Adjusting to YNABPosted: February 26, 2015
A lot of folks in the personal finance and financial independence spheres are familiar with the program You Need a Budget (abbreviated to its acronym YNAB). I’ve pooh-poohed it for over a year, trusting my pen, paper, spreadsheet system but after a commenter on this piece pointed out that the program runs almost flawlessly in a WINE bottle* I figured I might as well try it out.
30 minutes later I was hooked. 2 hours later a purchase was all but assured.
This isn’t a formal review of the software. This is basically my reaction to the software, its methodology, and how all of that makes me feel as a steward.
YNAB’s methodology breaks down into 4 Rules:
- Give Every Dollar a Job. Because the budget system and 3-month forward view works so well, you can budget forward much more effectively. I have very good data for the past, but counting out future cashflows – even fixed expenses – was always something my system had a very hard time doing. So I had to leave buffers all over the place to account for this haziness. I’m letting things stay a bit hazy for now, but in the future YNAB will let us be more aggressive about debt repayment and post-tax investment contributions.
- Save for a Rainy Day. This is something we’ve always done, but YNAB’s way of segregating funds is more elegant.
- Roll with the Punches. Oh yeah. We’ve done this a lot. Readers from the beginning (18 months ago!) will know how much has changed.
- Live on Last Month’s Income. Previously I kept a Dave Ramsay-esque $1,000 general buffer because we are in debt repayment mode, but we’re going to work up to filling a full month buffer, as it helps YNAB’s system work better. Initially I thought we had this already, but then realized I’d made an error in handling how our primary credit card was imported. We may have the buffer by April, but for sure we will have it by May of this year, and then can resume more aggressive external savings.
How do I feel?
Honestly, a bit humbled and chastened. I realize that, while I’ve made a lot of progress, there’s a lot more I can learn about future planning. Two mornings in a row I’ve woken up earlier than planned, my sub-conscious having chewed on details during the sleep, and spent my first waking minutes correcting errors and tweaking our YNAB setup.
Hubris is a nasty little bugger. I think I’ve let myself get a bit too excited about sustainability initiatives and almost dropped the ball on taking care of the core family financial health. Taking extra care is doubly important now that we are on a single income. Then again, having the mental bandwidth to focus so hard on adjusting our budget system is a possibility space created by me being home. Like all things in life, growth occurs in many directions, and from many sources.
Do you YNAB?
*For non-Linux heads, YNAB lacks a native Linux version, so to run it on Linux you have to use WINE, which is essentially a Windows emulator.