2nd week on YNAB
On our 2nd week of nYNAB and we are dropping accounts like crazy. 7 checking accounts have been dropped to $0 and all we have to do now is call the bank and close them. We are keeping 2 checking accounts in the budget for the next several months. One is to pay the loans at the same bank the accounts are at, the other is my wife's "business" account. We now have a main checking account at the local credit union where my business account is situated. Also a Money Market account where our reserves (emergency funds, auto maint, house maint, etc) and it earns 3%. Checking is a 0%.
We don't have much green at the moment and don't expect to for another couple of months. 2 months behind on mortgage and loans. Playing catch-up on those for the next 2-5 months. Getting a little aggressive on Emergency Funds. We want 3+ months in there as soon as we can.
We are loving YNAB. Being able to see both the accounts and the budget on the same screen is wonderful!
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Congratulations on getting all of these pieces in motion! You are already making great progress by getting organized and simplifying. 馃憦
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Okay, this is going to be a little hot pokery and I'm sorry but I hope I misread you. Why do you have emergency funds if you are behind on your mortgage? Take every cent you have saved and send it to the mortgage company in the next five minutes! They can take your house from you! Don't risk homelessness just to feel good about having a savings account!
I am not a big Dave Ramsey fan for lots of reasons, but his 4 walls theory (You tube: https://www.youtube.com/watch?v=3_RX4gT20EM) about what to do when you are behind on your bills is really sound. It is, food, utilities, shelter, transportation, basic clothing. In exactly that order. Eat. Keep the lights on. Keep a roof over your head. Keep your ability to go to work. Make sure you look appropriate for work. Don't pay the electric billl if it means you won't be able to eat. Don't pay the mortgage if you won't be able to pay the electric bill. And so on. But the savings account, debt paydown...all of that comes *after* you have those things squared away.
I'm not particularly prone to hyperbole, but this is an actual big mistake. I beg you, don't do it. Pay the four walls first. It's great you're feeling confident about YNAB and that it is giving you clarity. Now use it to actually put your money where it needs to go first, and worry about the other stuff later.
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WordTenor : I can see how it comes across. I missed a word. I was trying to say: Once we are caught up and back on a normal schedule, we will be socking away some money for emergency funds. Our E-Fund has been $0.01 for the last 15 months. When I lost my job in Jan, we had no buffer. This caused a slip in payments - and it was an easy decision. No money, no payments. Anywhere.
I wholeheartedly agree with you. We've been using
EveryDollarfor the last 5 years. And in that time we never got an E-Fund up over $400. And I was running 9 accounts as a quasi-envelope system. I also had a 14 tab planning spreadsheet to track every thing we were doing. With all of that I did not have the clarity that I have with YNAB.Now that I am back to working for myself, our income went up 130% from last year. This means, for us, that instead of constantly sitting at 98% money in going right back out with no room for goals, let alone aging money, we will be prioritizing that extra 30% for buffer, e-funds, and debt pay down. But - not for another couple of months...
Hope that makes more sense. And as a side-win, I was able to talk with the mortgage company and we have an agreement in place. There is no action on their part to start any proceedings and the arrears have been calculated for a payment plan over the next 5 months *with* no reporting to the credit bureaus! We've already made the first payment and have put nearly 1/2 of the 2nd into the account. All of the other loans are back inside the 30 day late window so none of them are reporting either.
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Keith & Kittery Barrows Oh good. That makes me less worried for you. But I still wouldn't focus on anything except getting current on the mortgage until you are in fact current on the mortgage. Even if you have a payment plan, being behind on a secured debt is a terrible idea. A lot of other things can happen in five months. Someone could get injured. Someone could sue your business. You could have a fire or flood or a car accident. And since they're already "being nice," they probably wouldn't hesitate to throw the book at you if something else happened. Hopefully, your house payment is around, or less than, that 30% of your income. Two months of the new income, making double mortgage payments each month, should be enough to get you current on your mortgage. I wouldn't wait five months to do it no matter what they're reporting or not reporting to the credit bureau.
Like I said, I'm not a big DR fan, and I'm a big advocate for a balanced rational calm approach to your money instead of the "hair is on fire/ you have to throw every spare cent at this" approach. But in this case, the calm and rational approach is the hair is on fire approach. Get current on your mortgage as fast as humanly possible.
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WordTenor - That is indeed our plan. Another piece of missing info: We need to pay last months and this months Health Premiums. It was extremely surprising that COBRA was cheaper than the Market. And COBRA's cost you ask? $1,411.50/mo! Just a little less than our mortgage! And yes, we use it. Look up EDS (Ehlers-Danlos Syndrome) sometime. With this in the mix, mortgage will be 100% caught up within 90 days, health insurance started (and caught up) within 60 days. Health is #1 on our list. In fact, house is not #2 or even #3. While emotionally draining to lose the house, that we can survive. :)
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Glad you are here.
WordTenor brought up some very good points. From what I see, it looks like you are on top of your arrears.
Glad your situation has changed. Hoping you have great success with both your business and budget. Looks like you are on the right track.
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4 weeks into YNAB now. 2 mortgage payments made this month. 2 health premium payments made this month. We are now officially back to regular payments, plus paying off the late fees on the mortgage for all major areas of our life. Starting next month, we will be upping our debt snowball a couple of hundred dollars. One debt was paid off and we are adding the little extra bit to knock down the next in line.
