When I left home, nearly two years ago now, I knew (almost) nothing about managing money.
I just knew I didn't have enough of it (I had no idea what "enough" would even be!)
As a young adult becoming estranged from my family of origin and planning to put myself through journalism graduate school, I just knew that "I was my only safety net," and it was terrifying.
So I started working a ton. In my last year of undergrad, in anticipation of grad school expenses, I picked up shifts at the college mail room, dining hall, and art and theater departments - I was exhausted, but I maxed out my allowed hours every week.
Then I immediately jumped into a summer of 16-hour days, with a day job doing development work for a theater and a night job cooking at a local restaurant. I barely had time to talk to my partner all summer long (sometimes I'd be able to scrape together five minutes for a video call before job #2) and all my "groceries" were restaurant leftovers, but I was able to sock away a decent amount of cash before my program started.
I got hired by another restaurant in Grad School City a few weeks after I got there (I was handing out resumes the day after I moved in), but that was tough to manage around my classes - I'd sometimes get off shift after 2:30 in the morning and have to be at an 8:30 am lecture that same day.
Then I started picking up freelance work.
When I sent out my first pitches, I didn't think anything would come of it - I thought it was just something worth trying to say I'd tried it, and when I got rejected, that would be the end of it.
But a couple of those pitches actually got accepted! And for way more money than I would have ever thought to ask for!
Within a couple months, I was bringing in enough cash through freelancing that it made more sense to quit my restaurant job and devote my limited out-of-class hours to that.
My net worth was going up (or so I thought - I didn't have a great way of tracking it at the time) ... but I still didn't feel secure.
The tough thing about freelancing (and, to be fair, about restaurant work with variable hours too) is that, while I might be doing well this month, I have no idea what next month is going to look like.
And there were a lot of big tuition payments on the horizon. I decided, if I could save up enough cash to see me through all my basic expenses until graduation (which at that point was 17 months away), I'd be okay.
So I spent well over a year living incredibly frugally (zero fun money, $50 for groceries per month, budgeting only for "survival expenses" - anything else that came up felt like a total disaster) and never turning down any work, which was such a stressful way to live.
Then COVID hit.
And, I'm not going to lie, April sucked. BAD month. TRASH month.
The (paid) internship I had been matched with through my program got cancelled (and I had been so close to my definition of stability when that happened - literally dollars away, after spending all this time working so hard - that I genuinely curled up in a ball and cried for three hours after I got the call) and my housing fell through.
But apparently, all the freelance work I had been doing made me an attractive internship candidate - a little while later, one of the other newsrooms decided to open up another slot so they could hire me for the summer! And they paid even better than the first one! And I was able to sort out a genuinely incredible housing situation renting from the parents of one of my best friends - I've also been helping out with caregiving for their daughter through the pandemic while we're all working from home, they treat me like another member of the family, and I couldn't be happier.
So, by early summer, I had enough cash socked away to pay all my basic expenses through graduation!
That's when I started using YNAB.
I'd been (obsessively) reading the blogs and watching the videos on YouTube to get all the money education I'd never had at home, and I'd built myself a pretty decent budgeting system in a spreadsheet, but I just love the way YNAB organizes things so much.
And, now that I finally had money I could make choices with, I thought it would help me clarify my priorities - and it has!
Because my income is still so variable (even though it's much higher now than it used to be - after my internship, the newsroom decided to keep me on as a casual employee, and I'm working there almost full-time while I finish up my degree), the question of "what do these dollars need to do before I get paid again" isn't always easy to answer. And since I already have my basic expenses taken care of until June 2021, I decided to budget by proportion of my paycheck.
So when I have money coming in, I put:
- 25% towards long-term savings (that I'm mentally earmarking for eventual down-payment on a house)
- 30% towards "next year" (I've decided I really like having all my survival expenses taken care of a year in advance, even if that was a slightly absurd goal to start my budgeting journey with, so I want to keep that up - and if I sock aside more money than I strictly need, that gives me a lot of freedom to make decisions about big purchases or lifestyle upgrades like moving to a higher cost-of-living area)
- 30% towards spending (within this category, I'm much more traditional in terms of how I follow YNAB's rules, putting money aside every month for my true expenses and all that)
- 5% towards my emergency fund (I'm already over $1000, but I like the idea of continuing to sock a little bit aside with every paycheck, just in case)
- 10% towards giving
And the best part is, because I've funded all my "survival expenses" so far into the future, I feel totally free to use the money from my "spending" category on the fun and "nice to have" stuff without feeling like I'm borrowing against my stability a few months from now. I got the new glasses I've been needing, treated myself to some new clothes, bought some nice baking supplies, and I'm getting nice gifts for all my loved ones this year.
And because I have such a clear picture of my financial future, I don't feel like I have to be constantly grinding, either - I still work hard, but I've started saying no to work that's less interesting or doesn't pay enough to be worth my time, and it doesn't send me into a guilt/panic spiral over whether I'm going to have enough money to get through my education.
So, for me, this is a huge YNAB win - I'm spending money on unnecessary things! And I'm not working as much! And I feel 100% solid in my financial situation.