This post is extrapolated from a set of tweets I made on 7/5/2020, which I decided to save and expand upon here because goddamn is twitter lousy for organizing, searching, or archiving tweets. If you are just here to find out more about the YouNeedABudget app, jump down to the second section!
The Backstory
I have, historically, not had a good relationship with money, and a worse one with tracking/accounting for/being responsible about my money. So many reasons why! Yet I have tried, over and over again, to get better.
Quicken. Envelopes. Mint. Excel (a repeat offender). Any number of now-departed online personal budgeting apps and services.
Fail, fail, fail!
It’s not like I did not have a grasp of the theory: take the money you have and match it to the money you spend, save what’s left over. This is not rocket science! Not even close!
To be fair to myself, one reason these attempts often fell short was not because the system I was using was difficult or that I wasn’t using it, but that I simply was not making enough money to pay the bills. Poverty is a bitch, y’all, and when every month is a rolling festival of robbing Peter to pay Paul, budgeting is a joke.
I still remember the day I read a blog about frugality where they were hammering the point that tracking and planning your budget is important, only for all of their examples of “frugality” to be 2x more money than I actually made. I realized: the secret to not being poor is to have more money.
You can’t save what you never had. Pinch pennies all you like but if the combination of rent, utilities, and car fuel/upkeep outstrip your income, doesn’t matter how many coupons you cut.
Of course, having more money is not so easy, not in this modern world. So while I focused on working towards that goal (which took many years), I gave up on budgeting. It felt pointless to quantify how far in the hole I was going every month.
So yeah: the secret to not being poor is to have more money.
…but then what?
Once you do have some money (hurrah!!!!), and you aren’t quite poor anymore…then what?
Cautionary tale:
When, for the first time in my adult life, I got a job where I was making significant money, I wasted it. Threw it away. It’s awful to talk about it now and it fills me with shame, but my marriage was already crumbling by that point and we had lived so, so many years hungry and desperate that when the windfall came we just spent it. Not on luxuries like jewelry or designer clothes or vacation destinations, but simply on living: groceries, good clothes, nice shoes, a used truck (for the ex), dining out (our largest expense by far), and some cheap household furnishings.
What we did not do was budget, or save.
Then that job evaporated without warning and we were back on the poverty treadmill.
(At least we had nice, sturdy, long lasting shoes for a while!)
It was a hard, hard lesson to learn and to be honest I did not learn it well. Worse, my next decent job did not happen again for over five long, struggling years. When it did happen I spent the first two years just catching up on “the cost of living” and enjoying not being on the edge of not being homeless again. Then a few years of coasting. I don’t feel too guilty about that because I was also paying for therapy to help me process the years of poverty and grief and trauma I had suffered for nearly 20 years straight. Priorities, amirite?
But I knew I was coasting, so a few years ago I started using the savings app digit.co (which I recommend!) to painlessly build a savings. Believe me, I was grateful for that when Keely had that major health scare last year. Vet bills wiped out the $3k I had saved, and I still needed a gofundme to cover the rest. I’m glad I had it, because otherwise Keely would not be here today. But still. It hurt.
And then 2020 happened.
Five years into my “real job” and of course that’s when the whole wide world hits the damn fan. Overall, I’m very fortunate. I’m doing okay, I still have my job, and Keely’s health is holding steady.
However, it made me take a hard look at my goals and how I want to live, and what I need to feel secure and safe. Those are not things I could (literally) afford to do when I was living in poverty, but now? Now I can do it.
Not all those factors lined up to be fixed all at once, but I know they can be fixed if I plan accordingly. I am making enough, now — I have more money.
It was time to try budgeting again.
Lowdown on YNAB
Tl;dr – I have saved a significant amount of money (for me) and now have a buffer in savings equal to 3 months emergency living expenses thanks to using the budgeting service YouNeedABuget (YNAB), but it definitely has a learning curve to it and requires you to change how you think about your “in the bank” money.
I really liked the concept of YNAB, so after reviewing my options, I dove head-first into buying a subscription and setting it up.
I followed up that stellar initiative by not using it for nearly a year. Oops?
There were a variety of reasons for this, but the primary one is that I assumed that with the right tool, budgeting would be easy. So easy!!!!!
…I am sad to inform you that this is not the case.
To wit, this is the most important part of this essay: budgeting is a skill that takes time and effort to master, and whichever tool you use to track/plan your budget will have its own learning curve.
I had to learn how to use YNAB to use it effectively, which is not something I spent time on at first, or at second, or even at third. Disappointed that budgeting was not, in fact, easy, I bailed several times until I realized that maybe the actual problem was me.
So, I took time to watch how-to vids and jigger my budget template, and while the concepts that powers YNAB are fairly simple, if you are used to living paycheck-to-paycheck and juggling funds in bank accounts to get by, it requires a significant change in your mindset.
In the end, I think it took me three months to really adjust to using YNAB. I’m still learning things about it, and I still change things to better suit my preferences as I go along. It is not a one-size-fits-all solution, which is why it is so powerful but also takes time to dial in.
Interested? Here are my tips to getting started budgeting with YNAB, which might actually be general enough to apply to any budget app/system honestly:
- Expect a learning curve. I re-started with YNAB for the fourth time in January but did not really use it until March. Even then it took a couple of months for me to grok it fully. You have to learn to trust yourself and YNAB a little in order to embrace their 4 Rules.
- Stop looking at your bank balance once you have your YNAB budget set up. Those numbers mean nothing, the only thing that matters is your budget. This was hard for me, as someone who was used to living paycheck to paycheck for decades, but it has PAID OFF (literally!).
- Watch how-to vids! Kinda doubling up on this advice but it’s worth repeating. I dearly love the whole “Heard it from Hannah” playlist (also she’s kinda cute????) but highly recommend starting with THIS vid specifically: https://youtu.be/BjcYySRKc1A
- Don’t do it all at once! The desire to “get ahead” is real, I know, but trying to fund a savings account, pay off credit cards, and get three months ahead on bills all at the same time is nearly impossible if you aren’t making much bank. Choose the one thing that gives you peace of mind and do that FIRST, then tackle the rest.
- “Groceries” as a category is tricky, and you will have to experiment with it. Planning and tracking for groceries were my WORST problems. YNAB focuses on monthly budgeting, but I have to shop once or twice a week, so it kept defeating me. This blog post changed everything: https://www.youneedabudget.com/next-level-ynabing-category-groups-and-groceries/
- Level up: If you want to learn more advanced ways to use the system, I recommend Nick True’s channel, Mapped out Money, which deals with things like credit and loans and investments and lifestyle in YNAB.
- Get the ToolKit extension: There is a browser extension for YNAB that is really good. Nick True has a thorough vid on how to use it, but it’s not too complicated and has great features! https://www.toolkitforynab.com
That’s my advice, all won the hard way! It paid off for me, though. I don’t make a lot of money, so getting to the point of having $ in the bank to rely on was tough and I had to tweak a lot of things (like eating out less, omg). Instead of constantly falling behind or raiding “savings” I now have a three month buffer saved up.
My next goal is to officially get a full month ahead on bills in the budget (right now I’m about, eh, a half a month ahead). My next couple of goals after that are to get three months ahead on bills and $10k in savings. I think, all things being equal and assuming I don’t win the lottery in the meantime, I can do both in 2021.
I used to have anxiety attacks just thinking about trying to budget. But now it is true to say that investing my time into learning YNAB has changed me from a budgeting coward to someone who lives and dies by my budget, and that, in the end, is contributing a lot to my mental and emotional wellbeing.