I <3 budgeting

I’ve been budgeting for about six months now and I fucking love it. My budget is the center of my entire life which sounds miserable but it’s actually the exact opposite.
My budget liberates me. It helps me first focus on the things that matter, which in turn allows me to spend money on superfluous fun things without any guilt. It makes me feel like Julie Andrews twirling in the alps in The Sound of Music.
Budgeting began when a co-worker of mine mentioned she had tried out new budgeting software, You Need A Budget (YNAB), and that it really worked for her. Having just received news that my car insurance was going to cost me $800 every six months, I figured it was worth trying out. I’ve been an evangelical supporter ever since.
YNAB is essentially a beautifully-presented, powerhouse spreadsheet. The program doesn’t do anything you can’t recreate in Excel, but vastly improves upon the user experience which means you actually stay engaged with your budget. Excel? Not sexy. YNAB? Kind of sexy.
ynab-spending chart
Note: not my actual bank account. I wish.
What really makes YNAB great, though, is that their software was built to match their four budgeting principles. All the functionality you need to stay on track is built in. For those curious, here are the principles:
  1. Every dollar has a job. Any money that comes in to your bank account automatically gets assigned a job, so you aren’t tempted to spend it on something else. You see where it goes, and can use historical trends (in the form of handy graphs and charts) to see if you need to add more to a category for that month, or can take a little out.
  2. Save for a rainy day. Budgets you don’t spend that month roll over automatically into the same category next month. It’s tremendously rewarding to see the money you’ve set aside for car maintenance grow every month, and that motivates you to keep adding to it.
  3. Roll with the punches. Maybe you’re in a fender bender and your car maintenance budget isn’t quite full enough to cover the costs. No big deal; it’s easy to reallocate budget from another category to cover car maintenance costs. In a real pinch, you can also take overspending out of next month’s income, too.
  4. Live on Last Month’s Income. This is an obvious goal for everyone– no one likes living paycheck-to-paycheck– but sticking with the YNAB system actually makes it happen.
In the six months I’ve been a YNABer, I’ve paid off an extra thousand dollars of my student loans, covered the cost of my ludicrously expensive car insurance without having a complete panic attack, and even booked a Christmas vacation to DC and New York.
I feel like I have more money now that I know what to do with it, and that’s awesome. There are some big ticket items I’ve got my eye on (namely, a new couch) and I’ve started saving for them already. Naptime on that couch is going to feel so much better knowing that it was an easy-breezy purchase.
But until then,
I’ll be right here.

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