How YNAB Changed My Money Mindset

Update: On November 1, 2021 YNAB announced that they will be raising their prices from USD$11.99/mo to USD$14.99/mo ($84/yr to 99/yr). I understand that this price increase will make it inaccessible to many people, however the principles are the same whether you purchase to software or not.

In January of this year I decided to give You Need a Budget a try. I had seen it several times over the years but I just could not get rid of my beloved Excel spreadsheet budget.

Here’s the thing that I had to be honest with myself about, I was terrible at keeping up with my budget spreadsheet and I had been budgeting for years at this point, but I could never quite stick with the same budget long enough to see true progress. I also never remembered to track all of my expenses so, then I would give up halfway through the month.

For some reason that did not happen with YNAB. The going was rough in the beginning because I had to get used to the YNAB way of budgeting but now I absolutely love opening my budget every day!

My budget spreadsheets haven’t been 100% replaced but YNAB has kept me accountable in a way that my spreadsheets never have.

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The YNAB Philosophy

YNAB is governed by The Four Rules. In theory they are pretty simple, but it does take a while for your mindset to shift over to the YNAB way of thinking. You see, when I was using my Excel spreadsheet, I was budgeting my money before I had received it however, with the You Need a Budget software you budget your money only after it has hit your account.

Rule 1 – Give every dollar a job.

I you are familiar with budgeting then I’m sure that you’ve come across the zero-based budgeting system. Any inflow of cash needs to be allocated to one of your budgeting categories thus leaving your “To Be Budgeted” at ZERO. The area that I struggle with is sticking to the plan aka my budget. Of course, some months are better than others but in YNAB all of that moving around of money to cover overspending whether warranted or not really forced me to look at my spending habits. All too often I was taking from my savings to cover unnecessary expenses that I could have just saved up for because I did not need them right this moment #imarecoveringimpulsespender

Rule 2 – Embrace your true expenses.

This sounds fancier and more complex than it really is. Embracing your expenses consists of finding large, infrequent expenses such as Christmas and creating a goal to fund it monthly aka a sinking fund. I am absolutely in love with the goals feature and use it for almost everything even monthly recurring bills.

Rule 3 – Roll with the punches.

Be flexible and deal with overspending right away. I personally check-in with the budget everyday to make sure that I’m staying on track sometimes it’s unnecessary because I have spent money on anything, but I just like to double and triple check (is that bad?!). My take is, be kind with yourself, things happen, and plans change make the necessary adjustments and move on. Don’t forget that you’re in charge of your money and not the other way around.

Rule 4 – Age your Money.

This was a new term for me but not necessarily a new concept. Ageing your money is the key to becoming stress free. You want to get to a point where you are spending money that you earned in a previous pay period. In YNAB the goal is to age your money to 30 days, that is, using last month’s pay on this month’s expenses. Ageing money was a bit more complicated than I thought but it really just requires to be more focused and purposeful with your spending and always try to spend less that you earn.

Want to see what YNAB looks like? Come budget with me.

I recently started posting budgeting video on YouTube to keep me accountable. If you want to follow along on the journey and see my real numbers, feel free to check out the video below. Don’t forget to like and subscribe 😉

Final Thoughts

All in all, You Need a Budget had changed my relationship with money for the better. Of course, there are still a lot of areas that need work. For me that is, self control and earning more but YNAB allows me to confront that every single day instead of burying my head in the sand.

Another great thing about YNAB is the Reports tab which allows you to track things like your Age of Money, Net Worth and compare your income and expenses month over month. Honourable mention to the YNAB Toolkit extension which provides even more amazing functions to an already awesome app.

I don’t plan to get rid of My budget spreadsheets completely but YNAB has kept me accountable in a way that my spreadsheets never have. I would 10/10 recommend YNAB to the person who it overwhelmed with their finances and want’s to get a realistic picture of their financial situation but I also see tons of people who are “winning with money” using the software too so I know that it has something for everyone.

If you want to try out YNAB use my referral link for a 34 day free trial and if you like it as much as I do you’ll get another 30 days free!

What’s your favourite budgeting tool? Let me know in the comments below!

Photo by Sharon McCutcheon on Unsplash

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