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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  • Habanero Salsa said:
    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 agree and you're correct, however it'll help the user reach their end goal much easier and safer. And, in saying that I'm really eating crow because as a collision repair professional, I'm often harkening back to the days when cars didn't have airbags, sound deadening, phenomenal brakes, steering, suspension and tires. I grate my teeth and smile when folks come in after smashing their cars up in some avoidable incident, but what I really feel like telling a customer with a smashed up 2019 anything, is "Lord what would your driving be like in a 73 LeSabre? You'd be lucky to make it out of the driveway alive." But I've also come to appreciate that while people have become much worse drivers because their vehicle's onboard computer and safety systems do so much of the driving for them, I can't argue with the fact that cars are safer, more reliable and collisions way less severe than in the good old days. People walk away from accidents unharmed, that would have otherwise been severely harmed them in the old cars. Take for example the #1 safety device in a vehicle, the one that's saved more lives than any other innovation... Have you guessed it? Stability control. Something nobody thinks about, because its all behind the scenes, doing its job to keep their car stable while they zigzag through traffic at 20 or 30mph above the posted speed limit, whether its dry, raining, snowing, etc there are modern technologies at work, keeping the driver, their passengers, and other drivers around them out of harms way. I can't recall one complaint from anyone about it, because they aren't even aware of the engineering, programming and software that's making them feel like they've got good driving skills.

    Not sure if that's the greatest analogy or not but the point is, that sometimes people just want to get from A to B without needing to master certain skills. In my example, its driving. In yours, finances.

    Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 1 yr ago
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      • Reported - view

      Silver Inspector I think that's a pretty good analogy, actually. And expert system software does exist. It's just that nobody has combined that with budgeting software to date as far as I know. Hey, if you can spearhead that and make it work, I think your financial issues will be a thing of the past. 🙂

      Like 2
  • dakinemaui said:
    Every single veteran here was a newbie at some point. 
    Nothing in life worth anything is easy.

    Exactly what I was thinking while reading through Silver Inspector 's post. I do remember reading the support materials over and over way back in the day. It took me a good little while before it clicked for me. I learned even more when joining the old forum back in 2010. I didn't become a YNAB expert over night, that's for sure. The thing is, the software is more user friendly now than ever. There are some getting started systems in place now that weren't there in the past. Also, there weren't classes available like there are now.

    I do think you have some good ideas, Silver Inspector . I don't know if there's anything like it on YNAB's road map but you could suggest it to them. Right now, their support materials are mostly separate from the software. But if they ever do employ some expert systems, it will be too late for you. As far as I know, there's nothing like that currently on the market. Unfortunately, you're just going to have to figure it out like the rest of us had to.

    I'd recommend Dave Ramsey's book, The Total Money Makeover. That in conjunction with YNAB is in my mind the best combination for somebody in debt and not making enough to cover their basic expenses. As far as the latter, there are only two choices. Cut down your expenses until they're less than you make or figure out how to make more money. Best of luck to you on your journey.

    Like 2
  • Superbone said:
    I do think you have some good ideas, Silver Inspector . I don't know if there's anything like it on YNAB's road map but you could suggest it to them.

     Thanks, much appreciated. I've actually done Ramsey's FPU, but his budget app is really pretty poor.  I did okay with it, but budgets are all pretty much the same, in that they don't really represent real life too well, unless you're way ahead of the curve. That's one of the reasons I was googling around looking for some decent budgeting software when I found YNAB. Its probably better than Everydollar in some ways, but still not really much help there for someone trying to get un-broke. There's such a limited amount of time to work on finances in any given week, the more streamlined it is, the better. I've been looking more into the simplebank app which  appears to function similarly to YNAB, without as much manual intervention. Still not as advanced as one would think money management software could be approaching 2020, but compared to others its fairly advanced.

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 1 yr ago
      • Reported - view

      Silver Inspector Yeah, I recommend Ramsey's book, not his budgeting software (nor his investing strategy but that's beyond the scope of this conversation). His budget is more of a traditional budget while YNAB is a zero sum budget which I believe is better for someone trying to get un-broke. I don't think you're giving YNAB a fair shake in that regard because there have been plenty of people that have become un-broke using the YNAB system and now swear by it. I hope the simplebank app works out better for you and I'm sincerely rooting for you! With hard work and perseverance, you can do it!

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  • Just an update to  this to say  I think possibly I figured out how I can go from broke and frustrated with YNAB, to having a surplus and actually using it effectively. I racked my brain trying to figure this paradox out, but think I'm on to something...

    After listening to Jesse's "Debt Stories" on his Podcasts, its pretty clear that there are people that have utilized YNAB to get from broke to out of debt. I've made some big changes to my personal life to try and take advantage of the software's ability to straighten lives out.

    Like Jesse says in his podcasts, people's brains work better when they have constraints. My big constraint was that I wanted to use YNAB software to get on track,and out of debt, but  since its setup to work from the position of  being current and having at least a month's worth of cash on hand to budget properly, I had to get to that point quick fast and in a hurry. Otherwise, being broke and behind on bills, it was like chasing my tail and having nothing to budget without overspending seemed futile.

    So, what I did was a slip stream refinance to give me some breathing room between mortgage payments. Then I took all but a couple of my credit cards and started a debt management program, to get some  additional cushion between months. My credit score is tanking for awhile, but it should allow me the opportunity to actually have money to budget according to the YNAB principles. I'm about to go into February with a surplus that I can budget! As long as I follow YNAB and don't experience a job loss or major financial setback I should be able to make a go of it from here.

    Like 1
      • dakinemaui
      • dakinemaui
      • 10 mths ago
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      Silver Inspector Well, you have been busy. Good luck with continued progress.

      For anyone else reading this, there are ways to use YNAB just as effectively without being a month ahead. It is a little more effort, so think of it as "sweat equity".

      That said, I know of no one who has used it both ways that did not prefer to be ahead and budget with month-sized chunks. 

      Like 8
      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 10 mths ago
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      dakinemaui I couldn’t figure out how to appropriately reply to this comment last night. Your reply is very well articulated as always. 

      Like 3
    • dakinemaui as the "someone else" reading this, please could you give me a pointer towards this info. 

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      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 10 mths ago
      • Reported - view

      Slate Blue Falcon I’m on my iPad and searching on this forum is a nightmare. But it boils down to the fact that your money has only one job: to sit until it’s needed. Each time you get new money, you need to decide how long it needs to sit. Some money will sit until you get in the car and go buy a burger at the drive through. Some money will sit forever in a retirment fund. Most money will be somewhere in-between. 

      When you can’t fund a month at a go, you’ll fund your categories piece by piece. Perhaps each week you’ll add $60 to groceries. If your rent is $1000, maybe you’ll budget $500 from your first paycheck and $500 from your second paycheck. My most extreme example was that I only had $100/week to spend on everything that wasn’t a fixed bill, so I budgeted for $36 haircuts every six weeks by setting aside $6 each week. So yes, if you set a goal, your rent will show that you need another $500 for half the month because you *do* need it. It doesn’t mean you have to twist yourself into a pretzel to fund a month at a time, though you should absolutely prioritize having enough cash to budget a month at a time. What it does mean is that from your next available money, $500 will need to go to rent. 

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    • WordTenor Thank you, that's a good way to look at it, I know I'm guilty of perfectionism and if I'm unable to do it by the book (failing) I lose the motivation to keep trying. Creating manageable expectations is something I'm working on in other areas of life so it makes sense to do the same with YNAB. 

      Since September last year I stopped budgeting as the acute awareness of lack of funds was stressing me out, and instead I focussed my efforts on raising my income so I did have enough to budget on the monthly. However, the fear of going to the effort of budgeting everything only to once again find I didn't have a months funding was enough to stop me trying. I can see now that my issue stemmed more from managing my stress than the budgeting. 

      What I've learned is it's wiser to be aware of impending budgetary requirements and be ready to address them asap, than to give up /put my head in the sand/ leave it to luck. The sense of power/ control budgeting brings can have a greater positive impact than leaving it to pure chance. 

      Thanks again.

      Like 2
      • dakinemaui
      • dakinemaui
      • 10 mths ago
      • Reported - view

      Slate Blue Falcon The normal YNAB recommendation when you receive income is to think about what it needs to do before being paid again. Some of it will be used immediately, and some needs to partially fund something (to be combined with additional funds later). Often people will create category groups to help allocate (e.g., Check 1 and Check 2) and drag categories into the desired positions.

      The biggest issue with this -- not unique to YNAB, BTW, as it's what everyone naturally does -- is you have to identify a subset of categories that "fit" into each paycheck. This is further complicated by the fact some expenses (e.g., Rent/Mortgage) are too large and must be split across multiple checks.

      If that sounds familiar, that's simply the True Expense concept (Rule 2). YNAB explains it on a monthly basis, but that doesn't work optimally unless you're paid monthly (which I assume is not the case). My preference is to apply it on a paycheck basis. ALL categories are split across checks -- even monthly expenses. This makes for a consistent process which reduces mistakes and improves clarity.

      Every time you're paid, just rip through your categories incrementing the budget value by the per-check contribution. Do this on a priority basis, because you'll stop when TBB is $0. The things that don't get money are therefore less important.

      The per-check portion for normal bill categories is the remaining amount needed divided by the number of checks you'll budget before the outflow. You can record this right in the category name or notes for reference.

      For discretionary categories like groceries, budget enough to get to the next paycheck. (Again, use the same amount every check.)

      Don't bother flipping screens, just budget to the month in which you receive your checks. It's simple, your plan is all on one screen, and you'll also never be prone to the Stealing From the Future design flaw.

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      • dakinemaui
      • dakinemaui
      • 10 mths ago
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      Ultimately, budgeting in month-sized chunks is better, but you need to get ahead first in order to do that. As far as getting ahead when applying Rule 2 on a paycheck basis, I think going old-school is the way to go rather than budget piecemeal to future months. Create a category called Transition To Monthly, and start chucking money into that category like any other bill. The total you need is your monthly income minus expenses paid before your first check. When you've got that much money in the category, you can stop the paycheck-to-paycheck budgeting.

      The transition: release all the money in the Transition category and budget the rest of the current month.

      Ongoing monthly-budgeting: Put your paychecks into a temporary holding category to get them out of the way. At the end of the month (or when you've got all of your checks), release those funds and budget all of next month in one shot.

      Like 2
  • dakinemaui said:
    Every time you're paid, just rip through your categories incrementing the budget value by the per-check contribution. Do this on a priority basis, because you'll stop when TBB is $0. The things that don't get money are therefore less important.

    What do you do if you run out of money but still have categories that "need" to be funded? Something else has to give.

    One reason I favor the Per-Check True Expense approach because I think it's easier to see what has to give compared to the typical "paycheck-specific subset of categories" approach. There is no "other" check that might let you "make it up"... somehow. The total of everything you want to fund is constrained by your single check amount. No gray there.

    So what gives? Two things: scope or timeline.

    Scope is straightforward -- make some higher priority expense less. Instead of a $200 cable bill, cut it down to a $10 Netflix bill. If a vacation is a priority (your budget, your call, right?), instead of a $3000 vacation away from home, have a $300 "stay-catation". Obviously, the difference required per check can let you fund lower priority categories.

    Timeline -- you push back the outflow to allow you more time and contributions will decrease. Let's say you are saving toward something  that will outflow 4 months from now (e.g., a vacation). If you push that back to take the trip in 8 months, then your monthly contributions will be cut in half. The difference can be put toward something lower on the priority scale that wasn't originally funded.

    A thing related to timeline is moving beyond the startup-phase. An annual expense due in 3 months after you start will require whatever it requires (amount / # of paychecks). However, once you've paid it, you can spread those contributions over a year's worth of paychecks, resulting in contributions 1/4 the size as before. Again, allowing you to go deeper into the priority list.

    Lastly, just be consoled by the fact it's the lower priority items that are falling by the wayside. No one can afford everything they want, but you can make sure the important things are funded.

    Like 2
  • Have you tried to create a journal and post all your expenses and ask fellow forumers to help you by suggesting where you could cut  ? It uses to be done a lot on the old version. It is clearly not a pleasant though to have your lifestyle scrutinized by (friendly well meaning) strangers but you could get some useful suggestions?

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    • Blue Mermaid 

      Blue Mermaid said:
      Have you tried to create a journal and post all your expenses and ask fellow forumers to help you by suggesting where you could cut  ?

       Hi Blue Mermaid, thank you.

      The suggestion would certainly be something I'd do, (pretty sure we're all anonymous on here anyway). Luckily, we've got a lot of experience being frugal and our biggest obstacle was our lack of managing our money and spending it in the right places at the right times. I gave up on money management software after MS Money 95, (which was awesome and so much better than QuickBooks), transitioned into I'm not sure what exactly, but it was terrible. Ever since the implosion of the Microsoft product, we did nothing in terms of tracking and at a couple points tried QuickBooks, and we tried Mint, but neither worked very well, so we just kept on checking the bank balance, trying to remember what bills were coming up Vs paydays, but that's a recipe for disaster when a paycheck can't be counted on long term, (life happens), or isn't enough to cover everything. That went on for years / decades really. Total stress.

      More recently, in 2018 after buying a new home and several months following a couple of back to back job changes and losses, we simply couldn't sustain our expenses. That's when I went looking for solutions... I needed a budget!

      The biggest expense that was ever fluctuating and screwing up any planning for expenditures was health insurance. Whenever we'd need to get insurance through the AHC marketplace, or COBRA the costs were enormous. Even if one of us were lucky enough to have access to group insurance through an employer, having a spouse on the plan is super expensive. That led to robbing Peter to pay Paul, using the credit cards, etc. It got so bad, eventually we were running almost a month behind on nearly everything and the interest, fees and even just minimum payments on credit cards will absolutely eat you alive if you ever pass 30 days, which then takes away money needed for paying even the basics like mortgage, buying groceries and so on. 

      We're in our 4th month or more now with YNAB and sticking to it. In that time, we've made several strategic money decisions and incorporated them. My wife and I both have access to health insurance through our employers, so we both got our own plans, (its so much cheaper singularly than having a spouse on a plan). We also took advantage of a slip stream refinance to give us some breathing room by skipping a couple mortgage payments. I had to say goodbye to my decent credit score and put the majority of my credit cards into a DMP (debt management program). We're using YNAB diligently and this month, SHOULD be THE month we can finally get to the point of being able to actually use a budget properly. As great as YNAB is, its still really designed to around the having all your money up front, then allocating it approach. That's fine as long as you're ahead of the curve. Its really awful when you're chasing it. Basically at that point, all it can do is bring awareness, (certainly better than nothing), but with the "we won't tell you what to do with your money" mantra, it doesn't help a broke person figure out what to do with the money they're trying to budget. The software is setup for being at least a month ahead, which makes it extremely confusing when you can't fund anything. The YNAB book and podcasts often talk about "having stacks of cash" as well as amazing debt stories, but these are all past tense from people who somehow scratched and clawed through their messes. With enough diligence and almost any type of money management system, this can be done obviously.

      I had originally posted this to draw attention to the obvious short coming of the system, (and hopefully someone who works at YNAB would discover it). Now that YNAB has a platform and the technology, imagine what they could do to help the broke populis if they took their know how and applied it to an offering that looked at budgeting from the perspective of someone in the hole trying to work their way out!

      Like 1
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