Age of Money, windfalls, and tracking accounts

I currently keep my “Income Replacement” savings in a high yield savings account that’s a “Tracking” account rather than “Budgeting.”

My rationale is that this is truly my “break glass in case of emergency” money, and I want to fund it and never look at it or touch it again, unless I’m in real trouble. I don’t want to be tempted to dip into it for any other purpose, period.

(I’ve made it to almost age 40 and never had an extended period of unemployment, but I want to be prepared if that happens.)

I also have Tracking accounts for my investments, and a category of “Financial Independence,” which is what I use for any transfers into my IR or investment accounts.

Any money that isn’t my salary (stuff like bonuses, tax refunds, etc.), plus a small recurring transfer, goes into the IR or investment accounts immediately.

But these huge “windfall” deposits and transfers kill my Age of Money, which is always depressing.

Is there a better way to do this?

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  • Gold Pilot said:
    Is there a better way to do this?

     1. Your Income Replacement account should be on Budget. That will solve your Age of Money problem. None of the reasons you've given are actually legitimate reasons for having the account as a tracking account. Income Replacement is a job just like any other job in your budget. Having a tracking account for something that should just be a budget category creates extra layers of management for no tangible benefit.

    2. Age of Money is irrelevant and you should ignore it. That will also solve your Age of Money problem.

     

    My recommendation is to do both of these.

    Investment accounts generally should be tracking accounts, due to the nature of their volatility. However there can be a case for bringing it on budget, if the account is large enough and you have a plan to manage it. Otherwise I would not recommend this.

    Like 5
    • WordTenor
    • I have the honor to be your obedient servant
    • WordTenor
    • 4 mths ago
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    Gold Pilot said:
    I currently keep my “Income Replacement” savings in a high yield savings account that’s a “Tracking” account rather than “Budgeting.”

     Stop that. 😛

    But seriously, I was once a "I can't possibly have my big pot of money in YNAB!" person. Over time, as I became better at YNAB, I realized that didn't make any sense. If you can keep from raiding "car repair" for burgers, then you can keep from raiding "income replacement" also. The other reason is that if you actually *do* need to use it at some point, it will look like income, which will overstate your income for that time.

    This will have the effect of keeping your AOM much steadier and larger, but as @nolesrule  points out, AOM is not a very useful metric and you shouldn't put much stock in it. Putting your account on budget is about accurate reporting and ease of budgeting; AOM is, as it always is, a side effect of good budget management. 

    Investments absolutely should be tracking, or not in YNAB at all (my personal preference). 

    Like 3
    • Melissa
    • Routinely questioning every assumption I have about my budget, my spending, and my savings habits.
    • todays_mel
    • 4 mths ago
    • 1
    • Reported - view

    "Better" is a subjective term, but I'd recommend:

    1. Bring your Income Replacement account On-Budget as recommended by YNAB documentation (all liquid savings should be OB), 
    2. Install the YNAB Tool Kit (which is a Google Chrome & Firefox browser extension) if not already using it,
    3. Turn off the Age of Money metric, using the Tool Kit, as it's a backwards looking metric and doesn't tell you how long your money will last into the future.
    4. And turn on the Days of Buffering metric within the Tool Kit. 

    While I can't say the Days of Buffering is 100% accurate, my DoB is currently at 51 days, based on all of my liquid/cash OB accounts. I ignore AoM completely, but if I turn it back on my AoM is 101... That number means diddly to me. :)  However, every time my DoB increases, I'm extremely pleased since that means I'm continuing to bulk up my long term savings goals!

    Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 4 mths ago
      • Reported - view

      Melissa DOB does what a lot of people think AOM is doing. That said, DOB can't accurately prorate large infrequent expenses, not to mention due to the calculation, those expenses shift from the numerator to the denominator which can result in large swings.

      On reddit I recently demonstrated that a $20k car purchase can have a $110 variance in DOB's average daily spend calculation depending on timing of the purchase and the lookback period setting used in the toolkit. The average daily spend is the denominator in the DOB calculation.

      Like
    • Superbone
    • YNAB convert since 2008
    • Superbone
    • 4 mths ago
    • 4
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    WordTenor said:
    AOM is, as it always is, a side effect of good budget management.

     I like that. It's not a rule, it's a side effect.

    Like 4
  • But why would I treat this account differently than my retirement accounts? To me, it’s a last line of defense against raiding those, and should be kept similarly outside of money that has any kind of a “job”. Its job is to not get spent right now nor in the foreseeable future.

    Similarly, why should redirecting income directly toward post-tax retirement accounts have any impact on my Age of Money, when pre-tax contributions don’t? In both cases, it’s money I never need to handle at all and I’d rather not think about, period, because I’ve always been more successful at saving when I don’t have to make deliberate decisions to save (and recommit to those decisions along the way). 

    I absolutely understand the prioritization that YNAB forces with one’s money that needs to be spent, but for those of us who have more than sufficient income to cover a reasonable standard of living, it seems silly to make recurring decisions about money that’s above and beyond that. I want to make a one time decision and not be invited to reconsider it. Because I *will* reconsider it at every opportunity.

    I know this because at least 3 times per year, I spend all of my categories down to zero, on things I don’t need, and then have to remind myself what’s important to me and use my next bonus or windfall to catch all those categories up. I don’t need extra temptation in that regard!

    It’s much like how I keep a limited amount of junk food in my house, and force myself to go to the store for more, if I truly want to throw caution to the wind. I could keep a pantry full of junk food at home and lecture myself about making good choices and prioritizing my calories, but why put myself through that in the first place? 
     

    I currently save more than half of my income, and do so happily for the majority of the time, and I have only been able to do that by creating a sense of scarcity and not having all of that income staring me in the face, asking what job I’d like to give it. 😂

    Like
  • And yes I suppose I could just throw AOM out the window but having a “Financial Independence” category where these transfers go seems to be screwing up my DOB number too. I can’t seem to figure out a way to get either metric to work (and I really like the concept!)... without setting up my accounts in a way that behavioral science (and my own behavior history) suggests will hinder my progress toward financial independence. 😑

    I would be curious to see if there are other “automatic/autopilot investor” FIRE types who use YNAB and what your setup looks like...

    Like
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 4 mths ago
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      Gold Pilot Get rid of all of them and just look at your Net Worth. That’s what you’re really talking about anyway.

      Like 2
      • Gold Pilot
      • Gold_Pilot.4
      • 4 mths ago
      • Reported - view

      Superbone I suppose I look at Net Worth as my indicator for how I’m doing in the long term, and I’d like a metric that indicates how I’m doing from month to month. I could average out my monthly expenses minus the FI category, I guess?
       

      I tend to do well on the whole but struggle sometimes with overspending (by my arbitrary sense of what I’d like to spend vs. save) and it gets a little tricky to see the big picture there, especially because my non-salary income varies a lot. If I start using it to play catch-up on my categories, I lose track of how I’m doing. (I literally have a New Years Resolution to “Stop raiding YNAB categories and playing catch-up with extra income!”)

      That’s why I like the DOB concept in particular, it should theoretically give me a sense of whether I’m keeping my spending money at a consistent-ish level, if I could exclude the FI category.

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 4 mths ago
      • Reported - view

      Gold Pilot Well, as you know, AOM and DOB are only affected by what is in your budget and anything leaving your budget is going to affect them negatively. Whereas NW tells you your overall financial health. So, if you keep your savings off budget, neither AOM or DOB are going to be of much help.

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    • Superbone
    • YNAB convert since 2008
    • Superbone
    • 4 mths ago
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    Gold Pilot said:
    I would be curious to see if there are other “automatic/autopilot investor” FIRE types who use YNAB and what your setup looks like...

    Raises hand. I am exactly this and my setup looks exactly like what Nolesrule describes including taxable investments in my budget. However, the difference between you and me apparently is that you are unable to stop yourself from raiding your EF and taxable investment accounts if they’re in your budget.

    Like 1
  • Gold Pilot said:
    I don’t want to be tempted to dip into it for any other purpose, period

    You're fooling yourself if you think having it off budget makes it any safer. Let's say you overspend something on budget. Further, say everything else on budget needs the money it has in those categories. Money has to come from somewhere, so guess what takes the hit? Bingo, the IR savings.

    Alternatively, you identify something in the budget that can be cut back, so then there's no problem. Hopefully it's obvious that having the IR money on budget doesn't change either of these two outcomes.

    The best way not to get into this situation is to not overspend. Check category balances BEFORE spending, and reallocate if needed at that time. If you cannot find something else to short, then say No to that purchase. 

    Like 4
    • WordTenor
    • I have the honor to be your obedient servant
    • WordTenor
    • 4 mths ago
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    Gold Pilot said:
    But why would I treat this account differently than my retirement accounts?

     Because its liquidity is different, so it gets treated differently. You can move money in and out of it in a different way than you can with a retirement account. 

    Like 4
  • Gold Pilot said:
    my non-salary income varies a lot

    You might try normalizing it so you can treat it like any other income. Stash anything over the average in a category, and supplement from this category in the lean months (to the average level). The rest of the budget targets an amount equal to your normal income plus the average of the variable. Once you get going, most of your budget doesn't have to change because of sporadic income arrival times.

    I don't see the point of treating this money as special. By your comments, your spending outpaces your normal income. Why not make a plan for all your money?

    Like 3
  • Gold Pilot said:
    I know this because at least 3 times per year, I spend all of my categories down to zero, on things I don’t need, and then have to remind myself what’s important to me and use my next bonus or windfall to catch all those categories up. I don’t need extra temptation in that regard!

     Do you really mean you spend down to zero all the money saved for car replacement, annual insurance premiums (if any), annual subscriptions, utility bills, vacations, appliances replacement, furniture replacement, electronics replacement, medical needs etc. in a month or so? 
    If so it could mean several things:
     - first, it means you probably don't check your categories before you spend to guide your spending.
     - you don't have a lot of those categories and prefer to go with a "saving" category or a "big things" category. In that case, you need more granularity in your budget. It's harder to rob a category with a specific purpose than a generic category.
     - you "starve" yourself in your budget. Meaning you don't budget enough for your wants and just crack every now and then. Just recognise that and stop lying to yourself. You've tried starving your needs and you can't make it happen. Just look what your real average expenses are for those and compare with your nominal budgeting number. Adjust your nominal budgeting number to something closer to reality. 

    You talked of FIRE. I know the movement is based on reducing what ones need to spend. So increasing your budget on needs might not sound like a good idea to you but that's effectively what you are doing currently without accepting it. Accept it, then see if you can reduce 1 or 2 needs. Once you achieve that, look again.

    Like 8
  • Chiming in to say that all of these suggestions are spot-on, Gold Pilot

    I used to manage my IR and emergency funds off budget pre-YNAB, and it led me to feeling like I wasn't getting ahead. I was in the trap of loading them up and being short in my spending categories. It felt good to say that I had $X stashed away, but I struggled to buy groceries and pay bills. 

    It pays (literally) to smooth out your spending.  Good luck!

    Like 2
  • Ceeses said:
    Do you really mean you spend down to zero all the money saved for car replacement, annual insurance premiums (if any), annual subscriptions, utility bills, vacations, appliances replacement, furniture replacement, electronics replacement, medical needs etc. in a month or so? 
    If so it could mean several things:  - first, it means you probably don't check your categories before you spend to guide your spending.  - you don't have a lot of those categories and prefer to go with a "saving" category or a "big things" category. In that case, you need more granularity in your budget. It's harder to rob a category with a specific purpose than a generic category.  - you "starve" yourself in your budget. Meaning you don't budget enough for your wants and just crack every now and then. Just recognise that and stop lying to yourself. You've tried starving your needs and you can't make it happen. Just look what your real average expenses are for those and compare with your nominal budgeting number. Adjust your nominal budgeting number to something closer to reality. 

    Yes, with the caveat that I don’t save more than a few months in advance for most of those things, because my household spending levels and income are high enough to easily accommodate  them. So if I want to go on vacation, I typically reduce how much I eat out or spend on household fun stuff or whatnot, when the goal is near enough that I will be motivated to stick with it. Things like annual subscriptions don’t raise my monthly “household” category spending because I just spend a little less there or everywhere to make it work. I seem to have roughly similar annual needs and even my monthly averages aren’t super variable, because that kind of stuff just levels out fairly well on its own. 

    Big ticket stuff like a car replacement or expensive international trip, I don’t save for... I just plan to make a rare exception to my “save it for FIRE” policy and earmark a bonus or stock grant for that.

    I don’t really *have* lean months, because I live off my base salary, which is more than sufficient to cover my needs and plenty of wants. Generally I can roll with the punches and recategorize and prioritize and say “not now” or “no” just fine. But much like a few times a year, I randomly struggle not to eat a crazy amount of junk food, even though most of the time I’m perfectly happy with my sensible eating style that includes plenty of treats. I further support that by not keeping lots and lots of treats around staring me in the face, “just in case I ever run out of treats”! I’m not “lying to myself” about the existence of massive piles of junk food at the store. 😂 I’m simply not making it readily available for consumption in that quantity. It’s easier for me to make some good choices one time than to have to repeat them every day. This strategy has been very successful for me in both weight maintenance and savings, where other approaches have not.

    I feel like I’ve *tried* all the other things you mention (more granularity, less, budgeting to spend more, averaging out my annual bigger stuff and saving all year for it) over the past 5 years with YNAB and I consistently fail at applying the self discipline to stick with it. I save less money on average and throw caution to the wind at a similar or sometimes higher interval.

    I feel embarrassed discussing this because I *know* I must sound like “I have toooo much money to do what you’re saying” - what an undisciplined spoiled brat, and there are people reading this who are struggling and would certainly do a better job of managing my “problem”. I lived with kids below the poverty level for my early 20s, and I genuinely had an easier time managing my money then, when the stakes for screwing up were higher. And 25 year old me would smack Present Day Me upside the head for feeling this way! 🙄

    I don’t mean to argue with everyone’s sensible advice. I’m sure it works well for many personalities and in many scenarios. It doesn’t work well for mine.
     

    It sounds like the only remaining answer is that I need to ignore the AOM and DOB metrics entirely, because YNAB isn’t designed to work exactly how I’d prefer it did. That’s fine. I can live with that.

    Also that maybe I should post a picture of 25 Year Old Me with an annoyed “Get it together, Money-Bags” face, somewhere I’ll see it in the middle of a spending decision, and see if that helps me reduce how many times per year I euphoria-raid all my categories to buy crap I don’t need instead of waiting a month or two and saving up for it.

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

      Gold Pilot No one can make managing your money a priority for you other than you. How do you know what your FIRE target is if you don’t know what your spending level is? 

      You can use YNAB to accelerate your goals, or you can use it to just track some money. But it’s a really expensive money tracker. Sounds like you have money to burn though, so... 

      If you’d like help optimizing your use of YNAB we’re happy to help. If you want to do things your own way, no one here is going to stop you other than to say “Yeah, that’s sub-optimal.” 

      Like 6
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 4 mths ago
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      Gold Pilot said:
      Yes, with the caveat that I don’t save more than a few months in advance for most of those things, because my household spending levels and income are high enough to easily accommodate  them. So if I want to go on vacation, I typically reduce how much I eat out or spend on household fun stuff or whatnot, when the goal is near enough that I will be motivated to stick with it.

       I think you should switch to the technique of budgeting the same amount to every category every month and relying on your category balances. If you are constantly changing how much you budget on a month to month basis to cashflow large spending, you will end up spending more than you want to, as you've seen.

      You need to employe Rule 2 and save for your True Expenses rather than trying to cash flow them. You'll find it's a better method for getting where you need to be, and gives you a true picture of how your monthly income translates to annual spending.

      Like 5
      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 4 mths ago
      • 4
      • Reported - view

      Also as dakinemaui  pointed out, you need to Rule 2 the extra income. 

      The bonus, as I point out is that you establish your FIRE spending target. That is a crucial component of FIREing. 

      Like 4
      • Gold Pilot
      • Gold_Pilot.4
      • 4 mths ago
      • Reported - view

      WordTenor That’s fair. I will say that I know what my spending levels are because I track my annual inflows and outflows to get a true picture.

      I do need to think more about how I’ll manage long term big expenses after I don’t have a steady stream of extra income available (post retirement) because I’ll have the problem of “well, it just comes out of this big pot of money” which clearly is an issue for me.

      So I agree that I do want and need to get the occasional (3x/yr) “binge spending” under better control, but I’ve also not been *at all* successful at the YNAB Rule 2 when I have tried it in real life. My “true expenses” just creep ever-higher, as I save for them and then continually raid categories on top of that, and my savings rate plummets. Oh and then I feel shame and disgust with myself and want to go spend even more money and eat a bunch of junk food to “feel better,” because that totally makes sense. 😏
       

      My current system minimizes that binge-spend euphoria behavior and keeps me feeling satisfied more than any other I’ve tried (approximately 362 days a year), so I’m also hesitant to go back and keep trying to succeed at things that I’ve failed spectacularly and repeatedly at.  ☹️
       

      Thanks for the therapy couch? Ha.

      Like
  • Gold Pilot said:
    My “true expenses” just creep ever-higher, as I save for them and then continually raid categories on top of that, and my savings rate plummets.

    Sounds like you really don't understand your spending, and it's actually higher than you want to acknowledge.

    Why are you raiding categories?

    No one is thinking, "oh, poor rich you." There are lots of people in very good financial shape here. Good financial principles don't change when working with a few more digits. However, it is easier to be sloppy and undermine best rate of progress.

    Like 4
  • Gold Pilot said:
    I know what my spending levels are because I track my annual inflows and outflows to get a true picture

    Then why do you continually have to raid categories? 

    Like 2
      • Gold Pilot
      • Gold_Pilot.4
      • 4 mths ago
      • Reported - view

      dakinemaui You are thinking about this too rationally. It is not rational behavior when I do it. It is compulsive, euphoric behavior. 

      The scenario is: I see lots of money sitting there, I am having a superbly crappy day in the middle of an awful week during what’s been a tough month, I’ve used up all my willpower four days ago, I know I don’t need to spend that money for the intended purpose for another 6 months, I know that even if I spend it now, there will be plenty of money between now and then to pay for that and re-stock the category... and I just say “eff it” and go buy a bunch of crap that I don’t need and sometimes don’t really want that much.

      I buy things that I don’t value, and I don’t miss *not* buying them. 

      This is something that doesn’t happen often, and when I limit how much money I have access to, even just psychological barriers, the damage is reduced. I can pick myself up after blowing my YNAB categories up, look ruefully at my decisions and numbers and say “remember? This is why we don’t live this way,” and not do it again for a good long time.

      I am less tempted to engage in that behavior when the available dollar amounts are small, because the kind of stuff I’d blow it on are things I could easily work into my normal spending, since I don’t deprive myself in the first place. When the available dollar amounts are larger, the stuff I blow it on also grows in size, and the temptation is bigger because it’s stuff I don’t normally value enough to save up for.

      Every time I do this, I regret *almost every single purchase* because it’s not happening as a result of depriving myself. I like my standard of living. 

      It’s about the gleeful dopamine hit that comes from using money as a way to temporarily feel better about tough stuff or painful emotions. And yes, I’ve spent a lot of time in therapy learning better coping mechanisms. But there’s also a component of structuring your environment to limit known triggers and limit how far and long the damage from a slip-up will extend. It’s not an either-or thing. It’s a both-and.


      I don’t expect other people to understand, if they don’t struggle with compulsive, self-destructive behavior. The strategies it requires to manage those kinds of impulses aren’t always rational.

      Like
  • Gold Pilot said:
    Every time I do this, I regret *almost every single purchase*

    My only advice is to check category balances BEFORE the purchase and reallocate from lower priority categories in advance if not enough funds are Available. Make this a self-imposed rule. 

    The mere act of reallocation will cause a similar feeling of regret if you're really taking from a higher priority category, and crucially, it's not too late to change your mind and skip the purchase.

    Also, give your categories very specific names so you have a really good idea what you're giving up or delaying when you reallocate. This is perhaps a poor example for a FIRE-centric budget, but instead of saving for a dive trip in a generic Vacation category, name it Mexico Dive Trip 2021. Hopefully you get the idea.

    Like 4
      • PhysicsGal
      • Nerdy female homo sapien
      • physicsgal
      • 4 mths ago
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      dakinemaui This is the most important thing to do to be successful with YNAB, IMO.  I think it's easier for me to get used to that because I started with using actual envelope budgeting for awhile  (a la Dave Ramsey) for my problem categories (groceries, Fun $, Eating out) so I got into the habit, because otherwise you get really embarrassed when you try to pay for something and don't have the cash in your envelope.  If you have problems with certain categories, I highly recommend trying cash envelopes for those problem categories for a few months to get into the habit, then you can switch back to them being on budget once you develop the habit of checking first.

      I also wanted to keep my Emergency fund separate for awhile for the psychological security, although not off budget, just in a separate account, but eventually I stopped doing that.  It was a matter of getting enough time and commitment to YNAB that I knew I'd be tracking my budget and only buying when the category balance has $ in it (or has money that I just moved from another non E-fund category to it).  If you're not yet committed to your budget enough to not raid your E-fund if it's on budget, then maybe you should keep it separate and deal with having a worse AOM or AOB than if it were on budget, recognizing that it's not YNAB that is the problem but your use of YNAB is not how it was intended to be used, thus the calculation is less useful for you.

      Not YOU dakinemaui , you the OP, I mean.

      Like 2
    • Superbone
    • YNAB convert since 2008
    • Superbone
    • 4 mths ago
    • 4
    • Reported - view
    Gold Pilot said:
    It sounds like the only remaining answer is that I need to ignore the AOM and DOB metrics entirely, because YNAB isn’t designed to work exactly how I’d prefer it did. That’s fine. I can live with that.

    I personally focus on Net Worth. This is your overall financial health picture. I like to see a steady increase over the years. I got knocked back about a year after last month's update so that was no fun. Should see a good chunk of that back when I update tomorrow though.

    I get it that you're struggling with self-sabotage. I used to have a problem pre-YNAB so I can relate to the dopamine rush from buying junk. I don't deprive myself too much but I have cut out worthless spending. After my last move, I got tired of hauling around and storing massive amounts of junk so I got rid of a ton of stuff and have been focusing on the Marie Kondo philosophy of only having things that "spark joy" around me.

    I can also relate to the food issues. I too struggle with cutting out junk foods.

    Anyhoo, I hope something we've written here helps a little. Best of luck!

    Like 4
      • Gold Pilot
      • Gold_Pilot.4
      • 4 mths ago
      • 2
      • Reported - view

      Superbone Thanks. I have made major improvements in both areas (compulsive eating and shopping) and it’s much less of a struggle than it once was. But I’m also still prone to regressing and need to be very careful about my environment. I also have come to accept that “should” and “should not” are not helpful thoughts for me, because they trigger feelings of shame, frustration, or rebellion... none of which leads me down a healthy path. 

      “What do you want, truly, right now?” and “What do you need to do, to keep yourself on track?” tend to be more helpful in managing my demons. 

      There have been a lot of good ideas in this thread. Humans are complex creatures, and while we can all learn from each other, we also have to recognize that our experiences will differ.
       

      (For example, the Dave Ramsey crowd sees a lot of success with kicking credit cards to the curb; I found a lot of their tools and mindsets helpful in knocking out my other debts, but their anti-credit-card dogmatism turned me off. Because their system works so well for many, it’s hard for them to accept that some people can adopt the debt elimination aspects and also fare just fine using credit cards for points and not be tempted to go into credit card debt. But then there are people who do delude themselves about it, and need to be told so. I would just encourage people to consider that you rarely know someone’s life story, and some parts of your ideal system or solution might not be part of theirs.)

      Like 2
      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 4 mths ago
      • 3
      • Reported - view

      Gold Pilot 

      Gold Pilot said:
      “What do you want, truly, right now?” and “What do you need to do, to keep yourself on track?” tend to be more helpful in managing my demons. 

       This is why everyone here is making the suggestions they are. YNAB can help you feel these feelings, and it can also help you feel scarcity. But feeling those things is reliant on using the method. When you find the money first, you will end up asking yourself both those questions. Over time, the impulse to not find the money first will slowly train itself. 

      Good luck! Sincerely. As I said upthread, if you want to keep your savings off-budget, none of us can stop you. We can just point out that it's suboptimal, and especially doesn't help with the goal of learning to rein in the spending explosion/rebellion. 

      Like 3
    • Alemap
    • Everything should be made as simple as possible, but not simpler -Albert Einstein
    • alemap
    • 4 mths ago
    • 1
    • Reported - view

    What I hear you saying is that this isn't a YNAB or budgeting problem, but a compulsive spending problem. Speaking from experience, I'd like to recommend another acronym: DBT (dialectical behavior therapy). Made a tremendous difference for me. Good luck!

    Like 1
      • Gold Pilot
      • Gold_Pilot.4
      • 4 mths ago
      • 4
      • Reported - view

      Alemap Thanks, I have used DBT techniques before and did find them helpful. My boyfriend is an interesting mix of empathetic and logical, and naturally seems to ask me questions when I'm upset that are reminiscent of DBT and CBT techniques. We were talking about this forum discussion and he asked, "What was the last thing you bought that you felt was an expensive, compulsive purchase?" I actually couldn't think of anything in the past year, and on the contrary, all of the purchases that either of us could remember had been well considered and useful items. He also asked, "How much money did you save, including 401k and stuff like that, last month?" and when I added it all up, it was more than twice what I'd spent on life expenses and fun.

      I also spent some time thinking back to my very early YNAB days, when I was anxious about not paying attention to my bank balances, and unsure I'd be able to avoid the temptation to spend everything down to my last few hundred dollars. (I've come a long way.) Now, I don't give my Checking or Savings account balances so much as a glance, let alone use them to make decisions.

      I watched this YNAB video

       

      and it made me realize that I was struggling with raiding categories because I hadn't identified and separated out the "in between" expenses that are more important and yet also feel less urgent than the "nice to haves" categories. (The "untouchables" have always been easy for me to leave alone, but lumping "in betweens" and "nice to haves" together under "True Expenses" made the mental line blurry.)

      I reworked my budget and accounts, moved the Income Replacement savings account on-budget, and shifted that category and the "in betweens" waaaaaaaay down the list so they'd be less in my face when I'm rolling with the punches. I renamed that grouping "Save or scramble to pay for it" as a reminder of why it's best not to raid them. Then I renamed some of my other groupings much like Hannah's, to make me remember what my priorities are and why ("The finer things" for dining out and events, vs. "Gotta have it" for groceries and car gas, vs. "Gotta pay it" for all my recurring bills)

      I'll re-evaluate once per quarter and make sure I'm still on track. Thanks everyone, for your ideas and opinions.

      Like 4
  • Gold Pilot said:
    I reworked my budget and accounts, moved the Income Replacement savings account on-budget, and shifted that category and the "in betweens" waaaaaaaay down the list so they'd be less in my face when I'm rolling with the punches. I renamed that grouping "Save or scramble to pay for it" as a reminder of why it's best not to raid them. Then I renamed some of my other groupings much like Hannah's, to make me remember what my priorities are and why ("The finer things" for dining out and events, vs. "Gotta have it" for groceries and car gas, vs. "Gotta pay it" for all my recurring bills)

     Almost two months later, this is working really well. Speaking my fears "out loud" on the YNAB forum seems to have helped a lot (thanks Alemap for the reminder about dialectical behavioral approaches and to everyone else for asking tough questions to make me work through all of this in my head).

    I have consistently implemented the "Find the money before you spend it" rule that dakinemaui emphasized, and that has been a big help, as well.

    Drumroll...

    The results so far:

    • My average account balance (checking and savings) has nearly tripled.
    • Sustained, steady progress on investing for early retirement.
    • My spending actually dropped a bit, and I've spent more on things I care about and less on things that I regret. The realities of the pandemic have also help curb the urge to spend compulsively.
    • I renewed my commitment to basic self-care strategies when I feel stressed or anxious: calling a friend, cuddling with my kids or boyfriend, going for a walk, cooking a new healthy recipe, looking at my net worth growth over the past 3 years, journaling, doing a YouTube yoga or meditation, etc.
    Like 6
      • dakinemaui
      • dakinemaui
      • 2 mths ago
      • Reported - view

      Gold Pilot Your progress is inspiring, and I really appreciate you circling back and letting us know what made a difference!

      Like
      • Alemap
      • Everything should be made as simple as possible, but not simpler -Albert Einstein
      • alemap
      • 2 mths ago
      • 1
      • Reported - view

      Gold Pilot , well done! Inspiring to know that progress can sneak up on you, even when you're (I'm) still stuck in old thinking patterns. I listened to the latest YNAB podcast yesterday where Jesse talked about how being on the right track can be more important than where you are at the moment and time magnifies progress. If you haven't heard it, you may want to give it a listen. Thank you for the call out and the update!

      Like 1
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