You Need A Budget
YNAB is short for “You Need A Budget”. It is the name of not only a software package but also of a brilliant method of budgeting your money that I have grown to know and love.
What makes YNAB so appealing when it comes to budgeting is how it works.
Normally we are taught - if we are taught at all - that in order to keep from sinking into a financial hole we need to budget our money. Fair enough, but where to start. Well, if you’ve ever explored budgeting before you know that it involves making a plan not only for where you will spend your money but also on how much money you will have coming in.
Now I don’t know about you but the step of having to forecast how much money I would have coming in was tantamount to peering into a crystal ball and actually getting answers.
How was I supposed to know how much money I would have to spend? Sure, I had a regular income but since I get paid hourly and my work week always fluctuated I could never count on any specific amount of money with which to budget. So that’s where most budgeting attempts usually ended for me. But since the lack of having a spending plan was not working out so well either, I decided in June of 2006 to give it another shot.
I started poking around the web and came upon a review of YNAB on the “It’s Your Money” site. After reading the glowing review of the original YNAB excel spreadsheet I decided to have a closer look myself.
What I found was a method of budgeting that gave me one of those serious “Why didn’t I think of that?” moments.
Jesse Mecham - the author of YNAB - came up with the idea of saving up an entire months worth of money as a “buffer” then budgeting off of that known pile of cash. As you go through the month you would enter your income as “Primary” which earmarks them for spending next month. Then when it comes time to budget out the new month you once again have a known amount of cash with which to work.
Brilliant.
Since then Jesse has teamed up with a programmer and he now sells YNAB “Pro” which is a stand alone program with more features being built in all of the time.
With the release of the First version of YNAB Pro Jesse launched a support forum on his site. I’m a regular contributer to the YNAB forums under the user name “Mudie“. I’ve learned a lot about how YNAB works over the past year and do my best to share that knowledge whenever possible. So much so that I was very surprised to find the tag of “Jesse asks ME questions about YNAB” show up as an avatar under my user name one day. Although I’ve never mentioned it on the forum, I’m flattered to say the least since only Jesse or Taylor - his programmer - could have placed it there.
In any case, I’ve found myself repeating things lately as more and more new users arrive on the forum. In an effort to save some time and be able to more clearly guide new users through the first steps of using YNAB I’ve decided to publish a series of “How to” guides here on my site. Once I get a few in place I will start a Journal on the forum and link to here etc.
So stay tuned, there are great things on the way.
~Steve