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As much as I talk about budgeting, it’s time that I introduce you to the best budgeting tool available! It’s called YNAB (which stands for You Need A Budget). My family discovered YNAB around four years ago and I’ve been obsessed ever since! There are lots of budgeting products available, but YNAB is the only one I know that seamlessly syncs your budget and your bank accounts and provides you with all the tools needed to be successful at budgeting.
YNAB is so easy to use! Just take a look at this screenshot. You have all of your accounts and reports on the left panel. On the right, you’ll see an overview of your money and where it needs to go. If you want to see a specific category, just click on that category and it will show you the details! In the middle is where the money is, literally. This is where you’ll give all those dollars a job. Up top, you’ll see the month, how much money you have available to budget (when you’re done budgeting, this number should be $0.00), and the age of your money, which is important for rule #4.
1. Bank Syncing
Connect all your bank accounts in one place.
2. On the Go
YNAB has an app for iOS and Android so you can always check and update your budget on the go.
3. Debt Paydown
Put all of your debts in one place and YNAB will help you figure out what to pay each month to start seeing those balances go down.
4. Goal Tracking
YNAB helps you meet your money goals by integrating a goal tracking tool right into your budget.
Track your spending habits over several months to see where you’re doing well and where you can still improve.
6. Personal Support
YNAB’s amazing support team are there to help whenever you need it! Just send an email or join a live workshop.
1. Give every dollar a job
The first and most important step to creating a budget is to tell your money where to go. Every single dollar you bring into your house has a job to do, and it’s your responsibility to tell it what that job is. If you don’t, then your dollars might start doing things you didn’t really plan for them to do (and not doing the things you need them to do). The next time you get paid, before you spend even one penny, sit down and decide what those dollars need to do before you get paid again.
2. Embrace your true expenses
Remember that time when your car insurance was due but you couldn’t afford it? Well, not with this rule! YNAB has built-in goal setting tools so that you’re never unprepared again. If your insurance is $600 and it’s due every 6 months, then set a goal to save $100 each month. YNAB will remind you and when your bill comes, you’ll just pay it. Whew, wasn’t that easy?!
3. Roll with the punches
Even the best-laid plans sometimes don’t work out perfectly. When you have an expense you didn’t plan for or you overspend in one category, don’t sweat it. Just move some money around to cover the costs and keep on spending based on your adjusted budget. Next month you’ll have a better idea of what you should really budget in each category.
4. Age your money
This is the rule that literally changed our lives. We no longer live paycheck to paycheck! You need to start living off of last months income as soon as possible! In our family, the money we’re earning today won’t get touched until at least a month from now, maybe longer. How’s that for reducing stress? It’s basically a built-in safety net! Let’s say for some reason our paycheck doesn’t come when it’s supposed to or one of us unexpectedly loses our job. This rule right here will be the buffer that will help us make it through until we can figure out a plan. Now don’t get this confused with an emergency fund, you’ll need one of those too, but start here and work your way up. Before you know it you won’t remember the last time you stressed about money!
Our financial story
When Gilbert and I first married, neither of us had ever lived on our own, we had no savings, tons of student loans and other debt, and we hadn’t learned any good money habits from our parents. But we were determined to do the best we could.
Gilbert’s Dad passed away in 2013 and left us a decent little nest egg and a house, which gave us just the headstart we needed to start winning with money. Ok, so we ended up blowing through the entire inheritance, but we did pay off several small debts and we still had a house with super low taxes and no mortgage. We were in a pretty good spot.
Once we started using YNAB and learned rule 4, we quickly saved up to get us a month ahead on our expenses. We already had a $1,000 baby emergency fund (which we had learned from Dave Ramsey was Baby Step #1). Since that time, we’ve been putting as much money as we can towards our student loans.
In the last 5 years, we’ve paid off around $50,000+ in debt (while making an average of less than $60K a year), added two kids to our family (after 3 years of expensive fertility treatments – which we paid for with our savings), bought a house (and sold our first house), paid off our car loans, bought a car with cash, and we still pay all of our bills every month and do fun things together!
We aren’t rich and we still have some improvements we could make, but we’re doing alright for ourselves. And that has a lot to do with YNAB and the ways it has helped us learn how to manage our money effectively.
Change your financial story
You can take the first step to a better financial story, too! You don’t have to inherit a bunch of money or win the lottery, you just have to start making your money do what you want it to do.
The first step is easy. Sign up for YNAB free for 34 days. Once your free trial is over, subscribe using my referral link and you & I will both get another month free. That’s two free months of YNAB to get you started. Plus, after you subscribe, you’ll get a referral link too so you can spread the news about how awesome YNAB is and earn even more free months!
What do you have to lose? Sign up today and start seeing your financial story change for the better!