Calling all veteran YNABers
I love reading your replies in all threads - a lot of lightbulb moments. So I'm hoping you'll share some of your wisdom and tales of what brought you here: why you started YNAB, big moments you've had since using it, and a tip or two (or three) regarding your favourite features or "hacks" that make it work for you. You're an inspiring bunch!
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I'm not a long-time veteran (1.75 years or so for me), but the main reason I tried YNAB was that I got married. I was terrified that I would think a certain set of money was going to cover rent/groceries, and my husband would think the same money was free to spend on something fun at the hardware store (or vice/versa). YNAB is, at it's core for us, a communication tool.
Because it was a separate interface, we were both forced to translate our very different mathematical thinking to the same format/language. This was a good, non-personal way to figure out what our financial responsibilities, situation, goals, and plan would even be (all our frustration at figuring out the common language was directed towards YNAB, and could not be taken personally by either of us. Whereas, our separate spreadsheets not only did not make sense to the other person, it seemed almost a personal affront to question the other's set up in Excel. YNAB was much better at being a neutral ground. We have had no disagreements or quarrels about money so far. I'm glad of that.
We actually simultaneously tried YNAB and Quicken. Quicken fell by the wayside before month 3.
So that's how we got to YNAB, other than the fact that my friend persistently asked if I wanted to try it for about 3 years... Thanks, Friend, if you're reading!
As for tips and tricks, follow the first three rules, start out by budgeting your savings if you want to retain it, read this blog post <https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/> and try to live on last month's income. I attempted to compile everything I knew about that here <https://support.youneedabudget.com/t/m1hqyb3/trying-out-the-ynab-buffer>
I also like the way I handle gift cards, but that forum post is nearly a year old, so I'm not going to go find it now.
The veterans I have learned the most from are dakinemaui (everything, really, but has the best explanations of reimbursements and overdraft accounts that I've seen), nolesrule (helped me realize I should not pay my CC to $0 and why, among other comments that spurred thought), jenmas and HappyDance both have given very clear examples of using YNAB to it's full potential, and WordTenor is good at explaining how YNAB works clearly and concisely while not shying away from it's foundational principals. Patzer wrote the first important thing that I read (very high quality), but I haven't seen him on lately. Superbone , JoeDid , and many others also demonstrate facility with both the long-time method and the current software.
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Move Light Sound Life I’m sorry to report that Patzer passed away last year. He is definitely missed.
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Move Light Sound Life anyone past 8 days of use is fine in my book 😁 I've used YNAB off and on for two years, but I finally committed a week ago.
Very interesting to hear that it was a neutral ground for budgeting as a couple.
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jenmas how sad. I'm sorry to hear that.
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jenmas Thanks for reporting. May he rest in peace. It makes me wonder how an internet community finds out about that.
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Move Light Sound Life if you read his posts, you know how important running was to him. Another forum member read an article about his passing in a running magazine and was able to make the connection.
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Move Light Sound Life I started using YNAB 4 in the summer of 2014. I was living overseas at the time, but knew I would be moving back to the US sometime in the spring. I saw YNAB mentioned once in the comments section of a non-finance blog that I read avidly. I had idly checked it out at some point before July 2014, but never did anything about it. However, that Saturday I was sitting in my apartment and was super bored. I believe that there were security reasons I couldn't leave the small town I lived in to go to the closest city. And for some reason I didn't have access to a car that weekend and anywhere I walked in town would have involved walking up hill both ways and I just didn't want to. So I downloaded the trial on a whim. I've never carried consumer/revolving debt. At the time my only debt was a mortgage back in the US that was offset by the fact that I had tenants living there that covered most of the mortgage and my housing overseas was free.
The 4 rules made so much sense to me. Within a week I had consolidated all my separate savings accounts and let the categories illustrate the job of my funds, not the location. I wasn't on the credit card float because there were very few places where I could use my credit card where I lived, but looking back, I had always been in the US because I was constantly sending money to a savings account never to be touched - not for any particular purpose, but just because. It took me 6 weeks to get to Rule 4 - Live on Last Month's income and that made budgeting such an administrative breeze.
I don't use YNAB to help me cut overall spending. I'm not striving to be frugal. But I do use it to be more intentional about my spending. I reduced the amounts budgeted to groceries and eating out because I wanted to reduce food waste. But there are some categories that I fund every month at a pretty generous amount (relatively speaking) so that the 3-4 times per year I do need to spend from them because it will objectively make my life better, I can just do it with no drama.
I have well and truly embraced the idea that funds are fungible. I have a single gift card category that I keep on budget, and if you give me a $20 Starbucks gift card, I will promptly add it to the account and allocate that new TBB to Clothing (this is not a good idea for people running on a tight budget). I have systematically increased the amount that I send to taxable investments and to giving.
I don't use direct import. I don't see the point in my personal use case. I need to know where my category balances are right now so I do manual entry because I don't have time to wait until the transaction clears. I check the balances online periodically to see if I forgot anything (at most once per quarter across all of my credit card accounts and my wallet) so there is no value to me in fighting with the connectivity issues.
If the category does not have the necessary funds, I do not make the expenditure. I move the money first. This is absolutely key. Therefore I don't have to deal with red in my budget. (I will admit to one exception - buying clothes. If I want 1 pair of jeans and I have enough money for that, I'll buy 4 or 5 pairs to try on, knowing I'll be returning the ones that I don't like)
Also, I don't pay categories back. I mean, I kinda do with my normal budget allocations but if I decide that it is important/necessary to take $100 of my vacation category to add to my electronics category, I don't short anything the next month to put that $100 back. I made a decision based on the value and priority that I placed on the categories relative to each other and I move on. It would never ever occur to me to take money out of my Income Replacement category for anything other than perhaps a medical emergency so I this idea of tracking "internal debts" to myself is irrelevant to me.
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I discovered YNAB and bought my first copy, which was YNAB Pro at the time, in July of 2008. Up until that point, I had never figured out how to budget properly. I had used Quicken for years and years but only to track my money. This time period was just at the end of my crumbling marriage. (So Move Light Sound Life and I are on opposite ends of the spectrum there! 🤣 ) Money was just one of many issues in my marriage. When the dust settled, I had no liquid savings to speak of, I had credit card debt, I had a car loan, and I had 2 mortgages on a house that was $100k underwater (note the year).
Enter YNAB. That turned everything around over time. I’ve gone from YNAB Pro to YNAB 3 to YNAB 4 and finally to what we call nYNAB today. In all the years since, I’ve paid off all debt other than a mortgage on a house I bought a few years ago. I’ve put two sons through college debt free. I paid cash for my current car. I have a full six month emergency fund plus lots more savings on top of that. YNAB has been the tool that unlocked financial freedom for myself.
Tips? Let’s see. My biggest modification is foregoing the new YNAB credit card system in favor of making my credit cards checking accounts. This is only recommended for PIF (Paid In Full) credit card users. It mimics previous YNAB’s CC handling and cuts out the middle man of the CC payment category. I used the new system for about a year but then switched to checking accounts and haven’t looked back. The new system is fine when it works but there are a handful of situations that can cause the payment category to get out of sync. It is unnecessary for a PIF user like myself.
Also, Rule 4 changed with nYNAB. I much preferred the previous Rule 4, Live on Last Month’s Income. This functionality used to be built into the software. Now you have to do a workaround using an Income for Next Month (INM) category. All income this month goes into the category. Once I receive my paychecks for the month, I release these funds back to To Be Budgeted and fund all of next month using the Underfunded Quick Budget option. I then make a pass through and make category adjustments as needed.
One last tip is I use the Running Balance to make sure I have enough in my checking account at all times to cover all of my bills, all of which I have automated. I use scheduled transactions liberally. I get paid fortnightly so I like to see my next two paychecks in my running balance at all times. To do this, I have two scheduled paycheck transactions two weeks apart each with a repetition schedule of every 4 weeks. I leave myself a smallish buffer in checking and then everything else goes into online high yield savings accounts.
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Superbone nice to know it works for various life changes! Lots of wins you've achieved too.
I read recently how you use an Income For Next Month category and it makes so much sense. I've only used nYNAB, but filling in future months caused a lot of headaches.
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Superbone I used YNAB back in 2011, I believe it was YNAB 3, and I also think "Live on Last Month's Income" is less confusing than "Age Your Money". My thinking is they wanted to have rule 4 be something you can do from the first day you start YNAB, rather than a long term goal that some people feel bad about themselves for not reaching yet.
I wish I had stuck with YNAB the whole time like you did and actually build my buffer and emergency fund! At least now I (hopefully) stay motivated and stick to it, even after I pay off my debt and build up my emergency fund. It's certainly become a habit and it will get easier once I pay off my debt and finish my E-fund because I'll have more money for my other, more fun priorities. I invested a ton in retirement, but I didn't have liquid savings to keep me out of debt when an emergency hit, so I'm determined to build an emergency fund that will protect me from going into debt again.
I think there were also issues syncing with Dropbox and sharing the budget with my husband (at the time), which probably didn't help me stick with it, but I'm probably just making excuses for myself. :P
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dangerosity I'm sure if you ask dakinemaui nicely 😄, he'll provide you with a link to his INM strategy which I've adopted. It's the best way I've found to handle the classic Rule 4.
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Superbone I made sure dangerosity was following another recent thread where I posted it. 😉
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Superbone COVID-19 has obviously given me time on my hands to catch up on lots of forum discussions. 🙂 I am very interested in how you have set up your credit cards. I also PIF and have just ignored the credit card payment category up til now. In fact, I was modifying things a few weeks ago and lost the payment category for a card entirely--no idea where it went or how to get it back (not that I want to). I came up through both YNAB3 and 4, but I have to confess I am hard-pressed to remember just how credit cards worked then. But I know I would like to revert. Can you share the steps you took to convert them to checking accounts?
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Friendly_gal I found an old thread about it here:
https://support.youneedabudget.com/t/63g8kg/convert-credit-card-account-into-checking-account
You basically create a new checking account and select all transactions in the old credit card account and move them to the new checking account. Once you have it working, there is no credit card payment middle man category any more. The new checking account will show a negative balance which should match your credit card balance. When it comes time to pay your statement balance, you just transfer the funds just like normal.
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Superbone I wonder if this is worth trying for me? I also do PIF credit cards the YNAB way, ie I have the money to pay my bill at all times now. The main issue with credit cards is leaving overspending uncovered right? I always cover my overspending but I’m bound to mess that up someday by chance. I don’t want my credit card payments category to come up empty when I do.
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PhysicsGal When your CCs are set up as checking accounts, the overspending gets taken out of next month's TBB just like cash-based spending. You implicitly have the money to pay off the credit card as long as you don't have a negative TBB, because as far as YNAB is concerned, the money is already gone, even if it's overspent.
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PhysicsGal I think the easier and safer way to switch is a balance transfer. Create the new checking account and simply make a transfer/payment for the entire CC account balance. (The new account will be negative.) Ensure the old Payment category is $0 and close the old account.
If you ever need to finance something or ride the CC float, a balance transfer back to the old credit account representation is a 10 second endeavor.
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dakinemaui Thanks!
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Superbone Done! I'm so happy! Really appreciate the help!
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dakinemaui I am not sure if i read the correct thread. Is it the same discussion where you mentioned to keep funds in the 'income for next month" category and fully assign them for next month? If not, could you detail it ? (Referring to the post about INM strategy)
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Sky Blue Harp yes, that's correct. The INM is a temporary holding category. When the entire month's funds are received, you empty the category into TBB and budget next months area.
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YNAB definitely turned things around for us. Lots of consumer debt, which seemed to grow despite thinking we made "enough". We have never Fresh Started, and I sometimes pull up the Net Worth graph for inspiration.
Another veteran who has passed is DeguelloTex. His gruff, terse, tough-love style would never fly on this board, but many of us are better off for his guidance.
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I used YNAB in 2011 for awhile to get out of debt (Dave Ramsey baby steps, well, BS1 and BS2), but then I didn't build an emergency fund or buffer, I quit budgeting, and I ended up back in debt again when an emergency happened last year.
This time around I'm using a much more sophisticated software that is certainly much more seamless than what I was using in 2011, so it's become a lot less work to keep up with my budget. I started up again last summer after taking on a massive $25k HEL for my divorce settlement.
The main tips I have are pretty standard:
-Ignore your growing account balances, only look at your category balances BEFORE you make any spending decision
-If you need to WAM (whack a mole, rule 3), do it BEFORE you spend the money.
-Use manual entry combined with automatic transaction downloads (if in USA) so you don't miss a transaction.
-Enter your transactions right away, either at the check out, or as soon as you leave the store, or get into your car, whatever, but this habit is very important to your success IMO
-Be patient and give it at least 3 months to get used to your budget in YNAB and following a budget in general
-Don't be afraid to get help from YNAB tech support, they are great and have been very helpful when I've gotten help through the chat.
-Don't be afraid to try using cash envelopes for your problem categories for a few months while you get the hang of it, especially if you're trying to get out of debt and your budget is tight. But carry hand sanitizer if you do this and sanitize after handing cash...cash is germ filled! (Don't do this if you're at high risk for Covid19)
-Use goals for all the categories you have every month to make your actual budgeting session go very quickly.
-I get paid once a month, but if I got paid every week or two weeks I would do the buffer thing so I can budget the whole month at once. I highly recommend it, but it may take awhile to get there so be patient.
-Always put $ in "Stuff I forgot to budget for", and expect it to run out. I actually use this category to move money to other categories so what I actually ended up spending more money on is tracked correctly.
-Use emoji's in your account names and categories if that makes you smile when you open your budget.
-Also use due dates and payments in category or account names as needed, so the information is always there
-Be creative with your budget organization and make it fit your life. You don't need to stick with their standard category groups and category names that came with YNAB.
-For any type of spending that you are trying to pay more attention so you can cut (or at least spend only mindfully) you should track it in it's own category. For any category that you will spend no matter what, you can try combining them to make your budget more granular and simpler.
-Get off the credit card float ASAP. I feel so much better now that I'm off it. I was always a paid in full credit card user except during my emergency, but I was always on the float. Now I'm so much farther from a financial disaster than I was before.
-Be patient with yourself as you learn to separate account balances from category balances. Many people still want to keep their different savings accounts, like I did, and that's a natural result of not yet trusting yourself to stick to your budget and not being committed to sticking with it long term. When you've stuck to your budget consistently for 6 months or more and you can see yourself doing it for years, then re-think that organization and consider keeping your accounts totally separate from your budget categories.
-On that note, once you get used to YNAB you can work to simplify your accounts so you have less work to do
-As someone else mentioned, reconcile your accounts often and use scheduled transactions with the running balance to make sure your accounts have enough money in them. Move as much to a HYSA as you safely can.
-Some people track their entire net worth in YNAB, but I prefer my budget to be simpler and to only consist of the money that I'm dealing with right now. Do what works for you. I don't even track my mortgage in YNAB, since it'll be paid off in 15 years if I don't pay extra on it. The only debt I have in YNAB is the debt I'm working on crushing right now.
Ok, that was a lot! Glad you're here. The world needs more YNAB right now.
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The longer I've been at this, the more I've come to appreciate the methodology. Rule 3 especially, works on so many levels. At first glance, there's less money for something else, and having accurate category balances makes complete sense. However, digging deeper, the psychological aspects are huge, and those benefits come about automatically by choosing to not kick the can down the road. The implicit parallels with behavioral conditioning are unmistakable. (Acknowledge the issue. Is this really an issue? What are the consequences? etc.) Moreover, the process of reallocation (ideally before spending) really cements an understanding of true priorities.
Speaking of priorities, I've seen people apologize for "indulging" in a daily Starbucks run, as if Society shames them. I say if that moment of peace is important to them, and they're OK with the consequence that less is available elsewhere -- thank you Rule 1 -- then they should own it, not apologize for it. Their budget, their priorities.
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dakinemaui Rule 2 was the big breakthrough for me. I had tried to budget before YNAB. I would write down my income and normal monthly expenses and see that I would have that covered. But then big expenses would hit and I wouldn't be prepared to pay for them.
Also, the whole proactive thing was huge. Allocating those dollars before spending them versus seeing after the fact whether I stayed within budget was a game changer. When I started YNAB, my finances were extremely tight. Especially when I suddenly had to pay both of my mortgages unassisted while additionally making child support/alimony payments.
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One trick flies in the face of "conventional" wisdom, and that is the use of CC float. It's not something evil -- it's merely the natural progression out of debt
Interest-bearing debt -> Interest-free debt, a.k.a. float -> debt free / paid-in-full
However, going the other direction can be advantageous. Riding the CC float is effectively an interest-free loan for whatever amount you can consistently make in budgeted purchases each month. Here's a few useful things off the top of my head:
- Accelerate getting to where you can Live on Last Month's Income (pushing all income into next month's area) -- greatly simplifying process and improving clarity
- Reducing other interest-bearing debt -- ride the float on one card (interest-free) and apply the "loan proceeds" to pay down the other card (reducing interest). Bonus points if the card used to float has purchase rewards.
- Floating reimbursements beyond the next due date. (Mind the ceiling on the amount you can safely float.)
- Source of funds for "unexpected expenses" (an emergency fund).
To be clear, I'm not advocating to ride the float forever. You obviously lose the ability to deploy it if you're already riding it, so working back to paid-in-full status should be a priority. At any rate, judicious use of the CC float is just another tool in the drawer. Like any tool, it can make things easier or it can cut you deep. Use it in a safe manner.
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Arguably, the most transformational / lightbulb concept, Classic Rule 4:
https://web.archive.org/web/20151217134843/http://www.youneedabudget.com/method/rule-four
This "state" is characterized by being able to budget all income received this month in next month's area. While you can switch screens and budget income to next month as it arrives piecemeal (multiple paychecks, spouse income, etc.), most veteran users cognizant of the concept choose to queue up paychecks in a holding category during the month and budget next month's area all in one shot once they've received it all, ideally with only a couple clicks. This holding category is often imaginatively called "Next Month's Income". 😉
This effectively yields a single "effective paycheck" and allows you to budget on a cycle aligned with your expense recurrence -- a huge simplification with vastly increased clarity for anyone with more than a single paycheck per month. This is the essence of Classic Rule 4. Sadly, YNAB doesn't teach this any longer in favor of their Age Of Money gimmick (a backwards-looking spending metric that has zero to do with budgeting).
At any rate, this can also be integrated with a budget "template" or nominal budget values. YNAB teaches the use of Goals for this, but I just keep my template in next month's area. This stays true to the underlying YNAB principle of spending guidance backed by cash in hand, in spite of the at-times over-budgeted nature of next month's area.
This thread has my description of an efficient and safe workflow when following Classic Rule 4 with YNAB:
https://support.youneedabudget.com/t/m2acjg?r=36acrq
Feel free to ignore the part about the template if you'd prefer to use Goals. Later in the thread has some comments regarding efficient operation when you can't push all your income into next month's area (the so-called "partially Buffered" case).
Many more insightful comments are made in this thread by Move Light Sound Life and other veterans:
https://support.youneedabudget.com/t/m1hqyb3/trying-out-the-ynab-buffer
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I started using YNAB3 somewhere around 2008, I think. I had changed jobs and taken a pretty hefty cut in salary to get my foot in the door at my choice of employer. My husband and I were looking at all of our bills and trying to shave where we could. I had become a pretty serious couponer, and it was through one of those forums that I heard folks talking about Dave Ramsey and YNAB. I opted to try YNAB, and I have to admit that when I first downloaded it, it seemed too simple to be effective. I had used Managing Your Money for years, and I just didn't get the change in mindset. That said, by the end of the first 30 days I was hooked! For me it was all about the feeling of control that came with knowing just how we would make ends meet. Before long, we were saving and giving more than we ever had been able to do before. Life has thrown us many curves over the past 12 years, including the loss of our home and business in the Paradise Camp Fire, and we have relied on YNAB to guide us during some pretty turbulent times.
Some things that have worked for me:
1) Paring down the number of categories. I know this is a personal thing, and I'm pretty anal. I originally had a lot of them, but they really only created extra work with little benefit. For example, I started with breaking out household items from groceries. It was a nightmare to separate everything on the receipts for a category that I did not need to scrutinize. I probably still have more categories than some folks, but I have eliminated or consolidated a whole bunch over the years.
2) I also use an Income Next Month category, which IMHO is one of the most egregious loss of features in nYNAB. Although I understand the concept, the age of money means nothing to me when I budget.
3) I record all my purchases daily, either on my phone immediately or on the PC when I get home. Knowing exactly where I stand at all times is a part of that feeling of control that I mentioned earlier.
4) This is probably bordering on heresy, but I really do not give every dollar a job when I receive it. Until recently, I just left the extra in TBB, but I have compromised and now have a category I call the "BLOB--wherever needed" (until I come up with a better name 😄). I understand the psychological effect of priorities and trade-offs between categories, but once I cover my bills (including true expenses) and savings goal for the month, I really do not know what I'm going to spend the leftover dollars on; it could be a hobby, the grandkids, or replacing utility items lost in the fire. Moving money among categories takes more effort than pulling it from just one. It's really not so different from the "things I forgot to budget" category that some other YNABers use. As long as everything else is covered, I like the freedom of NOT assigning those extra dollars.
So that's my story. Sorry if all this cooped up time has led to TMI. I also like reading how others approach their budgets!
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Friendly_gal I have 2 categories similar to your "BLOB" account mentioned above. One I call "slush fund" which is a general holding area where extra is swept into or out of, if a little extra is available or needed somewhere else.
The other is called "Cash Holding" which is a little more specific, place for temporarily holding minor windfalls, like bonus, tax returns, etc. Something that I probably have a plan for, but if I put it into the "appropriate" category right now, I'll probably forget what it's for, and just spend the category. I hold it there just temporarily, until I'm ready to make the purchase I had planned with it.
For example, after i got my last bonus, my wife and I were talking about getting some "home organization" things to help cut down on clutter. Including possibly hiring a person to come and give us ideas about systems we can implement, etc. So that money went into "Cash holding" and as we got things, we assigned the transactions to the appropriate category, and then moved that amount out of Cash Holding, into the category we just spent. That way, I know the "general" household budget is still available for general household things, and when we purchase a bunch of stuff for the home organization plans, it's "extra" but already accounted for, so after transferring from Cash Holding, we've still got the appropriate amount for "general" household. The Cash holding isn't for assigning transactions, just for holding until it's ready to be moved to the appropriate category.
Anyway, may sound kinda convoluted, but it works for us.
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Bruce Your cash holding category is exactly what we do! It didn't dawn on me until you spelled it out, but avoiding inflation in the spending category is the reason I couldn't verbalize a year ago. Thank you!
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Bruce I think we all have a convoluted process or two somewhere in the budgeting process that works for us. 🙂 I just might consider changing the name "blob" to "cash holding." It would work more like your slush fund, but the name is apt.
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Friendly_gal Mine's called Limbo. It's basically the storehouse until we get a chance to discuss what we want it to do. For instance, the tax return sat in here for 2 months. I DON'T want to leave it in TBB because it's extremely useful to have that at $0.
We have a different "slush fund" that is my goto for WAMmunition (covering overspending) or one-off things for which I don't have a category (and don't want to make a category for that).
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dakinemaui My names aren't so original. My "Extra Money" category group contains Income for Next Month, Unassigned funds (the extra that waits around to the end of the month or to WAM, Unassigned - Bonus (the store house for windfalls), Holding - a category we use for cash flowing some expenses.... this last one gets about 4-5% of whatever is in Unassigned at the end of the month.
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Mine is not too imaginative but is called Freedom Fund.
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nolesrule I know it should be obvious, but I had a couple of my extra holding funds in different category groups. I knew where they were (and they made sense "at the time"), but after reading your comment, I moved them all up in the same category group as my INM fund. It's much more logical, and I just hadn't taken the time to organize them yet. So thanks for mentioning that they were all together. It provided that extra bit of incentive to move mine as well. :)
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Bruce I used to have them all over the place too. I only made the change a couple months ago.
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dakinemaui
dakinemaui said:
I DON'T want to leave it in TBB because it's extremely useful to have that at $0.Would you mind explaining how it is useful? My guess is that it has to do with reports, which I have yet to really explore, but are there other reasons as well? And how do I get rid of these silly italics after I've created a quote? 😂
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Friendly_gal A TBB of $0 most of the time has at least the following advantages:
- Error detection from an errant budget entry. It's darn easy to brush the delete key or hit some number. Perhaps more of an issue with laptops where the heel of your hand bumps the trackpad.
- Batch overspending correction efficiency. Select all overspent categories, Available To $0, then start reducing budget entries on low-priority categories until TBB is back up to $0.
- I know my plan is as complete as it can be. Every dollar has a job.
FWIW, reports are strictly transaction-based.
Getting "out" of a quote block isn't obvious, but turning the "bullet" paragraph marking on & off works if you're not on a mobile browser.
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dakinemaui Thanks! I certainly get the thing about the laptop--I have inadvertently deleted whole paragraphs when trying to respond to some of these posts! I also like point two. I often overspend in several categories on the same day knowing I am going to cover from my slush fund. It sounds like I can cover them all at once, instead of individually. Finally, thanks for helping me trash those darn italics!
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I had tried Mint, Microsoft Money, a couple of Linux options, before finding YNAB4. It clicked immediately as a program, though I did get mental whiplash for the couple of weeks it took me to really understand the Rules. That was back in 2013, and later I was one of the beta testers for nYNAB a.k.a. YNAB on the web and YNAB mobile. I migrated my history from YNAB4 when it was first offered, and it worked perfectly for me. After a few months of double entry between YNAB4 and YNAB on the web, I decided the web version was better. Especially when Toolkit came along and made it work the way it should, plus some nice bells and whistles.
Automating everything is important for me, so I use automatic bill pay for everything available and scheduled e-checks for everything else. Scheduled transactions in YNAB to track those, and Goals wherever they make sense bring my weekly workload down to the point where I can read and post here. 😉
As dakinemaui says, I use the rewards CC for almost all purchases, and have it set to automatically pay off the statement balance every month. Since I am buffered, I never have to worry about the big hit when the CC transfer takes place as it is already allocated. Some people say that PIF only means it if you pay to zero; I disagree. I tried that for a few months and found it messed up the balances and the automatic setting with the CC company. So now it is automated, there is never any fee or interest, and I get the cash back, and a little interest from the bank.
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I started using YNAB in September 2013. I've always been a solid money manager; I was the one who begged my parents for a checking account when I was 13 because I was sick and tired of keeping track of cash allowance and I wanted a check card. I successfully budgeted by account for over 15 years, even at one point going so far as to open an account at a different bank to have my pay from a part-time job in college deposited, so that I could save all the income from that job for a summer program I was taking part in. I also did things like buying a VISA gift card with my Christmas budget so that I wouldn't run the risk of overspending my budget. I found YNAB because I was a broke grad student in a high COLA and I wanted to take a PT job that would be a better job but which would have fewer hours per week.
The lightbulb moment for me with YNAB came when I was setting up my very first budget. Because I was used to "sequester this, sequester that" I started setting aside the $5/wk I would need for gas. And I thought, "Oh I could get a BP gift card! And I can just load the $5 each week." And then something made me stop, and I went, "Wait. If I spend only the money on groceries that is in groceries, and only the money on bus passes that is set aside in bus passes, then at the end of the week, there will still be $5 in my account. And at the end of the next week, there will be $10 left in my account. Holy crap. I don't have to buy a gift card. If I follow the rest of the categories, the gas money will still be there when I need it."
Back in 2013, nobody had ever heard of Age of Money, which I used to be a bigger defender of and now, after 5 years, have come around to considering to be an absolute farce. Back then, you got buffered. I was able to buffer in 54 days. I found the info on the separation of accounts and categories, and found a great explanation of how your buffer could be buffered without your account holding the buffer, and I separated in my mind my checking and savings accounts for good. I closed all my sub accounts at Capital One 360, and by mid 2014 (might have been 2015 when I added the Cash account), I had switched to 4 primary accounts in YNAB, one for each type of tender. I called them "Checking, Credit, Cash, and Capital."
For me, Rule 2, Classic Rule 4, and separating purpose from location have been revolutionary. I know that somewhere in my accounts, there is money for thing X, as long as I planned for thing X. I know that if I own a car, I have to have money set aside to fix the thing on occasion. And importantly, once I've set aside my Rule 2 funds, the rest of the money is mine without having to worry I won't have the funds for a major issue when it arises. Those three things are at the core of YNABing, AFIAC. I also like the thinking that really, everything is Rule 1: everything comes down to giving money jobs, and that also, everything is savings. Some is super long term savings, some is very short term savings, but it's all savings.-
WordTenor I think when you really get to the point where you trust your budget, things really change in how you learn to use YNAB. This transition is a combination of learning to understand and trust the YNAB software itself, to learning the habit of checking your category balance before you buy and tracking diligently so you don't get behind, to having enough time using YNAB that you know you can and will stick with it. But that's really a point of change, the point where you go from a "trying out this YNAB budget thing" person to the "I need to check my YNAB budget before I spend money so I know the money for my priorities is there when I need it" person, then the separation of accounts thing happens naturally as a result of trusting yourself and the software, plus some amount of being hassled on the forum if you ever even mention that you think it's a good idea to match your savings account balances to your budget category balances...
I am in the process of moving my checking to an Ally checking account, where I have my HYSA, so I can EASILY and instantly transfer funds from my savings to my checking without any lag, and so I can set up a backup savings account that my checking will draw from if I ever overdraft. I used to like that I had a few days of lag to move money from savings, as a way of protecting my money from myself, but now I realize, I'm going to stick to my budget no matter what's in my checking account, so I should actually make the flow of cash to/from savings EASIER, then I can keep as much in savings as possible. This is a huge difference from my prior thinking even earlier when using YNAB.
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casner said:
Some people say that PIF only means it if you pay to zero; I disagree.Those people would be wrong. PIF means you can pay to zero at any moment in time. The smart fish just pays the statement balance when it's due.
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Superbone and for me, autopay so I don't have to worry about upcoming CC payment. I still keep track of it, but don't worry any more.
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casner Yes, that too. I have everything autopaid.
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PhysicsGal said:
then the separation of accounts thing happens naturally as a result of trusting yourself and the software, plus some amount of being hassled on the forum if you ever even mention that you think it's a good idea to match your savings account balances to your budget category balances...😂🤣Man, it is such a freeing concept when you learn to decouple your budget from your accounts. It really pains me to read about Nick True and his disciples matching categories to savings accounts.
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Superbone This is *the* thing that turns YNAB from a budget into a wealth-building flywheel.
Also FWIW in my original even more wordy post above, I had thanked you for sharing your referral bonus with me back when I was a broke YNAB-desiring graduate student. I paid it forward. :) Thank you!
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WordTenor First of all, that first sentence is so well crafted and beautifully encapsulates the meaning and value of the account decoupling concept. You've definitely lived up to your username and then some! 😄👋
Secondly, it was my pleasure to do that all those years ago and to watch you blossom into the YNAB expert and advocate that you are today. You have more than paid it forward! 😹
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Superbone Does he really recommend that? Learning to separate location from purpose was when it all clicked for me. I was going to try out a few of his videos, but now I'm not so sure. Is he a self-proclaimed expert or is there more to him?
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Friendly_gal Yes, he does. Not only that, he calls decoupling the "lazy way". I've only watched his one video on savings and savings accounts so I don't have any feedback on his other videos but I have seen a lot of users come through these forums that have mentioned how they've learned to sync their categories to savings accounts via his videos.
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Superbone "Lazy" == "work smarter, not harder" 😎
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dakinemaui Yeah, no, I don't equate those two. 🙂
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jenmas said:
Move Light Sound Life I’m sorry to report that Patzer passed away last year. He is definitely missed.I am very sorry to hear that as well. I always enjoyed his posts and was wondering why he has not posted in a while. He was definitely at the top as far as good advice goes.
