Fessing up to bad habits... How to stop "stealing" from far-off goals?

Hi guys!

As I continue working really hard to pay down my debt, I'm finding it hard to set money aside for spending--even though I obviously continue to spend.

Saving money in my "income replacement" fund is easy because I look at it as a safety net for my future self. Yet, I've been trying to get better about building up my true expenses and I always find myself "re-balancing" my budget to squeeze some extra change into my debt pay down category. 

It seems setting money aside for big bills reminds me just how much money I have to put toward these recurring, seemingly never-ending expenses. It's so silly--it's like I have $20k in CC debt I'm having a ball paying off (with who knows how much in interest), but saving $1,500 for car insurance or new tires is like the biggest downer ever. Am I broken or do other people have this mental block? 

At the same time, I think -- well such and such is a ways off, so this money is better spent paying down my high interest debt. Same goes for my lifestyle categories like clothing, but guess who just got new riding leggings yesterday when they had $0 plugged into their clothing budget? 馃槕

I feel like YNAB has really got me thinking about the way I look at money... I see paying down my debt as such a long-awaited relief and a real accomplishment now that I am financially comfortable. At the same time, putting money into my savings account is just as fulfilling. But setting aside money to "spend," even for seemingly "fun" things (like clothing, which I used to love shopping for), has become astoundingly tough. 

I think I've lived using CCs as a "buffer" for so long that I'm finding it tough to accept the realization that I must spend my money straight out of my budget or I'm not going to ever break the cycle.

Any tips for the mindset shift I need to make? 

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  • The net effect is going to be a wash I think. If you don't set aside money for future expenses then when the time comes, it's just going to have to go back on the CC or come out of your Income Replacement fund. You might as well do it correctly and accurately so you know where you really stand.

    Pineapple Gal said:
    I think I've lived using CCs as a "buffer" for so long that I'm finding it tough to accept the realization that I must spend my money straight out of my budget or I'm not going to ever break the cycle.

    You just encapsulated the whole issue right there. That's exactly it. Once you start using your YNAB budget as intended, that's where the real magic happens.

    CCs are just a tool to spend. Your YNAB budget is made out of real dollars. Those are the dollars you have available to you. CCs are just a debt tool otherwise.

    Like 3
      • Pineapple Gal
      • Goal-Getter
      • Orchid_Wrench.11
      • 2 mths ago
      • 2
      • Reported - view

      Superbone I totally get the concept! I've added all my CCs as accounts into YNAB as I pay them down and to prevent accumulation of more debt. My issue is more of a mindset thing -- I was wondering if someone who's faced similar reluctance to tag money for spending had any tips for me on new ways to look at it other than the negative light I find myself seeing it in.

      I'm slowly getting in the habit of checking my budget and moving money before a purchase, but I'd love to get to the point where I'm earmarking money for certain categories where expenses are bound to come up, rather than pretending like I can put 100% of my disposable income toward debt, because that's simply not realistic for me.

      I always appreciate your perspective! I'm ever-so-slowly getting the hang of it I think. 馃榿

      Like 2
      • jenmas
      • jenmas
      • 2 mths ago
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      Pineapple Gal make assigning money to future expenses a consistent amount. 鈥 $X/month of my income is for clothing鈥 as opposed to 鈥淚鈥檒l fund this category when I have some discretionary income left鈥. I have around 60 categories and I鈥檇 say 95% get funded the same amount every month. And saving for your loss of income isn鈥檛 somehow more magical and noble than saving for new tires. All saving is just deferred spending. 

      Like 4
    • Pineapple Gal said:
      I'd love to get to the point where I'm earmarking money for certain categories where expenses are bound to come up, rather than pretending like I can put 100% of my disposable income toward debt, because that's simply not realistic for me.

       Income you use for necessary expenses that are going to come up is not disposable. 

      Just keep reminding yourself, or put a note on the mirror, or at the top of the budget: savings for true expenses is not disposable income. 

      As Superbone points out, if you don't do the savings, then when the expenses so come up, you just end up adding to your debt. Which defeats the purpose of paying down the debt. 

      Like 3
      • Pineapple Gal
      • Goal-Getter
      • Orchid_Wrench.11
      • 2 mths ago
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      jenmas That's a good approach! I just set up a "Monthly Savings Builder" goal for each of those categories for the first time so I can get in the habit of always putting a little money in.

      Like 4
  • Maybe tried hiding categories you want to resist stealing from? You'll have to unhide  them temporarily on payday and the day you use those categories for thier original intent but if they're hidden when you're trying to rebalance your budget maybe it'll be less easy to steal from them?

    Like 1
      • Pineapple Gal
      • Goal-Getter
      • Orchid_Wrench.11
      • 2 mths ago
      • 1
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      Mx Emmin I'm going to try this as well! I've just re-ordered my budget. Previously the "lifestyle" categories were at the top because I though that would be best for the app when I'm out-and-about. Now I've moved things around so we'll see how the new set up goes. 

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      • monkeyhanger
      • No animals were harmed
      • monkeyhanger.1
      • 2 mths ago
      • 3
      • Reported - view

      Pineapple Gal You can do both because the app lets you pin categories to the top of the screen. I would set up the web budget in the order that makes most sense for your budgeting decision-making. Then in the app, you can pin the categories you're most likely to use out and about so that they appear at the top.

      Like 3
      • Pineapple Gal
      • Goal-Getter
      • Orchid_Wrench.11
      • 2 mths ago
      • 1
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      monkeyhanger I didn't know that. Thanks! 馃榾

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  • I have a category group at the bottom of my budget that is called No Pilfering! In other words: you're not alone. 馃槄 I think it is an extension of the original problem, like you pointed out - it's always been hard to budget for clothing, and yet we all need and do buy clothing. You're obviously making progress - but maybe some gentle reminders in your budget will help you to sort out where to move money from.

    Like 3
  • Oh! One thing that I did recently was take a closer look at Average Spent and did some adjusting of my Budget Template to account for reality. It has been really helpful!

    Like 2
      • Pineapple Gal
      • Goal-Getter
      • Orchid_Wrench.11
      • 2 mths ago
      • 3
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      Marisa That's a great idea! I've been using YNAB for a few months now so that should help me assign more realistic amounts. Now that I've reset my outlook and re-ordered my budget items, I've already started building up a few categories, so I consider that progress! :) 

      Like 3
  • Pineapple Gal said:
    My issue is more of a mindset thing -- I was wondering if someone who's faced similar reluctance to tag money for spending had any tips for me on new ways to look at it other than the negative light I find myself seeing it in.

     For a long time my mindset was to optimize for the numbers, which is never ending. Now, I've shifted my mindset to optimize for good financial habits that fit into a well balanced life. That shift has made my finances simpler and calmer. I'm not falling behind on anything financial.

    Like 4
  • It may help to think about saving in these True Expense categories in two stages: During Debt Payoff and Post-Payoff. When I was paying off CC debt  I would look at a my clothing category and think hard about what I needed in the next month or two (in case I needed to have a little money accumulate to have enough to spend on a new pair of shoes). I put money in the category, but with a very specific purpose. Once debt was paid off, now I send a more generous amount there monthly to accumulate. I don't spend from it every month, and I have also WAMed from it when I've had other needs. But having some buildup there makes it easier when I want to see a comfy sweatshirt I want, and the jeans I love are on sale, so I buy two pairs.

    Like 1
    • Navy Blue Router yes doing that with clothes have actually allowed me to grab sales to save money and not just spend cause it looks like a bargain. I knew I wanted a couple summer shirts in the spring but knew they wouldn't be on sale till fall. I put the money away and spotted a July sale and here I am with a couple new shirts midseason. All through June winter shirts kept tempting me but I knew what I wanted. hard to do but quite an accomplishment for me despite how simple it sounds. Last winter I wasn't as smart :)

      Like 1
  • Personally, I get a kick out of the age of money. My first goal was 30 days ahead. Before I needed a budget, I remebered that being thirty days ahead was a minimum for me, I always kept nexts months expenses in the bank. And I felt rich.

    Several months ago I started to allocate money in the months ahead instead of just this month. For instance, it's July and I have all of August covered and half of September. I actually move forward to September and assign money and pay no real mind to the available since it will go up and down before September gets here. Once I got past that, and that took a couple months, I started to pay attention to available once again but in a different light and began to learn the finer points of the goal system tools they gave us.

    Now my available funds a couple months out can go up and down but with "correct" goal settings I can watch for yellow. Like in a couple months I will be light on Christmas savings again but I have time to find that money. Augusts HBA funds look kinda high LOL. Subscriptions are creeping back in etc. These are chronic problems that YNAB helps to reign in before they cause big problems.

    Like 1
      • Pineapple Gal
      • Goal-Getter
      • Orchid_Wrench.11
      • 2 mths ago
      • Reported - view

      Navy Blue Disk Can you tell me more about your approach?! I know a lot of YNABers use a "Next Month's Money" category (or whatever they call it), but plopping my spare dollars into this category is too vague for me--I want to know how many months I have and for what bills. 

      I think I've been doing something similar to you by putting extra into each category when I can. But, it sounds like you're flipping ahead to that actual month to put the money in, right?

      I like that idea because now, if I've funded September's car payment and it's still August, I cannot see that money sitting in today's "available money" column for the category--but I can find it by flipping forward a month. That sounds like a handy way to avoid the temptation of money moves and helps me see how many months I'm actually ahead, and where. 

      Navy Blue Disk said:
      I actually move forward to September and assign money and pay no real mind to the available since it will go up and down before September gets here. Once I got past that, and that took a couple months, I started to pay attention to available once again but in a different light and began to learn the finer points of the goal system tools they gave us.

       So do you allow your "available" amount to go in the red now? Do you un-budget for things when this happens or allow your income to cover it in the time between? 

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    • Pineapple Gal Hi Pineapple, I'm no expert so I am still learning this. I'm not sure I can teach it but I will try. Basically yes I do flip to the next month but before I do I make sure this month is completely in order

      There are three parts to this maybe 4.

      1st you have to set goals for each of you categories, for most I use the for spending option and I get my number for that goal by clicking on that line and then on the right, looking at average spending and round up a couple dollars since its only an average. You need a few months of accurate entries for this number to become valuable to you.

      2nd I of course need some money to assign :) Payday works but if you select the whole budget instead of categories, on the right you should see under auto-assign "underfunded" and "reduce overfunding" These don't work right unless goals are right, hence step one. If you hit reduce overfunding, it will automatically give you money to reassign. Its not perfect though because our goals aren't yet refined and it doesn't tell you where it took money from so.... look at 4 or five categories, reduce overfunding, UNDO. scroll down through some more categories reduce overfunding again and undo again till you find where its finding the money.

      3rd Once you find your pot of gold, you probably have to give some back. Now is the chance to watch the underfunded option do its magic. Same as above hit the "underfunded", observe and "undo "again and keep scanning categories till you find where it put your money. As I said in step one, this is only as good as your goals and mine are still a work in progress but it is kinda fun so its ok and you won't have to distrust it forever, just until you trust your goals. I don't know about you but my goal setting  undergoes constant refinement. I over estimate, under estimate but eventually I "got to get real"

      4th Now you can flip to the next month and get the payoff of all that setup work. You should have some money in your "to be assigned" thing. Two ways to do this, overall budget or one category at a time.  Lets flip to September, go to electricity for instance, click the category and the "reduce underfunding". Boom!!!, It takes whatever it needs to meet your goal out of "to be assigned" and assigns it to electricity and no more. Have some leftover? How about gas? reduce overfunding. Booom. Not enough to cover all of September's gas bill? That's ok, come back to September gas on payday when you have more money to assign and underfunded will take what it needs and leave the rest. Continue to move down your yellow categories till they are green.

      Hope this is clear enough for you to move forward. I just found some overfunding, hmmm back to work.
       

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      • Bruce
      • Software Engineer
      • Bruce
      • 2 mths ago
      • Reported - view

      Navy Blue Disk One quick note, do you know about "recent moves" in the budget?   if you click the remove overfunding, you can do it for the entire budget, and then just look at recent moves.  it will give you the entire list of categories that it borrowed from.  You can still undo once you see that, but you don't have to go little by little.  Do the whole thing, look at recent moves (it's in the header section of the budget) and then you can click undo.

      Hopefully this will save you a couple steps.

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    • Bruce NO I DIDN"T  :) :) Thanks so much. I will look for it

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    • Navy Blue Disk OMyGosh, right in front of my face lol

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  •  saving $1,500 for car insurance or new tires is like the biggest downer ever.

     

    One thing that YNAB can do for you (it certainly has for me) is make you look at these costs and ask - do I really need to pay that much?

    Jesse says we should 'embrace scarcity', meaning, 'admit you don't have as much money as you wish you had'.  Your credit card habit has allowed you to pretend you are much better off than you are.

    Maybe it is time to admit to yourself that your car is too big for your salary? A smaller car would have cheaper insurance and tyres ...  For example.

    Maybe in your lifestyle selling that car is a red line, and you really need it. So what other costs could you reduce? Is your cafe/coffee habit out of control? Or your internet provider really expensive and there is a cheaper one out there? Or .... what?

    Basically, if you needed thousands in credit card debt to fund your old lifestyle, and now, not only do you not have that *fake* 'income' but in fact it's a cost (because you are paying it off) then something has to give.

     

    Your budget will tell you what. None of us can tell you (because it's your life and your budget) exactly what to cut. But I think you can probably see that something has to go.

    Good luck finding it and try to enjoy saying good bye to it. :)

    Like 3
      • Pineapple Gal
      • Goal-Getter
      • Orchid_Wrench.11
      • 2 mths ago
      • Reported - view

      lindsay_g I totally agree with this mindset and I've been watching all of the YNAB videos relating to caring for your future self, not living on the credit card float, and so on.

      My car is a necessary expense, but its insurance...not so much! I go through the best-ranked provider and it is SO expensive (I checked--it's $1,900/year) even though I have a clean driving record. I'm paying for low deductibles and very high coverage. My fear of potentially "needing" insurance for an accident makes me keep coming back to them even though I could pay less elsewhere. The fear thing is a whole other can of worms I think I need to open now that I'm budgeting!

      May be better to put aside a few grands in savings and increase my insurance deductible? That would get my premium down a little more, or perhaps I get past the fear factor and go with a different company. I'll be looking into that since it's almost time to renew. :) 

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    • Pineapple Gal shop car insurance every couple years, Your current costs will never drop the price for good records though many have options designed to keep you hooked to them like reducing deductibles etc. Pay them no mind, eventually your deductible should go into a category goal, as the saving in this goal increase you can then reconsider increasing deductibles. 

      I have got hung up on loyalty also, it doesn't pay the bills. The prices you pay for insurance are more set by what is called experience.  Insurance company has to pay one million in claims in your zip code. Insurance company B decided to find a bunch of older customers so Only paid out half a million in claims. Insurance company B can sell cheaper insurance and in most states is required to adjust their rates to reflect their good decision and or good fortune.  This year you got ot Insurance company B. :) In a few years Company B Has to pay out more because they took on all these new price shoppers. Suddenly A has the safe people. Time to go back to Company A. when comparing insurance prices always compare apples to apples i.e same amount of deductibles, same amount of coverage etc. often an agent will reduce your coverage to offer a better price but then you stumble upon the fact later that you are underinsured. State minimum coverage's are only good for people that are too poor to be sued. 

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      • Bruce
      • Software Engineer
      • Bruce
      • 2 mths ago
      • Reported - view

      Navy Blue Disk I hadn't shopped for years, and this year I decided to.  I ended up saving a couple bucks over $100 EVERY MONTH.  For the EXACT SAME coverage!  So, yeah, of course I jumped ship.  Even though I had "earned" $0.00 deductible from sticking with the old company so long.  

      So, yeah, go ahead and shop around, you'll be glad you did.

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    • Bruce lets see??? would I rather pay 100 a month for years or put 500 dollars savings in the bank???? Hmmm :)

      Like 1
  • Pineapple Gal Nothing goes in the red in the future months but if I flip to October its all yellow since I am below my goal. Yellow seems to be under goal, red seems to say overspent. One needs more money assigned, the other says, "spend a little less" 

    I noticed it won't let me go past October. I don't know why that is but there is no red in future months that I can access so far.

    If I go into the red in THIS month I immediately fix it with this months money and revisit my goal I set to see if its me or the goal. The first month I did this I had to rob from the next month and along the way I learned a lot about setting goals for every category and not just savings categories. These do go red but not too often but often the same items.

    I creep the goals upwards a bit but slowly. The average feature is just an average. I average about 22 dollars a month for books but this month picked one up for 29. red! I reset to 25 but I often get books for 30 so I may need to  have 30 available at beginning of the month goal and let it rollover if I don't use it so I can avoid the red. Red makes me steal from my own goals and we are trying not to do that in this thread.

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  • Navy Blue Disk said:
    I noticed it won't let me go past October. I don't know why that is but there is no red in future months that I can access so far.

     It only goes out one month further than the last month you've budgeted.  So apparently you have budgeted in September, but not in October.  If you budget .01 into any random category (and then back..  You don't have to keep it in that category) in October, you'll be able to go out to November, etc.

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    • Bruce another new button/rollover found, thanks again

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