How to not break YNAB’s philosophy.

How to not break YNAB’s philosophy.

I’m having a problem and could use some help.

I have an obscene amount of money in my accounts in YNAB.  This amount is probably pennies to some, and it’s beyond my wildest dreams.  It’s four months of my living expenses.

I know I need to save more.  I don’t have enough in any of my very expensive categories, for things I know I’m going to have to pay for one day.

And I have an obscene amount of money in my accounts in YNAB.  I am stuck here.

The result is I’m spending money I don’t have to.  Sure, I can justify the spending and the bottom line is, it isn’t a matter of life and death, I don’t have to spend it right now.  I am spending money because, what the heck, I have it and it feels good to spend and accomplish what I feel is good.

My first instinct is to take the money off-budget and hide it from myself, in an account I don’t check very often.  But that violates YNAB’s philosophy of not keeping individual accounts, just dump everything into YNAB and do what you can with it.  Well, it turns out this worked so well I now have more than I know what to do with, much more than I need for my monthly budget.

I was thinking of taking things one step further and taking the money I have built up in my larger categories completely off-budget and counting the money budgeted there monthly as spending.

I would take this money off-budget in YNAB and move it over to the net worth side of my finances.  My net worth report side is where I keep my longer term, illiquid, assets.  Things not needed in my monthly budget.

YNAB is my active monthly budget.  My complete net worth is something else.  In an ideal world, every month I would pull the excess from my active monthly budget, in YNAB, and move it over to my Net Worth calculation.  That is what I believe I would be doing by moving the money saved for very long term, emergency savings, off-budget.  I would be removing excess from my monthly budget and moving it over to long term assets.

One of my goals is to have my Net Worth parts generate enough monthly income to help out in the active monthly budget, in YNAB, when necessary.  For now, the investments there compound and wait for the day when I will need them.

This would also allow interest earned on the savings in these individual categories to compound, grow a little faster, with time.

I keep a separate net worth spread sheet for everything.  This is where I keep assets I don't track in YNAB.  I don’t keep my stocks in YNAB.  I don't keep my mortgages or real estate in YNAB, I simply count the payments as money spent, which it is.  I also have a few other things I keep only in my net worth report, like my emergency fund invested in stocks and money saved for long term goals.

Is this wrong? Have recently been told it is and violates YNAB’s philosophy. What would you do? Or maybe recommend? Here is the thread. https://support.youneedabudget.com/t/y7anmf

Also just finished reading this, a couple of times.  http://wealthygardener.com/save-urgently/

That is what I want - security and possibilities.  I want to save urgently.

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  • I think you will find most people (including me) don't keep their mortgage and house and investments in YNAB.

    It throws off the net worth but in my case I think of my finances in 2 parts.

    Part 1 is daily life. This is where YNAB fits in. I have credit card debt so the net worth shows me how I am doing on rebalancing my life away from debt and toward having money for day to day living.

    Part 2 is longterm. This is my mortgage, retirement savings, and non-financial assets live.

    Maybe once Part 1 is done I will move some or all of Part 2 into YNAB but perhaps not. I will have to see when I get there.

    I am sure there are others on here that can offer great advice on how to get YNAB to handle that. But did you "break YNAB philosophy"? Perhaps in theory but I find that my YNAB setup evolves over time. And that fits with "rolling with the punches".

    Reply Like 2
  • You need to budget money to your categories according to your priorities, and then use your category balances to guide your spending making decisions. If you are overspending your categories, then it means your actual priorities and the priorities you put in the budget aren't aligning. You need to accept one or the other.

    Four months income is not obscene. I currently have nearly 2 years of spending in my budget, probably about a year of net income... but that does include a house down payment which will be leaving the budget in less than 2 weeks.

    Reply Like 6
  • It doesn't sound like you are using category balances to guide spending choices.

    Check the category BEFORE every purchase. If there's not enough money, then identify a lower priority from which to move money. If you cannot identify a lower priority category, then that makes it a lot easier to say, "no" to that purchase.

    Reply Like 5
  • I have way more than my monthly expenses in YNAB, but that money is in categories meant for longer-term savings (like car replacement in the next year, the portion of my emergency fund that is outside of investments, etc). I have as much as possible of that in high-interest savings and a rewards checking account so I earn interest each month. It's not against YNAB philosophy to have multiple on-budget accounts. The problem is that many people are used to budgeting by account, which is unnecessarily difficult when using YNAB correctly. Go ahead and open a savings account & put anything you don't need in the next month in it if that is what you want to do. No need to match categories to accounts, just figure out the amount you are comfortable with in your checking & transfer anything in excess over when you get paid. Then stick to your categories when deciding what you can afford to/want to buy.

    Reply Like 4
  • You're fooling yourself if you think moving money out of YNAB will stop you from spending it. Assume you do, and you still go off and swipe your CC on something that causes overspending. Every penny of your on-budget money is spoken for, So what's left?

    That's right -- that off-budget "savings" is so easy to dip into because it's not concrete. So much for your plan of preventing yourself from spending it.

    If that money were still on-budget, it would be in categories with concrete purposes defined. It's far more difficult to move money from the Unemployment category so you can go out to eat for the 5th time this week.

    Being aware of the consequences of overspending -- that's what prevents you from making stupid decisions.

    Reply Like 7
  • If you think moving money out of the budget would help, ask yourself why. Is it because somehow "an account that I don't check very often" feels more concrete? A boundary that is harder to cross? 

    The secret to YNABing well is to learn to treat your most important categories with the same degree of reverence as you would a special savings account. Just like you wouldn't spend more if the account was empty, you have to learn not to spend more if the category is empty.

    The way to build this habit is to check your categories before you spend, and, if there's not enough money, decide where the money is coming from before you spend any. This will force you to grapple with your priorities in real time. When you are living with your priorities, you will feel better about your spending and savings. Sometimes, what's quote-unquote "right" might not be right for you. I was once analyzing my budget and realized I was saving to pay down my student loan, but had a broken TV that I missed watching. Since the cost of a TV would only set me back on my student loan payoff by a month, I literally got up from my computer, walked down the street to Best Buy, and bought one right then and there. I haven't regretted it once. And *that* is  the kind of spending that really feels good. 

    Reply Like 14
  • I totally get it babe, I'm a spender too.  I love and want all the nice things.  But I'm also a militant YNAB saver.  Of course, there's always aspirations I don't or can't live up to right now.  I don't have a car replacement category like so many others seem to, and that makes me feel less-than.  I still have yet to rename my Emergency Fund as "Income Replacement" because my gosh, what if something else?   I also have recently ended up with an "obscene" amount of money in YNAB through saving, bonuses, and an inheritance.  The most I've done is to consider where the money is physically kept to maximize interest returns, but I will NOT take it off budget because then I can't gauge my progress or shortcomings.

    I do various little things to stay disciplined and add to them regularly.  I write myself very specific dated category notes to record what my plan is for this money.  If it's in writing, then I mean it.  AND since I just figured out how to add emojis to categories, I've started using them as tags.  I started putting a 🔒on categories I am NOT to steal from because they have a very specific funding/spending plan.  This reminds me they are OFF LIMITS.  I also added a 📊to at least 3 categories a month that I've decided I want to fund with my average amount spent (no built-in goal for that) to be a bit more realistic about my True Expenses (i.e., stop stealing from Christmas gifts).  They get a lock too.  But I'm pacing myself with this because what use is my plan if I restrict too much and burn out?

    My Toolkit buffer is 305 days today, but my goal is to hover around 180 at some point, if possible.  I know this money will be spent on necessities and our income won't necessarily support that.  My age of money is plummeting because of some new fixed expenses.  But whatever, it's the situation right now.  So I'm not saying go and do all the silly things I do, but find your own and see if it helps with discipline, and then give yourself some leeway and pace yourself.  

    You can totally do it.  I break little rules here and there, but this board really helps me stay focused and motivated, and also gives me ideas and aspirations. Good luck!! :) 

    Reply Like 5
      • MXMOM
      • MXMOM
      • 3 mths ago
      • Reported - view

      @Annieland  🤩 I like the emoji idea. I can't it to work (here at work) but that may be because our functionality is locked down). I will try at home.

      Reply Like
      • MXMOM
      • MXMOM
      • 3 mths ago
      • Reported - view

       Annieland I still can't get the emojis to work 😢. I followed the instructions on the YNAB site (using the Windows key + ; but its not working. What am I doing wrong?

      Reply Like
      • Annieland
      • YNABbing every day since 2009!
      • Annieland
      • 3 mths ago
      • Reported - view

      MXMOM Hmm.. I'm on a mac, so I just "right click" in the text box where you rename a category.  And I get a popup menu in my browser that has "Emojis and Symbols" at the top. I select that and I see the emoji menu.

      Reply Like
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 3 mths ago
      • 2
      • Reported - view

      MXMOM ✌🐱👤🐱🐉There are different ways to make it happen in Windows. For my Windows 10, I enabled the "touch keyboard" which appears in the taskbar. See my thread here:

      https://support.youneedabudget.com/t/367632/fun-with-emoticons-in-ynab-and-windows-10

      Reply Like 2
      • MXMOM
      • MXMOM
      • 3 mths ago
      • Reported - view

      Annieland Everything seems easier on a mac.

      Reply Like
      • Annieland
      • YNABbing every day since 2009!
      • Annieland
      • 3 mths ago
      • 1
      • Reported - view

      MXMOM Uhhh you just figured that out?? 😂😂

      Reply Like 1
      • eloquentz
      • Numbers Wizard (Accountant), Acoustic Artist (Musician) and Jill of all Trades (Wife & Mother)
      • eloquentz
      • 3 mths ago
      • 1
      • Reported - view

      MXMOM It is Windows key plus the period button, not the semi colon.

      Reply Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 3 mths ago
      • Reported - view

      eloquentz On Win 10, they both work.

      Reply Like
  • Thank you all for your responses.  I feel you are talking as though I don't have enough in the categories I am spending from, which is not the case.

    Maybe I wasn't clear?  I have enough in the categories I'm spending from.  It's just that it would serve me better to continue saving with urgency and save up for these expenses I'm simply paying for now. I can simply pay for these things today, because the balance in most of my categories is many times what I normally spend.

    Budgeting has been very successful for me, I have saved more than I thought possible.  My categories are very fluffy right now.  That is what I feel is holding me back, there is more than I need in most categories and  too many categories I can take money from to cover my current spending choices if necessary.  My budget has lost the feeling of scarcity.  

    I want to take the excess out of my monthly budget, so there isn't more than I truly want to spend monthly in it.  By taking the money off-budget and moving it to a part of my finances I only look at monthly, it no longer stares at me daily, daring me to spend it. Yes, I am a spender..  It would also be in accounts dedicated to the jobs it has in my budget. The two categories I'm thinking about moving off-budget are my True expenses, medical category, and Long Term Goal, vehicle replacement.  They have grown quite large in the five years I have been using YNAB.  I don't know when the expense in these categories will occur, so I simply keep adding to them monthly.  Looking at them in YNAB, it seems I have "lots," which is not true.  Who knows what that next medical emergency will cost or when it will occur?  Who knows when I will need to purchase a replacement vehicle, or how much it will cost?  I don't.  All I know is that what I currently have is not "enough."  I could simply continue to let the category balances increase with additional funding and time, but I have lost the feeling of scarcity.  The main thing I would gain by moving these larger categories off budget is I would get my feeling of scarcity back.  

    Then again, you seem to be telling me it doesn't hurt to keep the money on budget.  Maybe I need to adjust my category balances to get the feeling of scarcity back?  Maybe I am simply fooling myself?  

    Reply Like 1
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 3 mths ago
      • 10
      • Reported - view

      MsTJ  

      Yes. The money that you consider "excess" belongs in your savings categories. That is what everyone is telling you. If you have so much money set aside for your wants that there's no overspending, but you feel anxious that you're not saving enough, then less money needs to be in the categories for your wants, and more needs to be in "medical" and "vehicle replacement." 

      And you do know how much you'll need for a vehicle replacement. This is a knowable figure. How long does your current make and model last, generally? How much does the make and model you think you'd like to replace it with cost now, and how much did it cost 5 years ago? This will give you the ability to estimate what you'll need to have saved by the time you need to buy a new car. When you hit that target, then you start to choose what you do with excess money. Does it become more vacation money? Does it become money for an even nicer car than you thought? That's up to you. The same goes for any other savings category. For medical, many people like to have 2x their maximum out of pocket amount for their insurance, which basically insures against having a major accident or illness right at the turn of a year, so that they could charge the maximum in December and then again in January. There's lots of ways to figure out how much you'd like to have saved--this is something that many here on the boards are experts at and would be happy to help with. But the bottom line is that you started this thread by saying you feel like you're just spending and spending and not saving, so that's why you've gotten the advice to heed your categories. 

      Don't have scarcity for scarcity's sake. There's nothing wrong with having plenty of money for wants. But if you feel like your savings is suffering, then you have to adjust your categories to fix that, and then you have to not take money out of those categories.  You are the one in charge of your priorities. 

      Reply Like 10
      • Annieland
      • YNABbing every day since 2009!
      • Annieland
      • 3 mths ago
      • 1
      • Reported - view

      MsTJ I do understand you have the money to spend in your categories.  My suggestions were to come up with little tricks to encourage you not to WAM from categories you don't intend to.  I mean, you could be one of those people who put their credit cards in a block of ice too.  I doubt it does much for their situation.  I think it's better to make visible positive changes towards goals, rather than pre-punishing yourself for the possibility of negative behavior.  

      Also, why break what ain't broken??  THIS is how you got to this surplus.  Why would you make a U-Turn back to start?  Like the others said, really think about what your plan is meant to accomplish and how likely it is to work.  Again, I get it.  But look for positive discipline, not negative punishment.

      Reply Like 1
      • adriana01
      • adriana01
      • 3 mths ago
      • 6
      • Reported - view

      MsTJ Maybe the issue is differentiating between what is "normal monthly" spending & what is "extra" or long-term savings by having more granular categories? For example, I have a little over 600 in clothing-related categories right now. My normal monthly spend is under 25. I have 300 set aside for a new suit & 300 for goal-weight clothing, because I know I will need it eventually. If I had left that 600 in my clothing category I would have spent it a long time ago, & then would panic if I had an interview that required better clothing than I normally wear. Having separate categories enables me to buy the clothing I need while not spending money I want to use on something else. I also have very granular categories for food & entertainment so I make sure to fund them appropriately, even though they can be fairly small amounts. For me, knowing exactly what a category is for (limited mixed-use) makes it easier to trust it both for deciding to spend & deciding to save. My work lunch category has gone down to a third of what it was because I decided that money was better used elsewhere--despite my total income going up over the same period.

      TL:DR: Your categories should reflect & enable your priorities. Where you keep your money depends on your preferences for convenience & earning interest.

      Reply Like 6
  • Thank you.  Your responses have helped me.  

    Reply Like
  • MsTJ said:
     I have enough in the categories I'm spending from.  It's just that it would serve me better to continue saving with urgency and save up for these expenses I'm simply paying for now.

     I agree with WordTenor , if you keep shopping at Zappos because you have lots and lots of money in your clothing category but you feel like this isn't reflecting your priorities, take money out of your clothing category and put it in Student Loan Paydown, or Medical Out of Pocket Max, or Roof Replacement. You are the boss of your money, not the other way around.

    Reply Like 6
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 3 mths ago
      • 10
      • Reported - view

      Agree with WordTenor and jenmas . Your problem is just that you have too much money in some of your categories. One solution many of us use is to put caps on our categories. For example, we fund our Household Goods category $50/month. But we also have a cap of $300. So if it hits $300, I stop funding it. If It has $290 at the end of the month, the next month I only fund it $10. I have many categories that I treat this way. Some have 3 month caps, some have 6 month caps, some have 9 month caps some have 1 year caps. It depends on the category and the spending pattern for that category. If we hit a cap, the excess is used to fund other categories that need to be funded faster or feel we're behind in.

      Ultimately, you need to decide on your priorities and move your money around to match your priorities. It doesn't have to stay in the category you put it in.

      Reply Like 10
      • Bezona
      • Formerly Gold Rhythm 3
      • Bezona
      • 3 mths ago
      • Reported - view

      nolesrule How do you apply the caps? Is this something you remember,  have written on paper, or a note in YNAB?? This is something I have been thinking about, but not sure how to implement.

      Reply Like
      • MXMOM
      • MXMOM
      • 3 mths ago
      • 5
      • Reported - view

      Bezona I assume nolesrule is using category goals which is what I do. Once the goal has been met, I am done.  I also achieved this by breaking down large expenses into smaller categories based on when I need the money. I first set up a category group for the overall group. For example, university for son. I originally had a BIG category goal for this but then realized I didn't need all the money at once. So I set up a category for each year. And then also realized we have committed to tuition and not necessarily residence so I split those up. Each one has a "by date" goal set up. As one fills up, any savings gets funneled to the next one. Kind of like a champagne glass fountain. 

      Reply Like 5
      • dakinemaui
      • dakinemaui
      • 3 mths ago
      • 4
      • Reported - view

      Bezona Most people put the cap right in the category name for easy reference. For example: "Household Goods - $50/mo, $300 max".  The category notes are also an option.

      Reply Like 4
      • MXMOM
      • MXMOM
      • 3 mths ago
      • 1
      • Reported - view

      dakinemaui good plan. I have put my preauthorized payment dates in each category because I am not a month ahead and I am working on only budgeting money I have right now. 

      Reply Like 1
      • dakinemaui
      • dakinemaui
      • 3 mths ago
      • 1
      • Reported - view

      MXMOM Yep, having the outflow date on hard expenses is even more common than putting the cap in there. Ordering the categories within a group by outflow date is also useful.

      TBH, I feel the manner in which you budget should impact the organization of the budget groups. When paycheck-to-paycheck(ish), it's helpful to have "temporal" groups or those related to "when" you might budget.

      For instance, the Immediate Obligations default category needs to be funded every month, it's unlikely you can reallocate from them, and you'd expect them to empty every month. True Expenses, though, are expected to accumulate across months and there is less aversion to reallocating from the ones further out.

      Another approach (but still temporally related) is to use a group for each check (Check 1 categories, Check 2 categories). This makes budgeting a little more convenient (fewer clicks). The only hard part is finding a "fit" (identifying these subsets).

      On the opposite end of the spectrum is "functional" groups, which are more commonly employed by someone who can budget the entire month at once. The are focused on the "what" rather than the "when". Groups like "Housing", "Transportation", "Entertainment", etc.

      Reply Like 1
      • MXMOM
      • MXMOM
      • 3 mths ago
      • 1
      • Reported - view

      dakinemaui 

      dakinemaui said:
      On the opposite end of the spectrum is "functional" groups, which are more commonly employed by someone who can budget the entire month at once. The are focused on the "what" rather than the "when". Groups like "Housing", "Transportation", "Entertainment", etc.

       This is our approach. We migrated over to YNAB via Dave Ramsey so we were doing the budget before the month begins approach.  We still do that for our budget meeting but then i allocate the "real" money each payday (which is why the date in the description is helpful). I realized we were riding the float which is ok but dangerous. One thing I like about YNAB is that I can rearrange my budget over time without losing the history. 

      Reply Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 3 mths ago
      • Reported - view

      Bezona Unfortunately it has to be managed manually. A goal type to manage it for purposes of auto-budgeting has been requested in the past, but in the 3.5 years since launch no new goal types have been added.

      Reply Like
  • MsTJ said:
    Maybe I wasn't clear?  I have enough in the categories I'm spending from.  It's just that it would serve me better to continue saving with urgency and save up for these expenses I'm simply paying for now. I can simply pay for these things today, because the balance in most of my categories is many times what I normally spend.
    Budgeting has been very successful for me, I have saved more than I thought possible.  My categories are very fluffy right now.  That is what I feel is holding me back, there is more than I need in most categories and  too many categories I can take money from to cover my current spending choices if necessary.  My budget has lost the feeling of scarcity.

    Like others have said, that's your problem right there. It sounds like your categories are over inflated. Most of your categories shouldn't have "many times what I normally spend". Why is your Emergency Fund only four months? Maybe work on building it up to six months of spending. Are all your other savings categories fully funded? Maybe work on them as well. I have many caps on monthly spending categories. Don't let them all balloon up to more than you need. 

    Reply Like 3
  • MsTJ said:
    there is more than I need in most categories

    It's human nature to spend to the line. Same thing with getting work done "just in time" (or a little late) -- ask any Project Manager, they'll back me up.

    I therefore intentionally set most of my discretionary categories a little low. I invariably overshoot a little, reallocate from somewhere else, and all is well. If I were to comfortably pad my categories, I would still have a tendency to spend until the category was empty -- obviously resulting in more total spending in the latter case.

    I mean you pretty much said it yourself -- fluffy categories make it OK to spend. You don't need to remove money from the budget. Just remove it from categories that don't need it and put it toward something more meaningful or important to you.

    Reply Like 9
  • Thank you all.  I have given my overly large categories a hair cut, and moved the money over to a couple of  goals I never thought I would reach.  Now I have less in some categories I was spending too much from.  My budget now reflects my goals.  

    Your insights have helped.  Thanks again.  

    Reply Like 13
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 3 mths ago
      • 9
      • Reported - view

      MsTJ 

      MsTJ said:
      My budget now reflects my goals.  

       That is ultimately what you should strive for. When your budget is no longer reflecting your priorities, change your budget. 🙂

      Reply Like 9
  • I'm glad that you've figured out a little bit better how to manage the amount you have. Here's just a few more thoughts for you after having read through this thread...

    Firstly - why do you need a scarcity mindset? That seems to me to add undue pressure to life. It might be worth considering why you feel the need to utilize that mindset in order to feel "successful" or whatever word you want to apply to it. Just an observation.

    The other thing you can do budget wise is to move certain things to a group category that is for funding into the future, and then collapse the category so that you can't see it. You can easily add to it when you move money around, but you don't have to have it staring you in the face constantly. So if you have some categories that are funding long term goals, like savings for a car, home repairs/remodel, long vacation, or other bigger expense, you can put them all together in one group, and then collapse the category so that you aren't looking at the funding sitting there all the time. I tend to do that with things that I don't want to see all the time (either because there's "extra" money sitting there, or because I wish there were more! 😂) so that it doesn't distract me from what's important.

    And congrats for really turning your financial situation around! You have done exactly what YNAB was designed to do - get you into awareness with your money so that you can change your habits. Now it's time to shift your thinking around some things to apply the system in a new way. Your money situation has changed, and so now how you budget can shift, too. Kudos to you!!

    Reply Like 3
      • MsTJ
      • Gray_Nomad_f6eeb59e1a1c
      • 3 mths ago
      • 4
      • Reported - view

      farfromtheusual 

      farfromtheusual said:
      Firstly - why do you need a scarcity mindset? That seems to me to add undue pressure to life. It might be worth considering why you feel the need to utilize that mindset in order to feel "successful" or whatever word you want to apply to it. Just an observation.

      I want a scarcity mindset because I still have huge goals.  I want to pay off an obscene amount of mortgage debt.  I want to pay this off while I still have enough life left to enjoy it.  I am already retired, and did not retire early.

      farfromtheusual said:
      The other thing you can do budget wise is to move certain things to a group category that is for funding into the future, and then collapse the category so that you can't see it. You can easily add to it when you move money around, but you don't have to have it staring you in the face constantly. So if you have some categories that are funding long term goals, like savings for a car, home repairs/remodel, long vacation, or other bigger expense, you can put them all together in one group, and then collapse the category so that you aren't looking at the funding sitting there all the time. I tend to do that with things that I don't want to see all the time (either because there's "extra" money sitting there, or because I wish there were more! 😂) so that it doesn't distract me from what's important.

       Already do this.  Thank you.  Have two category groups for this, True Expenses and Long Term goals.  These are the two I initially thought I wanted to move off budget.  I simply fund them with a predetermined amount monthly.  They are still too small today, and grow bigger every month. 

      farfromtheusual said:
      And congrats for really turning your financial situation around! You have done exactly what YNAB was designed to do - get you into awareness with your money so that you can change your habits. Now it's time to shift your thinking around some things to apply the system in a new way. Your money situation has changed, and so now how you budget can shift, too. Kudos to you!!

      Thank you.  Yes.  YNAB has changed my financial life in ways I never imagined.  Things I only dreamed about before, because they were simply impossible, with my income, have been achieved,  Today I am reaching for ever bigger goals, because they are now possible.   In an ideal world, I will always have huge goals to reach for.  I don't want more money to waste on things that don't matter.  There is no satisfaction there.  My goal is to have huge goals that will improve life, for myself and others, always.

      Reply Like 4
    • MsTJ so my question to you is what if you can have big goals AND have money in funds just sitting there. What if it can be BOTH instead of scarcity OR abundance?
      I have found that when I have let go of the "need" for scarcity, that I can be much more comfortable, and much more easily work towards my goals, too, because I'm not putting so much negative pressure on myself.

      Congrats on keeping moving forward! I hope you are able to enjoy everything you've gained because that IS what it's all about!

      Reply Like 2
      • MsTJ
      • Gray_Nomad_f6eeb59e1a1c
      • 3 mths ago
      • 3
      • Reported - view

      farfromtheusual Again, maybe I haven't been clear?  I do have both scarcity and abundance, the way I think about things.  I practice scarcity in my monthly budget, so I don't spend too much on things that don't truly matter to me.  My goal is to get my monthly budget as small as possible, and still live a good life. That allows me to have abundance in the categories that do matter.  I want to be up to the next bump in my road.  

      A little "for instance" I ran into this month.  I have an apartment complex. this month I had to replace two water heaters, at around $1K each.  I didn't see this coming.  Because I practice scarcity in my monthly budget, I have enough (abundance) in the categories to pay for this expense.  

      There are so very many different ways to look at a budget.  What is best? What is too much scarcity or too much abundance?  Wish I had a universal answer, and I don't.  For me, it's spending as little as possible monthly, so I have more abundance when needed.

       Another "for instance" example is my vehicle replacement category, as mentioned above.  I have enough in this category to get a decent replacement if my current vehicle died tomorrow, for cash.  My current vehicle is 17 years old so that could happen at any time, even though it is currently still a good reliable vehicle.  And I continue to fund the replacement category monthly.  By the time my current vehicle dies, I can increase what I can spend to replace it.  

      That, to me, is abundance.  A little scarcity in my monthly budget is a small price to pay for that security.  

      Thank you for continuing to drill down on this.  It is allowing me to better define my goals.

      Reply Like 3
      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 3 mths ago
      • 3
      • Reported - view

      MsTJ 

      We think along the same lines.  I continue to both celebrate and whine about the scarcity that the zero-based allocation budget known as YNAB creates.  Some days I chafe at the self-imposed anxiety I create, but frequently I celebrate the meteoric improvement in net worth and cash liquidity. 

      It's a balancing act that requires continual adjustment. I guess that makes sense since what I'm balancing is growing, so my balancing act needs to shift a little.

      Reply Like 3
    • MsTJ this is a very interesting examination of choice of words!

      I understand your point, but I have to say there is nothing scarce about your life if you're able to handle replacing multiple water heaters for apartments that you are renting with ease. That sounds to me like peace of mind!

      And kudos for getting your current vehicle to 17 years. My BF is driving my older vehicle and it is going to need to be replaced very soon, though we are far from having a cash fund for it.

      I guess what I would say is that there is more balance than anything. Abundance doesn't mean spending every penny, nor does it mean hoarding and living like you have nothing. Scarcity to me has too much tension in it for me to want to use that as a word to describe my budget even though that is where I am living, and have been living for the majority of my adult life. It triggers a bit of panic, which can cause me to make decisions much more impulsively than I might if I were thinking more clearly and not the throes of anxiety.

      I'm glad that the concept works for you, it simply wouldn't work for me!

      Reply Like
      • jenmas
      • jenmas
      • 3 mths ago
      • 2
      • Reported - view

      farfromtheusual I hear what you are saying. I have a rental property. It's a self-contained budget and I allocate funds to a maintenance category every month. So when I have to fix things after storm damage I'm able to do it without a thought not because I have a scarcity mindset, but because I assume that things need to be fixed so I budgeted for it.

      Reply Like 2
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 3 mths ago
      • 2
      • Reported - view

      farfromtheusual The use of "scarcity" has been part of the YNAB lexicon for as long as I can remember.

      In some cases, it's a self-imposed, artificial scarcity, and that does not connote negativity. In fact, that is what has allowed us to be successful, and put our money toward our priorities.

      Before YNAB, our budget was "we can put $XXXX on the credit card every month, and that means we're not overspending, because that's what we can pay off. What we spent the money on didn't matter. But with YNAB, it has allowed us to control/decrease our spending in areas we don't want to spend the money in as much, which allows us to increase the spending in areas of more importance.

      You don't want to know how much money we dropped on furniture last weekend. I keep shocking myself at the total amount. But it was all budgeted for.

      Reply Like 2
      • MsTJ
      • Gray_Nomad_f6eeb59e1a1c
      • 3 mths ago
      • 2
      • Reported - view

      farfromtheusual Yes, I have also lived a life of scarcity for a very long time.  Before YNAB, that was all there was.  Since YNAB, as jenmas  said, I budget for many of the things that can come up, every month, even when they don't.  That means when they finally hit, there is something put aside for them.  Maybe I will have enough put aside when they hit, maybe I won't.  The thing is, I have something put aside.  For me, that is one of the wonders of a budget.  I started with only a few dollars in each category, and every month, I add a few more.  Give it a few years, and I have a better chance of having enough.  

      My goal is peace of mind.  That is why I save with urgency.  To me, saving with urgency means keeping my monthly spending as low as possible, so I have more peace of mind regarding when that next bump in my road happens.  For me, scarcity leads to peace of mind.

      Hope you find the right words to fire you up.  For me, it has been worth it. 

      Reply Like 2
  • It's funny, I discovered YNAB in the Fall of 2009, because I was 7 months pregnant with my third, had crappy medical insurance with a huge deductible yet to fulfill, and credit card debt with other various upcoming expenses.  I knew I needed to get a handle on things so we could add this third kid comfortably. 

    When I first started filling out the budget with an income much smaller than it is today, I was horrified by how little we could afford.  I cut eating out down to $50, groceries to about $300, if I remember correctly.  HOWEVER, within a couple of short weeks I felt RICH!!  Because as we all know, even spending $20 at the drug store was budgeted for and I could pay the credit card!

    Of course, I've also been "YNAB broke" more often than not (with much more available funds), but I'll never forget that initial feeling of RICH when I bought some lipstick and stopped for a sub sandwich on the way home :D.

    Reply Like 6
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