How to get out of glorified expense tracking
Hi, I was reading the forum a few weeks ago and saw someone describe their early YNAB experience as "glorified expense tracking," and I really resonated with that. YNAB is really helping us keep our spending at least within our means which has not always happened but I'm having a hard time figuring out how to age our money or move beyond just tracking our expenses. Any one else have a break through moment or step that helped with this? Thanks in advance
For me it came down to using cash for a few months for all my discretionary categories and imposing the bigger picture on the impulsive me. I wish I had YNAB then. I had to use a month's worth of cash in labeled glass jars to visualize and limit my categories. I could move the funds around between jars, but I couldn't increase the total available for the entire group. Imposing the stop spending when you run out of funds in the category felt so alien in the beginning, but I would tell myself that it was only for a month. I could adjust the amount next month. And it worked.
I've come a long way since those labeled mason jars 12 years ago. Looking back, I think my biggest takeaway lesson was that I had to learn that going over by $5 was in fact a big deal. It affected another category or my goal in some way. If it wasn't a big deal to spend $5 more, it should be equally not a big deal to save that same $5. This set the groundwork for future success. (But I still have to watch my impulsive 'treat' spending like a hawk.)
It took me a long, long, long time using YNAB to use it to it's fullest potential. I never "got" the why of having a big fat ZERO in my TBB. I have been using YNAB for many years and just didn't buy into it.
But you know what? It works!! Putting that money into categories has been life changing for me. I thought it would be limiting, but with the nYNAB, you can move money if you have to. (I honestly cannot remember if you could do it with the old version, like I said, I did not use it to it's fullest)
It really makes you think about every penny before you spend it.
I also set goals for each bill every month. That way, I know that I have to fund those categories first. I was always behind on bills, floating a month and paying a little late charge. Not anymore! After this month, we will be completely caught up and ready for the next month with no late fees.
I cannot wait to be paying this month's bills on last month's income.
So, just do it. Start with this week's paycheck and get to zero. If you have already been tracking expenses, you have an idea of what you spend in each category. That is half the battle of budgeting, in my opinion.
Good work on keeping your spending managed! That's a much bigger deal than many people realize!
To take the next step with YNAB, I strongly suggested going through the YNAB tutorials, more specifically those about getting out of the paycheck-to-paycheck cycle and working towards goals:
Also, consider taking the time to do attend some of the YNAB workshops where you can get live demos of different topics and ask questions about things that you are confused or want more information about:
For me it was finding something I wanted more than I want that "new shiny thing" at the store. I started with things like saving for my annual expenses, then for when my car breaks down, medical expenses, then moved on to fun things I wanted, like replacing car, computer, phone, for cash. Then the choices on when to spend become a little harder.
I love this thread and I'm going to move it over to the Tips & Tricks discussion section to keep it going.
To add in here, one of my favorites Create a Budget Template Workshop (there's a blog post about it too: How To Create a Budget Template ). Both will teach you how to use scheduled transactions and goals to outline priorities and plan for those expenses! :)
I think the biggest line between expense tracking and budgeting is being reactive vs. proactive. In line with what a lot of others said above, giving each dollar a job is really important - planning things out ahead of time, rather than leaving money in To Be Budgeted or waiting until after spending has taken place to act, makes a huge difference.
Be glad that you now have the tracking data that you can use!
The hardest part for me in the beginning is that I was budgeting WAY under what was possible for me for certain categories. Groceries were a big one for me. Once I got a couple of months I was able to start budgeting a more reasonable amount in that category so I wasn't constantly feeling guilty when I overspent. I just needed to find a more doable number that I could stick with.
I certainly used YNAB as a glorified expense tracker for a long time. I started with YNAB Pro and was using it along side Quicken which is what I was used to using for "budgeting". I was frustrated because I felt like I was doing all the "right" things but I wasn't making progress like I wanted.
It wasn't until well into using YNAB 4, that I finally went. Well, what if I just went ahead a followed these "rules" these YNAB folks keep talking about. I took a huge gulp and I did a fresh start. The key step here is to write down the totals or amounts that you have in each account - not the categories, because this is about starting those categories over. However, doing a fresh start isn't necessary, I wanted one so I'd have a nice fresh slate going forward. I stared hard at each of my categories and decided if I wanted to keep it or change it.
Then...I followed the first rule....give every dollar a job! Right down to the penny. Put those pennies someplace in your budget and go down to $0.00. Critical to just focus on the money there now. Don't worry about the next paycheck that's coming. Get all the money you have right now into a category.
You need to feel comfortable that the money you have in the real-world is accurately reflected in YNAB.
Why? Because from this day forward, you will not go the bank’s website or app, to check how much money you have. You will go to your YNAB budget and say how much do I have in Groceries? In Gas? In Eating Out? In Clothing? etc. Focusing on the category balance and NOT YOUR BANK ACCOUNT AMOUNTS, is what will get you started on using YNAB as a budgeting tool rather than a different form of Quicken.
It took me about 3 months before I really felt like the money “in” YNAB matched the money I actually had across my accounts (checking, savings, and credit card accounts) and that trusting what YNAB was telling me was the truth! It is life changing! That might be a bit of hyperbole, but I really remember the feeling when I said wow, this is really working! I’ve got more money each month in these categories, I’m making progress on my savings, on paying off this stupid credit card, and on thinking about my “rainy day funds” or “true expenses”.
As you start entering every single transaction and assigning them to a category, you will begin to see the YNAB steps in play.
-Only budget what you have on hand. Don't budget future or upcoming paychecks.
-Budget down to $0 every time you get money, even if it's $5.83
-Record & Categorize every tranaction
-Focus on how much you have in the budget categories, not in the physical bank. When done right, they are exactly the same.
-It's perfectly ok to move money from one category to another category (roll with the punches). You are never going to be perfect, but you'll get better and better.
-Work on getting a month ahead. I still think in the YNAB4 terms of a buffer but this is the age your money step.
Goodness, sorry for the long-winded response. But this was the approach that finally turned me into a YNAB and budgeting fanatic!! Following the YNAB rules is the key to getting on the path.
I love budgeting, I love looking at my budget, I love testing my budget to see if I can make it better, I love setting up little challenges for myself to improve on a category... I'm just an overall budget nerd!