|
I need help goons! My financial situation is pretty crappy and we are about to get a new house, rented from the council, so need to get budgeting. I looked at ynab but it's complicated as my partner gets paid weekly and the amount changes on her hours which change weekly too. Benefits are paid both weekly and biweekly. Is there anything that will help other than my outgoings and Income spreadsheet?
|
#
?
Jan 29, 2014 16:39
|
|
|
|
| # ? May 12, 2024 20:10 |
|
|
thegasman2000 posted:I need help goons! First, start tracking expenses with Mint.com, find out where all your money goes and categorize those things. You could do percentage budgeting on a spreadsheet or with a ledger/notebook and calculator. This is what Phantom of the Copier recommends. For every $100, decide how each dollar will be spent. Like, $20 to savings (retirement), $30 to fun (beer and long term big purchases like vacations), $50 to bills. (extend this to every dollar of income as percentages. So 20% savings, 30% fun, 50% bills) So if your partner gets paid $500 this week, you'd put 100 in savings, reserve 150 for discretionary purchases, and 250 for all your bills. You can set this up with literal envelopes or jars, multiple bank accounts accounts from/to which you transfer money, or just lines in a notebook. You can also use YNAB which will simulate virtual envelopes. Mint will help you figure out your expenses from the past few months and show you averages from which you can fill out the lines of your budget. The first month or so will be pretty haggard, but irregular and changing pays should have no impact on the effectiveness of sound budgeting practices, regardless of software. In fact, if you successfully produce a buffer equal to the sum of all of your monthly expenses (live a month ahead), then the amount or regularity of your paycheques won't really matter anymore and you'll be able to reduce a lot of the stress of financial management. Some goals you should work toward: saving an emergency fund ($1000 is a nice round starting figure) saving a one-month expense buffer expanding your emergency fund to six months of expenses saving for nice stuff like TVs and vacations funding your retirement
|
|
#
?
Jan 29, 2014 17:01
|
|
|
Thanks for that. I think ynab is too unwieldy for me at the moment and jars will work great. I can use a credit card for online payments and have a credit card payment jar to keep stuff organised. My main issue with ynab is a negative starting balance, due to the time of the week we get paid, and the complication of transfers... I tried adding a weekly and bi weekly one covering incomes but it still says February is over budgeted... Meh jars are easier. Cash burns a hole in my pocket but the mrs is pretty good with it all. Oh and for UK goons Mint is useless but moneydashboard.com works great at tracking spending. That alone is going to help me out. thegasman2000 fucked around with this message at 17:37 on Jan 29, 2014 |
|
#
?
Jan 29, 2014 17:35
|
|
|
thegasman2000 posted:Thanks for that. I think ynab is too unwieldy for me at the moment and jars will work great. I can use a credit card for online payments and have a credit card payment jar to keep stuff organised. My main issue with ynab is a negative starting balance, due to the time of the week we get paid, and the complication of transfers... I tried adding a weekly and bi weekly one covering incomes but it still says February is over budgeted... Meh jars are easier. Cash burns a hole in my pocket but the mrs is pretty good with it all. If you're really interested in YNAB for some reason, or you try some other methods and don't like them, the intro videos and webinars for YNAB are excellent and clear up its weirdness and methodology. It's clearly worth the effort for a lot of people in this thread and I personally* can't recommend it enough. But it's not a panacea. If you're using it correctly, a negative starting balance in YNAB can mean that you're spending money that you don't have, which can quickly lead to debt. If it's just budget line items that are generating a negative balance (say you're planning 1000 for rent due on the 15th and budget it on the tenth before you get paid) then you're not using the program correctly because you're planning to spend money that you don't yet have. Wait until the pay comes in and parcel out the money based on obligations and goals. * Been using it for a year, paid off ~60k in debt in 2.5 years. Have absolutely no conflicts with my shared-finances partner over money.
|
|
#
?
Jan 29, 2014 17:49
|
|
|
I've been interested in trying YNAB for awhile now, but I've been using Mint for the past two years. I may be overlooking something completely obvious, but is there any way to more easily move information from one to another?
SoleilEquil fucked around with this message at 18:05 on Jan 29, 2014 |
|
#
?
Jan 29, 2014 18:03
|
|
|
SoleilEquil posted:I've been interested in trying YNAB for awhile now, but I've been using Mint for the past two years. I may be overlooking something completely obvious, but is there any way to more easily move information from one to another? No, a big part of YNAB is manual entry to build consciousness and letting the past go.
|
|
#
?
Jan 29, 2014 18:09
|
|
|
thegasman2000 posted:I need help goons! I'm paid weekly on an hourly basis myself: the only difference it makes to me is that money ends up in my account sooner than if I were monthly paid. Just have to manually record how much I've made every payday, rather than scheduling a fixed amount of income per month - but it takes a few minutes each week, tops. thegasman2000 posted:Thanks for that. I think ynab is too unwieldy for me at the moment and jars will work great. I can use a credit card for online payments and have a credit card payment jar to keep stuff organised. My main issue with ynab is a negative starting balance, due to the time of the week we get paid, and the complication of transfers... I tried adding a weekly and bi weekly one covering incomes but it still says February is over budgeted... Meh jars are easier. Cash burns a hole in my pocket but the mrs is pretty good with it all. YNAB works just like the jar system: your money goes into a single pile called 'income for February', which you then get to funnel into categories as needed. You then take it out later when you have enough in the category for what you want, and receive delicious dopamine brain chemicals as a bonus for being good. If you have (for example) £250 in the bank, naturally that won't cover a whole month's worth of rent/mortgage payments, your food shopping, your monthly bills, and putting some savings away. All you can do is roll with what you do have as best as you can: create an account in YNAB, with the 'starting balance' being what's in your bank account. Then, work out what your next bill is going to be, and put some money into a category to cover it - and when you pay the bill, record it as going out of your bank. The idea is that you carry on like this, until your 'available to budget' value drops to £0 and you can't budget any more. That way your bank balance isn't touched at all, but you've given the money that you do have in your account, right now, a job; so, when a bill comes in or if you nip to Sainsburys, the money is there and ready to be used. This should hold you over until you're next paid - enter the income into your account in YNAB when you're paid, and then start giving that money a job again. That way you're filling up the jars for the money you need to spend right now, and then putting a little into the other jars for bills that are coming up. So, for instance, starting from today your council tax is due on the first, and you'll need to fill up the cupboards later this week: put enough into 'food' and 'council tax' categories to cover these. If there's anything left from what you have already, put it into the 'phone bill' category. Next time you're paid, you can refill the 'food' category and put some into 'gas bill' and 'insurance bill'. Next time, 'food', 'petrol', and then there's enough to go into 'wife's birthday gift', 'car insurance', and so on and so on. If you're tracking your spending already, that's great - you'll know roughly how much you'll need to put aside for bills, rather than guesstimating. All this does is tell you what you spent, though: will you have enough left to last you until next month? Or for the wife's birthday in a few months? er... ...I'm effortposting. How to start out in YNAB, ladies and gentlemen. Excuse me 
|
|
#
?
Jan 29, 2014 20:10
|
|
|
spincube posted:Awesome stuff on YNAB.... Thanks for this, it makes it much clearer. I want to get to the stage where we can save but thats not happening anywhen soon. We live in hope 
|
|
#
?
Jan 29, 2014 20:22
|
|
|
No prob. The joy I found with YNAB is that it doesn't matter precisely how much I had in the 'food' category for the month, as long as the next trip to the shop could be paid for until payday; and likewise, there's no sense in putting money aside in the budget for a holiday next year if you can't make the rent payment next week. I honestly think there should be a vague alert in YNAB when you first create an account: if you're starting out, don't bother budgeting for a whole month if you don't have a month's worth of cash in your bank. To Twitter!...
|
|
#
?
Jan 29, 2014 21:14
|
|
|
They prompt you to take a class when you install, but I think that's kinda intimidating -- they should maybe autoplay the 4 Rules video or something.
|
|
#
?
Jan 29, 2014 23:15
|
|
|
spincube posted:No prob. The joy I found with YNAB is that it doesn't matter precisely how much I had in the 'food' category for the month, as long as the next trip to the shop could be paid for until payday; and likewise, there's no sense in putting money aside in the budget for a holiday next year if you can't make the rent payment next week. They do talk about that in this article http://www.youneedabudget.com/support/article/forecast-in-ynab
|
|
#
?
Jan 29, 2014 23:19
|
|
|
spincube posted:No prob. The joy I found with YNAB is that it doesn't matter precisely how much I had in the 'food' category for the month, as long as the next trip to the shop could be paid for until payday; and likewise, there's no sense in putting money aside in the budget for a holiday next year if you can't make the rent payment next week. Suppose you average $1000/mo net income (that's $230.76/wk, e.g. paid Fridays), and you need $600/mo for rent, $200/mo for food, and $240/yr for gifts. At the most basic you could budget 60% (yeah, this is a contrived example, can you tell?), 20%, and 2%. pre:Account Balances Date Rent Food Gifts Savings 1/1 0 0 0 50 1/3 138.45 46.15 4.62 91.54 Paycheck (230.76) 1/10 276.90 92.30 9.24 133.08 Paycheck (230.76) 1/12 276.90 -7.70 9.24 133.08 Grocery (-100.00) 1/17 415.35 38.45 13.86 174.62 Paycheck (230.76) 1/24 553.80 84.60 18.48 216.16 Paycheck (230.76) 1/31 692.25 130.75 23.10 257.70 Paycheck (230.76) 2/1 92.25 130.75 23.10 257.70 Rent (-600.00) You might also look at this and say, "Woohoo, I have $92.25 left over in rent at the end of the month. Free toys!". Let's say you do that and we'll find out what happens: pre:Account Balances Date Rent 2/1 92.25 Rent (-600.00) 2/2 0.00 Pilfering/toys 2/7 138.45 Paycheck (230.76) 2/14 276.90 Paycheck (230.76) 2/21 415.35 Paycheck (230.76) 2/28 553.80 Paycheck (230.76) (Disclaimer: We got lucky. There are five Fridays in January 2014. We would have needed a 'starter buffer' of $46.20 had this been 2013.) Envelopes, spreadsheets, ledgers, web applications... they are all the same in that they should be raising your awareness of your savings goals. When it becomes painful for you to take money out of your "book savings" to go buy liquor, then you've figured it out.  For variable incomes, try to start with the bare minimum and budget from there. The percentage budget helps because it always ensures that your money goes toward your established goals, and everything will be working slowly ahead at all times. (It's also considerably 'harder', psychologically, to pilfer accounts that only have a 10-15% buffer, because there usually won't be a spare $500 lying around.) When you find that accounts are consistently dropping into the $0 to negative-  area, you need to ask why you're overspending or if you need to rebalance your budget a little bit.In any case, this is all nice but you really need to start by paying bills, restricting most extras, get a little bill payment buffer, and then all these games will seem a whole lot easier. edit: auto insurance parenthetical PhantomOfTheCopier fucked around with this message at 04:44 on Jan 30, 2014 |
|
#
?
Jan 30, 2014 01:41
|
|
|
How should I budget for my next car? This current one that I just paid off last month is almost four years old (with 153 000 kilometers  ). I think I can expect another 2-4 years out of it at least. I have a pretty good idea what the next car I'll want to buy is. Like, a used 2014 that will be purchased in 2016-17. Is there any way to calculate what one of those currently-new cars will cost in two or three years so that I can amortize the payments and figure out if it fits in the budget? The big project is separating long-term savings goals (5+ years) from short term goals so we know where to hold the money.
|
|
#
?
Feb 2, 2014 16:21
|
|
|
I think you could get a pretty good idea by looking at what a 2-3 year old car, that is similar to what you want, costs now and base the number on that.
|
|
#
?
Feb 2, 2014 17:04
|
|
|
tuyop posted:How should I budget for my next car? This current one that I just paid off last month is almost four years old (with 153 000 kilometers I misunderstood the question. Edit: Just take about 30% off the cost of the new car and use that figure. It should be pretty close to that when a car is 2-3 years old.
|
|
#
?
Feb 2, 2014 17:15
|
|
|
Start setting aside as much money every month as you think/expect the monthly rate to be, and build up a reserve to be used as deposit. If you have spare money in other categories that aren't life dependent, consider moving part or all of it into that new car category (either now or close to buying it). Once you bought the car, continue using that or a new category for the payments. Unless you saved enough to pay it all at once. Personally, I went with this way, in YNAB: Saved up money in a savings category, close to buying it, created an off-budget virtual debt account from which I transferred the credit amount straight into that category, paid for the car, and am now budgeting the monthy rates, which I'll transfer back into that virtual account. Behind the scenes, my parents lent me the money at no interest, thinking themselves of being Richie Riches after selling their house, and the transfers to the virtual account essentially mirrors paying them off. The virtual account also happens to let me track remaining debt. I figure with an interest loan, you transfer the net amount into the budget and the calculated interest into off-budget nirvana.
|
|
#
?
Feb 2, 2014 17:16
|
|
|
tuyop posted:How should I budget for my next car? This current one that I just paid off last month is almost four years old (with 153 000 kilometers This is why I'm an advocate of more categories, not fewer. It forces you to realize some of your savings goals, even if they are seemingly minor, but it divides your money so that it becomes more difficult for you to spend it on other things. An "automobile" category might contain money for gasoline, oil changes, car washes, tire replacement, and other maintenance and things, but that provides a lot of opportunity to slide money toward higher-priced gasoline without realizing how much you're (not) saving for maintenance. Anecdote: My budget allocates for gasoline, insurance, maintenance, registration, and tires. For the longest time, I only saved 60% toward the tire "goal" because that's really all I could afford, but now that money looks like tires. If I have a major vehicular emergency, I can always pool all that money, but that's the way emergencies go. In the meantime, tire savings serves as a buffer for all those automobile accounts (so who cares if my "registration" category goes to -$2), and can even serve as a small loan for other things. Likewise, I can treat my vehicle better and get a little bit more life out of it until I have the money saved for the next big purchase. Regarding holding money for savings plans, nothing requires you to consider a medium or long-term investment as just "generic savings". Were one to put $500 in a viable CD, for instance, one could record it as "$200 rent, $100 fuel, $100 food".  (Yes, my tire savings earns interests of its own, as do all the other accounts aforementioned.)
|
|
#
?
Feb 2, 2014 18:59
|
|
|
Combat Pretzel posted:Start setting aside as much money every month as you think/expect the monthly rate to be, and build up a reserve to be used as deposit. If you have spare money in other categories that aren't life dependent, consider moving part or all of it into that new car category (either now or close to buying it). Once you bought the car, continue using that or a new category for the payments. Unless you saved enough to pay it all at once. Get a car loan again? Hahahaha! I have been considering just saving the old payment amount until I need it, so it's like the car payment never stopped but now it makes me more wealthy, in a way!
|
|
#
?
Feb 2, 2014 21:27
|
|
|
That's what I'm doing now that I've paid off my car this month. Gonna take that and the amount I'm gonna save on insurance and sock it away in a car fund.
|
|
#
?
Feb 3, 2014 01:31
|
|
|
tuyop posted:Get a car loan again? Hahahaha!  Had half of it saved up already, so it's not that big of a loan.
|
|
#
?
Feb 3, 2014 13:41
|
|
|
tuyop posted:Get a car loan again? Hahahaha!
|
|
#
?
Feb 4, 2014 00:38
|
|
|
Has anything emerged that is better than Mint at this point? Also I'm a Mac user, if that matters at all.
|
|
#
?
Feb 9, 2014 14:07
|
|
|
Argali posted:Has anything emerged that is better than Mint at this point? Also I'm a Mac user, if that matters at all.
|
|
#
?
Feb 9, 2014 17:55
|
|
|
tuyop posted:No, a big part of YNAB is manual entry to build consciousness and letting the past go. Does this mean that every transaction has to be manually entered? There's no automatic updates like Mint? That sounds pretty... time-consuming if you have multiple accounts.
|
|
#
?
Feb 10, 2014 19:50
|
|
|
Henrik Zetterberg posted:Does this mean that every transaction has to be manually entered? There's no automatic updates like Mint? That sounds pretty... time-consuming if you have multiple accounts. It takes like 10 seconds tops when you make a purchase. And you're not really supposed to go back and add previous expenses, since that's not what it's for. Edit: There is a feature to have recurring bills automatically post (like $8.28 for Netflix on the xth day of every month).
|
|
#
?
Feb 10, 2014 20:06
|
|
|
Cranbe posted:It takes like 10 seconds tops when you make a purchase. I don't need it to add past transactions really, just future ones. I've got money moving to/from multiple bank accounts, credit cards, 401k, stock, normal bills that aren't the same amount every month, etc. It would be a bit cumbersome to have to enter everything manually unless I'm missing something. vv: I get it, I'm just trying to get a better understanding of YNAB and if it's right for me, which it sounds like it may not be. Henrik Zetterberg fucked around with this message at 21:33 on Feb 10, 2014 |
|
#
?
Feb 10, 2014 21:25
|
|
|
Well part of the point of YNAB is to do it all manually so you're more cognizant of your finances. If that's not for you that is OK, YNAB is not for you.
|
|
#
?
Feb 10, 2014 21:30
|
|
|
Henrik Zetterberg posted:I don't need it to add past transactions really, just future ones. I've got money moving to/from multiple bank accounts, credit cards, 401k, stock, normal bills that aren't the same amount every month, etc. It would be a bit cumbersome to have to enter everything manually unless I'm missing something. Then it might not be for you. Really though, entering transactions is as fast and easy as it can probably be. I was skeptical at first, and after a couple days it didn't bother me at all. And I have three bank accounts, two credit cards (paid off every month), and a retirement account. The real reason the program is designed that way is to keep you honest about what you spend as soon as you spend it (or better, before you spend it).
|
|
#
?
Feb 10, 2014 21:34
|
|
|
I think I'll give the free trial a shot and see how it goes. Thanks for the responses so far.
|
|
#
?
Feb 10, 2014 21:38
|
|
|
Henrik Zetterberg posted:I think I'll give the free trial a shot and see how it goes. Thanks for the responses so far. When I started using YNAB I was actively using about 16 accounts a month and it didn't really seem that big of a deal to enter transactions manually. The program did help me analyze that administrative overhead and I've brought the active accounts down to three if you include cash.
|
|
#
?
Feb 10, 2014 22:18
|
|
|
YNAB does bank imports, you just have to log on to your bank website. I am pretty on top of my YNAB updating, so its really not hard to just auto-download into Quicken, and then put the two programs side-by-side and manually add to YNAB. However, if I skip updating for 7-14 days (happened maybe twice in 5 months) I can download everything from my bank's site. I had the same experience as Tuyop, manually entering has definitely made me more conscious of all the accounts I track. Thought I track more accounts than he does, and I plan to indefinitely. I don't have to log on to check a few of the accounts that I track as they only get quarterly interest adjustments. I have considered starting to track it monthly, but..so lazy..Quicken tracks it daily for me anyway!
|
|
#
?
Feb 10, 2014 22:25
|
|
|
Henrik Zetterberg posted:Does this mean that every transaction has to be manually entered? There's no automatic updates like Mint? That sounds pretty... time-consuming if you have multiple accounts. Like Sigma_X said, YNAB can ingest several types of financial data. I download QFX files from my bank twice a week (Tuesdays and Fridays) and reconcile, and from my other accounts monthly. I have the YNAB application on my phone, but even entering transactions in that is frequently (but not always!) more overhead than I have time for when I'm not home. I *do* open the app to remind myself what my approximate budget in this category is for the next few days (from Tuesday to Friday, or vice versa) so my budget is in the forefront of my mind, but I only enter what is convenient for me, and let the next QFX download catch the rest. Kenny Rogers fucked around with this message at 22:59 on Feb 10, 2014 |
|
#
?
Feb 10, 2014 22:56
|
|
|
Kenny Rogers posted:Don't listen to the knuckleheads that are telling you YNAB is an all manual process, it's for getting a better handle on your money, etc. Whatever works man, but the manual entry is an explicit part of their method. That's all we're saying. YNAB Hisself posted:Here’s the deal: YNAB prefers manual transaction entry. Why? Because it keeps you close to your budget – allowing you to own every purchase as you record it.
|
|
#
?
Feb 11, 2014 03:17
|
|
|
Henrik Zetterberg posted:I don't need it to add past transactions really, just future ones. I've got money moving to/from multiple bank accounts, credit cards, 401k, stock, normal bills that aren't the same amount every month, etc. It would be a bit cumbersome to have to enter everything manually unless I'm missing something. There are transactions here entered up to four or five months in advance, which pretty much has to be manual since most online systems would freak out, and some transactions aren't recorded until several months after the transaction date. I actually wouldn't want too much in the way of automated entry on the grounds that most electronic systems with which I interact lack the necessary details per transaction. Typically, for example, your bank may know that you used your debit card at Restaurante Z, but they'll have no idea that you blew through $40 of your alcohol budget and only $20 was spent of food. I'm an advocate of the "right number of categories" approach, which lately equates to "more categories", for personal savings and expense tracking. For people trying to save and monitor the "reality" of their expenses, throwing huge chunks into broad categories hides the reality of one's actual spending --- large companies and small governments love this approach, of course --- and seems contrary to the purpose of the tracking software in the first place. Moreover, I must say I always suspect that these budget software companies try to drive their users toward models where "fewer categories are easier" simply because they can't handle the data load, nor do they want their users realizing that their interface sucks so much that more than a dozen categories makes their software 'hectic'. My guess is that you may find YNAB useful for a small piece of your personal finances, but I doubt it will work for the majority of your needs. If you've made it this far, I think the real question actually is: What are you doing now to track these items, and what shortcomings are evident in the methods you use?
|
|
#
?
Feb 11, 2014 06:39
|
|
|
Can the YNAB chat go to the YNAB thread, please? I purposefully avoid that thread so I don't have to hear dozens of posts about it.
|
|
#
?
Feb 11, 2014 16:54
|
|
|
PhantomOfTheCopier posted:
Thank you for that post, it was very informative. Right now I am just letting Mint scrape all my accounts. I don't really do anything with the info other than check to make sure I didn't spend $10k this month or something. I have the budgets set up, but I rarely ever pay attention to them, to be honest. I'm not living paycheck-to-paycheck, so I'm kind of lax about adhering to strict budgets. Yeah, I know this is a bad habit which is why I'm checking into YNAB. For instance, if I gave myself $30/month for "Sporting Goods" (I play hockey), but if I break my $150 stick during a game, I just go online and buy a new one so it gets here before the next game without worrying if I have enough budgeted for it. The shortcomings of my current lax methods are basically, I want to save more money than I currently do and I think tracking everything more closely will help me accomplish that. Right now I couldn't tell you how much I'm putting money into my savings on a monthly average. At the end of the month, I dump whatever the balance is over $1500 from my checking into my savings. That said, I installed the trial version of YNAB last night and will see how well it works for me for the next 34 days. Henrik Zetterberg fucked around with this message at 18:00 on Feb 11, 2014 |
|
#
?
Feb 11, 2014 17:58
|
|
|
Nocheez posted:Can the YNAB chat go to the YNAB thread, please? I purposefully avoid that thread so I don't have to hear dozens of posts about it. I dunno, man, it's a thread about creating a budget. Seems appropriate that we talk about a tool we use for our budgets.
|
|
#
?
Feb 11, 2014 18:05
|
|
|
Cranbe posted:I dunno, man, it's a thread about creating a budget. Seems appropriate that we talk about a tool we use for our budgets. As opposed to the thread specifically created for using that tool? YNAB talk bores me to tears, so I was ecstatic when a separate thread was created.
|
|
#
?
Feb 11, 2014 19:02
|
|
|
Nocheez posted:As opposed to the thread specifically created for using that tool? YNAB talk bores me to tears, so I was ecstatic when a separate thread was created. It's a budget thread. Being bored to tears comes with the territory. Anyway, somebody asked and the discussion followed. Don't read those posts if it bugs you that much. I agree, though, people's questions specifically regarding YNAB would probably be better addressed in the other thread.
|
|
#
?
Feb 11, 2014 20:11
|
|
|
|
| # ? May 12, 2024 20:10 |
|
|
I just finished reading the thread, and it's been very interesting and useful to read the different discussions about the various methods and tools people use for budgeting. I used GnuCash to track my accounts and expenses through my entire time at university, and it introduced me to a lot basic accounting principles including double-entry bookkeeping, using logical accounts to track expenses, assets, etc. However, its budgeting features were pretty useless, and although I tried to implement something similar to the envelope method, I found it difficult to stick with it, and so most of the time I just spent to my current account balance, not to any sort of budget. Although I never got myself into trouble debt-wise, I did do a lot of impulse purchasing and would pretty much zero-out my current account every month. Tracking savings goals was also quite difficult. I discovered YNAB a couple of months ago and want to add my voice in support of it. I don't want to resume the arguments from the previous pages, as ultimately people should use whatever works best for them, so I'm not trying to convince anyone to switch to YNAB if they don't want to. Instead I want to explain why I found YNAB quite useful, even though I don't consider myself to be a total novice in terms of personal finances (the impression I got from some the discussions is that some people treat YNAB as a "my first accounting program"). As I mentioned, I felt that I had a fairly good understanding of how to budget, including coming up with something very similar to the envelope method, I just didn't have the right tools for the job, so I couldn't get it to stick. With YNAB, I finally found that tool and things clicked for me right away. Sure, there's plenty of other tools available that do a very similar job, including spreadsheets, databases, other software, etc., and I agree that YNAB is ultimately little more than a spreadsheet with a fancy GUI. However for me the main advantage was that I didn't have to spend time coming up with my own framework and it provided one for me. YNAB gives me a basic system that I can then adapt to fit my needs, and I think it's more flexible than some people imagine. I have quite a lot of categories set-up, I track quite a few accounts (physical AND logical), and it all works pretty much fine. Sure, the reporting isn't as sophisticated as GnuCash, but in many ways it's actually easier to get the specific data I want, rather than messing about with a complicated reporting interface. I don't mind tracking everything manually, as this is what I used to doing before, and I find that if I enter every transaction at the time that I make it, the overhead is actually very low. When I check my statement weekly, I usually just have to mark already existing transactions as cleared, and it's very much a mini-reconcile each time. Tracking investment accounts, retirement funds, etc., is also fairly easy. These are accounts that don't affect my day-to-day life at all, there's no reason I need to do anything more to them then adjust their balance every couple of months so I can track their net worth; those are meant to be long-term accounts anyway, so there's no point in micromanaging them in the short them. So, essentially, I feel that YNAB is recommended so often because it does what it sets out to do quite well. Ultimately it has helped me control my impulse spending, impose some more discipline, and has helped me start saving for an emergency fund and buffer for my day-to-day expenses. There are a couple of hurdles and quirks that might take a bit of getting used to for newcomers, but I consider those more to be aspects of the getting used to its concept of envelope budgeting, which often requires a different approach to thinking about spending, rather than any specific fault in the program itself. Sure, maybe in some ways it is a bit too simplistic (I wouldn't use it to do business bookkeeping, despite it offering that option), but for many personal users, it's a great tool to get people started on, and used to, budgeting. If people's needs change, and they require something more sophisticated, by all means they should move on to something else, but at least they'll take some good concepts with them. I also want to address one of the criticisms that Phantom mentioned before. That's the idea that YNAB allows and/or encourages you to mess around with your budgets willy-nilly. I pretty much disagree with this entirely. I think an important part of budgeting is self-control, and YNAB does not change that, and ultimately is no different in that respect than a spreadsheet or other method (it's pretty easy to fiddle numbers in those applications as well). The philosophy of "rolling with the punches" isn't "take money out of rent budget because you overspent on meth this month," it's just to not beat yourself up about minor overspending, and to stop you from being discouraged when it happens. You still have to have the self-control and ability to prioritise so that A. the money you take out to compensate for overspending comes from a discretionary source, not your savings or important bills, and that B. you are able to make adjustments in the future and stick to them better. As I mentioned before, I used to be pretty bad about impulse purchasing, and YNAB has helped with that enormously. However, I still mess up occasionally. For example, this month I spent £45 on a bottle of whisky, when I had only built up a £30 balance in my "nice booze" fund. So I took £15 out of my fund for buying video games. This now means that I won't have any money to buy video-games this month (it's fairly low priority to start with, so there's not that much going in there anyway), and seeing that empty balance acts as very good control on my impulse spending in that category. YNAB has helped me build up my self-control (the occasional slip up aside) that I know I can go through the rest of the month not making the same type of impulse purchase on a discretionary purchase that I haven't budgeted for. Seeing the fact that I overspent, but then being to adjust for it, and paying for my lack of impulse in one category by forcing myself to delay gratification for another reinforces my determination and makes me more motivated to stick to the budget. This is compared to previously, where if I was on a tight budget, or just spending from my balance, I would think "drat, I already messed it up this month, I feel terrible, might as well go in all the way and go on a massive blowout on meth*." Like I said, it does take self-discipline and the ability to prioritise spending by setting rules for yourself to use YNAB, like with any other budget. If I adjust my budgets for my month, because I overspent, I ALWAYS take money from discretionary categories (which in YNAB I have in a distinctly separate master category), NEVER from the important bills or my savings/emergency fund (unless it's an actual loss of livelihood/health emergency). So rather than focusing all my energy on sticking absolutely and 100% to a specific budget, I can focus my energy on meeting these rules, which I find a lot easier. And I think Rule 3 is basically trying to get people to do just that. If the important budgets don't get touched when you have to adjust for overspending, what exactly is the harm? And how is this a specific fault to YNAB when this is a weakness in pretty much any other method? Finally, to finish off this long-rear end post, I also wanted to add to the thread my way of dealing with cash. I do track each individual cash transaction, as I still do use cash for quite a few things (maybe the UK is still a bit more cash based than the US) and so I want to be able to know where that money is going. The YNAB mobile app also makes it fairly easy. However, I do round up each transaction to the nearest £. So whether I am spending £1.05 or £1.95 in a transaction, it gets entered in at £2. Even if I get change and then spend it right away on something else, it always gets rounded up. Then, any change smaller than 50p gets put in a jar at the end of the day. This does several things for me. Firstly, I am overestimating how much cash I've spent, whilst maintaining a reasonably accurate record of where my cash goes, and my budgets have got enough of a buffer in them that this overestimating doesn't cause me to overspend. As a result, my YNAB cash balance is often quite a bit lower than the actual cash I still have in my wallet. This then gives me a little buffer in my cash account that helps me cover the occasional transaction that I do forget to enter, which is nice. Secondly, at the end of each month I reconcile the YNAB balance with my actual cash-in-wallet balance, which usually results as an inflow for that month, which then immediately gets budgeted towards my savings. It's not a lot (maybe £5-10 a month), but it does help. Finally, every now and again, I will also take my full coin jar to the bank and deposit it, which also goes straight into savings. So essentially, I not only manage to track my cash spending fairly accurately, I ensure that any cash money that is left over gets put straight into savings rather than just spent on meth. Anyway, effort post done. Just wanted to share my opinions, as I know I have learnt a lot by reading the previous discussions in this thread. *I love that this example gets used in this thread to stand in for a discretionary expense. 
londonmoose fucked around with this message at 15:54 on Feb 12, 2014 |
|
#
?
Feb 12, 2014 11:34
|
|