It was not easy at first, but I have leveled up my life with YNAB

I have been using YNAB for six months now and I am getting pretty good at it.  It has already forced several good habits on me such as saving for large purchases before buying even when I buy something with a credit card.  I wanted to post in here to share my experience and maybe find ways I can do it better.  I "made a fresh start" three different times when I discovered that I was doing it so wrong that I had no choice but to start fresh.  I feel like at this point I am doing it mostly right.  


Aging Money

This was a simple and powerful change for me.  I am an acrobatics teacher and my income is different every month.  Saving this month’s income to be spent next month added a lot of sanity to my life.  Before YNAB I didn't know how much money I made last month or last year for that matter.  I have many other friends in the same boat, who work several under-the-table jobs, and it is confusing keeping track of it all.  People who have a steady income have a huge organizational advantage over people like me. Having a tool like YNAB is necessary to keep it all straight.


Deferred Income

I have a deferred income category.  This is a little redundant because I can see what money I made from what payee in the income/expenses report, but I like seeing it at the top of my budget as well. 

My Monthly Allowance
My base expenses are about 1500 a month.  When the new month rolls around I put 1500 dollars that I made in the past month into the new month.  It took a few months of observing my spending habits to see how much money I spend each month on average.  On good months I make 4 or 5k and on bad months I make nothing. I try to spend only 1500 a month total and on good months I put the extra into my 6 month fund and on bad months I transfer money from my 6 month fund to my monthly allowance.  After realizing that I could make a monthly allowance I decided to make a weekly allowance. This is better because I can make sure I don’t spend too much at the beginning of the month and go over budget by the end of the month.

Debts and Savings
I read “The Richest Man in Babylon” and the book suggests that I live on 7/10ths, pay 2/10th to debts, and save 1/10 of my income.  I am trying to apply this to my budget. The first time I tried this I spent 2/10th of my total income for one month on my student loans.  I later decided this was a bad idea because I need to take my expenses into account, otherwise I will run out of money. Now I apply those fractions to my surplus money each month. 


This has been the single most confusing thing about budgeting for me.  I tried budgeting with Mint a long time ago and abandoned it quickly when faced with the problems with reimbursements.  Sometimes I have dinner with my girlfriend. We split the bill. I pay all of it with my debit card and she reimburses me with venmo.  I could not figure out how to do this in Mint. The process is about the same in YNAB but I was more determined so I figured it out. At first I had Reimbursement categories for many common categories like dinner, gas, groceries, bills, but I got rid of all of them because I learned that a different system was less work.  I overpay, then I am reimbursed. The money in my budget reflects the money I spent. After months of practice I can do reimbursements easily.  



In the first month I had all of my accounts linked and I reconciled once a month.  This was a huge mess. I thought linked accounts would be better but it only made things more confusing for me.  Sometimes I would get two alerts for one transaction. This would happen if I paid for something with paypal when I had no money in my Paypal account and paypal pulled money from my checking account.  I would get an alert from Paypal and from checking. Now I manually reconcile every day. I make most payments go through checking to make reconciliation easier.

YNABs Automatic Features
Over time I have used less and less of YNABs automatic features.  I stopped linking accounts first. I used to clear transactions through alerts but this always got out of hand quickly.  Then I tried manually reconciling but I did this once and month and that also was a huge mess. I emailed YNAB support for help on this problem and she said I should reconcile at least once a day.  I thought this was crazy but I tried it and I can see the benefits. Clearing transactions is vastly easier when I still remember what I bought the day before.

I set up all of my regular bills to automatically post in YNAB and this sort of worked but there were problems.  My car insurance varies by a few dollars each month so I had to change it when it went though. Sometimes bills would post in YNAB before they would post in my checking account.  That was annoying. Once I was reconciling my account manually every day there was no need to have them post automatically anyway. Now when my car insurance posts in my checking account I record it in YNAB and that is that. 

I stopped making goals for budget categories.  I found these to be problematic because I would make a budget for clothes for instance and then not buy clothes for a month and then the money would roll over and then twice the amount would be budgeted for clothes.  I did a lot of extra work moving money around which was building up in categories which I did not use very much. Other categories I would spend more money than expected and the budget would be red or yellow and that hurt my brain. 

Later I even stopped planning out my spending for the month.  Now I start with all of my budget categories at zero. If I spend 50 dollars on gas then the category is red for the day until the next morning when I reconcile and transfer money from my monthly allowance to my gas category. 

My biggest shock in tracking my expenses was in seeing how much money I spent on food.  Food is my biggest expense. I am living with my family so I don’t pay rent right now. One month I spend 700 dollars on food.  Part of the reason this was so high is because I was traveling and eating out 2 or 3 times a day. That comes to 8400 a year and I make about 30k a year, so it would behoove me to spend less money on food.  Lately I have gotten this down to 400 a month. When I travel I take muesli and coffee with me so save money at least on breakfast.  


Pass Through Accounts

I now use Paypal and Venmo as pass through accounts.  I don't even have them as accounts in YNAB. When I pay with Paypal or Venmo they pull from my checking because I keep a zero balance.  When someone pays em Paypal or Vemo I manually transfer into my checking. I would set this to automatically transfer too but this option is not available.  



After watching some of Nick True's videos I made a business category for my acrobatics business.  Separating my personal and business finances is another good habit which YNAB is forcing on me. Before I made a separate business account my largest expense categories were for airfare and lodging because I fly to cities to teach.  The cost of plane tickets and hotels looked huge compared to the other expense categories in my personal budget. Nick True straightened me out. I now collect money with my business account in a separate checking account.

I tried having a different budget for my business but I eventually gave this up and started running my business through a category in my personal budget.  One reason is I didn’t like switching between budgets. It was easier to have everything in one place. I know you can have two YNAB tabs open at the same time but I didn’t like that either.  I found I could do everything I needed in one budget. I make my personal checking a budgeted account and the business accounts are tracking accounts. Maybe I will change this in the future but I like it this way for now.  


Tracking accounts

I have 22 tracking accounts.  They are convenient for tracking every stash of money which I don’t need to access on a regular basis.  I have my business checking and card there. I track my brokerage and Roth IRA in there. They are not linked.  I just update them once a month. I track how much money I have in different investment accounts like M1 Finance and Coinbase Pro.  I even have tracking accounts for gift cards. My student loans are in there as liability accounts. I sell t-shirts and I use tracking accounts to keep track of income and expenses.  When I order shirts, pay shipping, that money goes into the expenses account. The expenses account is not a real bank account, it just keeps track of expenses. I have an income which does reflect a real asset tracking bank account where I transfer money made from selling shirts. 

Overall budgeting has been the best decision I have made in a long time.  It was excruciatingly difficult at first but I slogged through it. There are dozens of videos out there but YNAB is so personalizable that the videos rarely help me with my situation.   I watched Nick True’s videos but he went very fast through his complex budget. This was intimidating at the beginning. Using YNAB is easy for me now but it was so much effort in the beginning.  I still change how I do things in YNAB every month. I have told many people about YNAB but no one has started using it. It is not easy to learn to budget. I would put its level of difficulty on par with learning algebra, or picking up a new musical instrument like a guitar.  It takes effort and time, but if you want to get ahead in life you have to make these kinds of sacrifices. My girlfriend questioned me all the way through. She was annoyed that every time I bought something I put it in my budget. I learned one trick. Whenever we go dutch I have her pay the bill and I reimburse her and this is less work I have to do.  

I am considering making my own YNAB instructional videos because I feel that many of the ones out there are inadequate.  Maybe the ones out there are okay but they were too different from my situation. In spite of my complaints I can’t thank YNAB enough for the positive changes in my life.  I am low income and probably always will be, and people like me need a budget more than people with higher incomes, because when you only make around 30k each dollar is more precious.  My financial life was like a bucket with a bunch of holes in it. YNAB helped to stop the water from pouring out.  I read a book called "I will teach you to be rich" and the book suggested that more people learn to budget.  The budgeting tool it recommended  was YNAB.  I had already been using YNAB for months so I took this to mean that I picked the best budgeting tool there is.  

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  • This is such an awesome success story! You have really found the ways that YNAB works for you through trial and error. It's interesting reading along I was like "oh I do that too" but I do it different. haha! Like I have venmo as an account that I have to do manual entry. It's not linked because the link kept bombing out and I had to do manual entry anyways. But my checking is linked. So I keep a balance in venmo and log reimbursements where they happen both what category and what account. I don't use tracked accounts like you do, but it's making me kinda wish I did. I like the idea of knowing where ALL the money is. 

    I also budget money into all my categories but I move money around when I overspend in one. It's those constant choices that make ynab freeing and not constricting. 

    I love the goals, have you messed with the different types? You might find one of the different types helps with your clothing goal issue. 

    And I think your girlfriend is just jealous 😂

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      • jacobacro
      • When you budget you tell your money where to go. When you do not budget you wonder where it went.
      • Cornflower_Blue_Cleric.5
      • 8 mths ago
      • Reported - view

      Wiecked I do have some goals, like a 6 months of income savings goal, but I dropped all the ones for monthly bills.  I have a monthly bills category which lists all my monthly mills and how much money they are and what day they go through. 

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