feelings, one positive and one negative (but both helpful):

    1. Scarcity. When you check your category before spending and find that it's empty even though you have $1500 in your checking account, that's scarcity. That's the feeling of YNAB doing its thing: making you think before spending just because you have some money sitting around. This is when prioritizing really happens—it's not just when you allocate your paycheck. It's all month long when you decide which category to move money from, or choose not to make that purchase. (Living under a constant feeling of scarcity because your account balance is genuinely low or overdrawn is unbelievable stressful, of course, and while I think YNAB can do a lot to help there, too, it's a different budgeting scenario in some ways.)
    2. Abundance. The money is there to deal with an unexpected event or impulse buy, and in the past it wouldn't have been there. This what reckoning with that not-so-fun feeling of scarcity gets you.

    I've said this before, but YNAB does not teach you to budget under the assumption that you will never get another paycheck. Goals are an entire feature that deals with the question, "How do I plan for my next paycheck?" What you can't do with your next paycheck is budget it—and that's because budgeting future income robs you of that sense of scarcity that is essential for a successful budget.

    Like 3
  • dakinemaui said:
    Making a plan (Rule 1) is crucial when things get tight so you don't accidentally spend cash you need for something else.

     

    Matthew said:
    The question I keep hearing ringing out over this conversation is, "How can I be sure I'm prioritizing correctly?"

     I would agree Matthew. And when I listen to Jesse, he'll mention that all the rules are really just rule 1. Give every dollar a job. So, the issue of Priorities is a resounding theme throughout this thread. Habenero reinforces this as do others that have mentioned they're seasoned YNAB users and still operating in the red, or using credit cards to pay bills. Jesse teaches that debt is not an option, so if folks ARE using credit cards to pay bills or pay for groceries, (yet still promote using YNAB), then I think it just goes to show that my original post was fairly accurate, in that YNAB as a brand should truly figure out how to address this core problem, if they really want to help people stop living paycheck to paycheck.

    The YNAB user simply cannot budget, plan, or give every dollar a job if there's no money to spread around. Its truly best suited to the user who has the funding they need and are ahead of the curve. Or as someone else briefly mentioned, (paraphrasing here), starting out completely from scratch or putting oneself in that starting from scratch position.

    It just seems to me that as a brand, and now having the responsibility of filling the greatness that YNAB is supposed to be, (its number one in most budgeting app reviews), that there really should be a push to market for something that would help broke people budget, (even diehard ynabbers who still defend it, yet are using it incorrectly).

    There probably is a place for the current YNAB, for the small percentile of folks who have funds and good habits, or those DIY'rs even if it takes eons to figure out. For the vast majority of people looking for a money management and budgeting system because they NEED a budget... Well it just really falls flat on its face, because there's no definitive prioritization or forecasting. 

    Obviously, as I've seen several times repeated throughout the thread, there are those staunch supporters of the school of hard knocks, but the point is, its almost 2020... I'm sure that a technology and education company can do better than that and help many many more people.

    I think there's basic priorities that everyone can agree are priorities, like food, shelter, etc. Sure there's probably someone who wants their priority to be funding the world's first pet rock sanctuary, but the bulk of the broke population, (again these numbers are staggering and in the millions), need help... Real help, NOW.

    I'm not advocating handouts or something extraordinary, just a sweet tech solution for figuring out what the smartest outflows would be with the current inflows. 

    For all those naysayers, who basically whine that it can't be done, or that its too hard, too much coding, too expensive, etc. or that as a money puritan every user should, (no matter how long it takes, or how bad it devastates your life), learn the principles of supreme money management via trial and error, I think that's just a bunch of lazy excuses and not a super great stance to take from a business standpoint. I mean, the YNAB thing makes sooooo much sense, but there's no way I'd personally recommend it to anyone "typical" because I'm not even sure how to make it work myself and I'm pretty darn good with gadgets, software and self discipline. 

    I think that the company Simple Bank might be on the right track with their banking app, and their safe to spend technology. I'll likely try that next and see what that's like. I still agree with Jesse's principles and the YNAB software is unique in a very geeky, not so user friendly way. Its just too bad its not better suited for broke people that are trying to stop living paycheck to paycheck. That's why I thought it'd be so awesome if somebody important at YNAB actually experienced what broke is, then came back to the drawing table to make YNAB something they could use personally to get un-broke. I know its a lofty idea, and not very realistic, but I think that's what YNAB the company could really benefit from, is a new perspective.

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      Silver Inspector   best of luck to you, it sounds like you have a great product idea with a giant market waiting to be tapped.  I can't wait to try it. 

      Like 1
  • Silver Inspector said:
    The YNAB user simply cannot budget, plan, or give every dollar a job if there's no money to spread around.

    If that user has a job, there is, in fact, money with which to plan.

    There is no sweet tech solution that will magically give someone more income or fewer expenses. All YNAB can do is provide a reality check. What they choose to do with that is up to them.

    Invariably, expenses must be cut. They're the only one who can possibly know which. Not YNAB, not tech, only them.

    I am a former P2P with massive consumer debt. I didn't need handholding. I needed that slap in the face that YNAB provided and to take responsibility for improving my own situation.

    You can only lead a horse to water.

    Like 7
  • Silver Inspector said:
    There probably is a place for the current YNAB, for the small percentile of folks who have funds and good habits,

     Unfortunately if a person does not have good habits, or refuses to initiate good habits, their choice of software won't matter.

    As several other people have stated, you need to make the choice of where to budget your money. For one person food  and shelter will be the priority, for someone else child support will be the priority, and yet for someone else transportation is the priority. 

    YNAB is simply the tool that helps the user see what obligations they have committed to and what wants they have. If there is no money for wants focus on the obligations. If there is not enough money for the obligations then there really is only a few options. 1. A second job. 2. Reduce the obligations. 3. Default on the obligations.  Different software won't create a new scenario.

    I first learned about YNAB several years ago like 8, maybe 10 years.  I cannot express how mad I am at myself for waiting SOOOO long use it. I clearly remember thinking, "if I had enough money to live on last months paycheck, I wouldn't need your help!" I focused so much on that aspect that I couldn't see any benefit and its something that I regret. I can only imagine where we would be today if I had just tried.

    Like 5
  • Silver Inspector said:
    And when I listen to Jesse, he'll mention that all the rules are really just rule 1. Give every dollar a job. So, the issue of Priorities is a resounding theme throughout this thread. Habenero reinforces this as do others that have mentioned they're seasoned YNAB users and still operating in the red, or using credit cards to pay bills. Jesse teaches that debt is not an option, so if folks ARE using credit cards to pay bills or pay for groceries, (yet still promote using YNAB), then I think it just goes to show that my original post was fairly accurate, in that YNAB as a brand should truly figure out how to address this core problem, if they really want to help people stop living paycheck to paycheck.
    The YNAB user simply cannot budget, plan, or give every dollar a job if there's no money to spread around. Its truly best suited to the user who has the funding they need and are ahead of the curve. Or as someone else briefly mentioned, (paraphrasing here), starting out completely from scratch or putting oneself in that starting from scratch position.

     I don't even know where to start. You're flat out wrong on so many things you say (just a sampling bolded above). You've been using YNAB for all of a month and yet you make statements as if they are facts. Some of us have been using the YNAB method for over 10 years. You might stop for a moment and try to understand  what we're trying to tell you.

    There is nothing inherently wrong in using credit cards without accruing debt as a tool in YNAB. They are certainly unnecessary but they can give you extra benefits such as fraud protection and cash back. I haven't paid a cent of credit card interest in at least 9 years running now and never will again.

    There is no magic software or expert system that will solve all your problems if you don't make enough to cover your basic needs. And yet there is no better method than YNAB for making the best use of the funds that you do have. It will show you your reality. But it's up to you to decide on how to allocate those funds to best handle your situation. The resources are out there to dig yourself out of your hole but it's going to take hard work and dedication on your part to make it happen. Between Dave Ramsey and YNAB, you should have all the tools necessary to figure it out. No magic software is going to bail you out. That's the facts.

    Like 4
  • Silver Inspector said:
    So, the issue of Priorities is a resounding theme throughout this thread. Habenero reinforces this as do others that have mentioned they're seasoned YNAB users and still operating in the red, or using credit cards to pay bills.

     I’m not sure how to interpret this passage. If I reinforce that priorities are key, I agree completely. If you’re inferring from what I’ve written that I’m operating in the red or utilizing credit card float, then I disagree. 
     

    I don’t operate in the red. I do use a credit card for everything I possibly can, but it is paid in full and is on auto payment. 
     

    If there’s no money to spread around, you’re beyond the reach of any software solution. If there is money to spread around, YNAB can help you see more clearly how much there really is. The user still has to decide what to do with it and there still may not be enough to cover the status quo. Here, YNAB can’t create money out of air, but it may help you identify possibilities for cuts that may bring expenses within income. 
     

    Bottom line, YNAB cannot decide for a user that X is more important than Y than Z. Once a user has made those choices, YNAB can help optimize implementing that spending priority. It’s conceivable that YNAB could do more to help with prioritization, but the structure it would use is already in the docs and classes and forums. 

    Like 4
  • Bezona said:
    I first learned about YNAB several years ago like 8, maybe 10 years. 

     

    Superbone said:
    You've been using YNAB for all of a month and yet you make statements as if they are facts. Some of us have been using the YNAB method for over 10 years.

    I don't mean any disrespect, but the responses sort of echo what I'm referring to. A complete disconnect between the newbie and those more accustomed to the YNAB system. 

    I can assure you, resoundingly that as someone who's never used YNAB, its a huge pain. Very chaotic, difficult to maintain, difficult to figure out what's happening or why, and there's basically zero guidance within the app. To make matters worse, whether you're poor, rich or somewhere in-between the app is pretty useless in providing any direction in terms of managing money. Reminder and disclaimer, I'm speaking from the vantage point of a new customer, someone who needs a budget so I can stop living pay check to pay check. That's the whole point of the business of YNAB correct? To sell that product and service to those who need it... New customers, like myself? And to try and fulfill the hype so the new customers pay subscription fees, which is residual income for the business.

    I'm not attacking your YNAB, just saying it'd be great if they had something that new users could grasp and employ quick, fast and in a hurry.  Even just a facelift in the GUI would help, but even better would be automated guidance. For example: 

    Software > Welcome to YNAB blah, blah, etc. so on and so forth... Let's setup your first Goal 💪. 

    User > Uh... Rent!

    Software > Great how much is your rent and when is it due?

    User > $1800 due the 1st of every month.

    Software > When was the last time you paid rent and when is it due again?

    User > Last paid 11/15, due again 12/01.

    Software > Okay, its all setup! Just so you know, typically rent or mortgage is one of the highest priority items people have in their budgets. Is this the case with you? How important is your rent? A) the just important bill I have. B) its got a 15 day buffer. C) its important but I've got more pressing things.

    *RINSE & REPEAT

    Then after all the expenses are added and prioritized, it would do something similar with the income.

    Finally... 

    Software > okay, so let's get started and take care of those bills and expenses! Enter how much money you've got on hand right now.

    User > $500

    Software > Ouch, $500 isn't enough to pay all of your bills right now, but here's the good news, with that $500 you'll be able to take care of a couple of pressing items and the next time you get paid you'll be able to cover the rent in full. Here's what you can safely pay today: electric $45, water $50 and set aside another $150 for groceries and gasoline. On the 14th, which is the next time you'll have 💰 we'll take care of the rent, (and a few other items like your: phone bill, that gift for your niece's birthday on the 20th, and...... 

    *That's the premise anyway. Help. Based on the input the user puts in. Obviously, its able to help the user rearrange things as well, to suit their needs. The object is, to help guide and educate and train, teaching habits the user could grasp the more they use it.

    As the weeks and months pass by, the software and the user could work towards other goals like paying down debt, saving money and so on.

    I know its asking a lot of software, and those who create it and maintain it, but that would help people who are new and need the help.

    Ah, well I've beaten this horse enough and I can tell I'm working on the hard core ynabers nerves, so I'll stop here. Thank you for your replies and such.

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      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 1 yr ago
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      Silver Inspector Your proposal, whatever merits it may have, isn't going to educate, train, or teach budgeting habits any more than TurboTax is going to make someone a CPA. You're insulating users from the decision making and having the software do it. Users are unlikely ever to learn anything other than how to start a wizard. I might end up with a budget but I won't know much more about budgeting than I'll know about taxes based on the 1040 that TurboTax hands me.

      I get the superficial appeal of some kind of wizard. The main flaw, it seems to me, is either that the ultimate decisions are going to be up to the user, in which case the wizard is largely extraneous, or the ultimate decisions are going to be up to the wizard, in which case someone else -- namely the developers -- is budgeting for you.

      Like 3
    • Silver Inspector Every single veteran here was a newbie at some point. 

      Nothing in life worth anything is easy.

      Like 5
    • Silver Inspector 

      Let me clarify, in no way am I a veteran user. And I should have stated I heard about YNAB 8-10 years ago, I did not implement it then. I made the mistake of thinking that it was completely unobtainable for me because at that time (if I remember correctly) rule 4 was front and center, not so much rule one.
      I wish, oh how I wish I would have given it a second look. Instead, I completely forgot about YNAB until  December 2018 when I came across the book on audible. I listened to the book and decided to give it a try starting January 2019.

      Like 1
  • I'm not sure if this was something I read when starting, either in the support articles or on a forum, or if it's how my brain processed what I read, but here is how I have always seen planning and budgeting in YNAB:

    -I plan for my future expenses by having categories for them. Everything I think or know I will spend money on needs a category. If I know the date & amount, I put that in the category name to keep it front & center. I also set up scheduled transactions for anything I know.

    -Another part of planning is figuring out what I can afford on my usual monthly income. My monthly budget amount can't be planned to be more than that. So I keep a copy of my budget that I can play with the amounts to make it balance. I record those amounts in the category names too, although goals work as well.

    -Yet another part of planning is looking at the timing & accounts for different expenses. Will I have enough in an account for my known expenses? (these are usually bills & such that must be paid). If something looks off, I can usually transfer money or change the account a payment or deposit goes to.

    -I know based on my planning whether I can afford to live on my income, whether I need to trim expenses or pull money out of a savings category, or whether I need to get a loan or live on a credit card for a while.

    -Budgeting is what I do each time I get money. This is where paycheck-to-paycheck & having a monthly buffer differ. P2P budgeting may have to look a little more closely at the timing of bills to see whether an even amount is budgeted each paycheck or it's budgeted as a waterfall. I currently hold the money for next month in a category until I'm ready to budget it, as I don't like to forecast even that far :)

    -I revisit the planning steps often, as if my priorities change my categories need to as well.

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