Contrary to what you may believe, I’m not terrible with money.
I mean, I’m not great at it.
But I’m not terrible at it, either.
I struggle with the things that most people do: spending less, saving more, figuring out ways to earn more. I automate what I can, pay off my bills in full every month, and try to squirrel the rest away for a rainy day. You know, the basic tenets of personal finance.
But it’s hard.
I live in a city with a ridiculously high cost of living, but I also am fortunate to make a good salary. I have a roof over my head, clothes in my closet, food in my pantry, money to send home, and all that stuff that so many people in the world don’t have. But, partially due to the high cost of living and also because I like nice things and to have fun, I don’t save as much as I should — or could, even.
I tried keeping track of my expenses in an Excel spreadsheet, but I kept on forgetting to update it on a regular basis. Then I tried Mint, but I didn’t like that I had to keep re-categorizing my purchases. Then I heard about You Need a Budget (YNAB), so I gave the 34-day trial a whirl. By Day 10, I was already hooked.
I’ve been using YNAB for a year now, and it’s safe to say that I’ll be sticking with it as my preferred method of tracking my spending, budgeting, and generally staying on top of my finances. I like that it:
- has an excellent web interface and phone app, so I can track my expenses in real time and see what money I have at any given moment no matter where I am;
- gives me the option to direct import from my bank;
- allows me to “give every dollar a job”, even if that job is “put directly into savings and not touch it”;
- sets up one-off expenses (e.g. annual renter’s insurance payment) as something to save for throughout the year;
- can move budgeted funds easily between categories to adapt to unexpected or changed plans;
- automatically carries over or deducts money from last month’s categories to the next;
- can create multiple budgets in the same account, which makes budgeting for specific situations (e.g. vacation) much easier; and
- tells me the “age” of my money, encouraging the breaking of the paycheck-to-paycheck cycle.
My YNAB dashboard tells me how much I’ve got in my checking and savings accounts, plus how much I’ve charged to my credit cards. I can see where I am in making progress towards reaching my savings goals, how much money I have available in my budget for the month, and how much money I have at any given time, after deducting any debts or outstanding payments.
YNAB changed my relationship with my money. Prior to using it, I had a general idea of what my finances looked like, and felt that that was enough. But wasn’t enough, really, and YNAB taught me that. I may still need to work on my spending habits in general, but YNAB definitely helps frame, in no uncertain terms, the black-and-white rationale for whether or not I “need” to buy X or Y or Z. I stopped using YNAB for a few months earlier this year for various reasons (mainly laziness and the knowledge that I wasn’t being as wise as I should have been with my money, if I’m honest) and my finances suffered for it. Now that I’ve been back on track for a bit, things are looking better and better.
The only downside is that YNAB costs $5 a month or $50 a year. However, there is that 34 day free trial, and with my affiliate link new users get $6 off the purchase (full disclosure: I get $6, too). I’m confident in stating that my $50 a year subscription is money well spent. There’s even a line for it in my budget 😉