Budget failures

March 28, 2014 at 11:42 pm 2 comments

Today, I’d like to talk about budget failures.  During the last year, I’ve been budgeting and almost immediately, I saw the huge positive effect on my life.  I have convinced several people to get YNAB, and even bought a couple copies to give as gifts.

I know that three people that I’ve either given YNAB or gotten them to get their own copy, who have had “budget failures”.

With the great feeling of control I have using YNAB, I have trouble understanding these failures.  Why would anyone stop using a tool that gave them the feeling of control and peace that YNAB gives me?

The reasons offered for these failures:

1.  “I make too little money to budget.”

2.  “Manually entering in the transactions is too much work.”

3.  “I ran into a situation I didn’t know how to handle in YNAB.”

Personally, I think all three of the above are excuses.

Not enough money to budget?  If you have a low income, budgeting helps make each of those dollars go farther.  If your income is lower, you’ll probably benefit MORE from using a budget.  I totally don’t get this reason.

Budgeting too much work?  It’s a little work, sure.  My wife and I enter most transactions on our phones.  When I get home in the evenings, I spend a few minutes logging into each of my banking websites, marking cleared transactions, and performing a reconcile.  That’s typically three websites, each taking probably a minute.  Some less.  So probably 5 minutes or so a day is all that I need to keep on top of my budget.  You don’t need to check it daily, most people would be fine with once or twice a week.  In that case, it would probably take you a little more time to update everything.   The relatively small amount of work is required, though.  It’s important to keep up with it pretty regularly so you have the awareness of your spending.  Awareness is key to keeping your budget.

I couldn’t figure out how to handle situation X.  In this case, check the YNAB forums.  If the question isn’t there, ask it.  Figure it out and keep budgeting!

I think the real problem is this:

The Reality of the Budget.  Lots of people don’t really want to know their financial situation.  They know its not in a good place, but they don’t want to know precisely how bad things are.  Why would anyone not want to know?  I think I can answer, because I believe I’m guilty of this.  I didn’t want to know how dire the situation was, because if I knew, that would make me want to limit my spending.  I would feel compelled to avoid spending money unless I really needed to.  Like an alcoholic in denial about having a problem, I wasn’t ready to stop overspending.

I imagine you’ve heard the phrase Knowledge is Power before, and it’s really true in this instance.  Knowing your total debt creates that awareness that makes you want to get rid of them.

Awareness doesn’t stop at knowing your debt.  You also need to be aware of your daily spending.  Check your category balance before spending money, not your checkbook balance.

In short, the more aware of your true financial situation, the better spending decisions you’ll make.

Being Ready.  I think a large part of whether you’ll be successful using a program like YNAB is whether or not you are really ready to do it.  Like the proverbial alcoholic that has to “hit rock bottom” before they are ready to quit, I think everyone needs to be at a point in their life when they realize they really do need a budget, before they have a good shot at being successful.  You have to want it more than having your Starbucks fix three days a week.  Until you want it that badly, you’ll probably just keep failing.



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2 Comments Add your own

  • 1. Lindsay  |  June 4, 2014 at 9:37 pm

    I found your blog when I was Googling “credit card float.” I’d never heard that term before and was shocked and horrified to find out what it was and that I think I’ve been doing it for years. Yikes!

    Thank you for all your YNAB posts. You’ve done a great job portraying YNAB as the down-to-Earth, realistic software it is. As you said, I hit my rock bottom last month when I realized that, if (a) my last-day-of-the-month paycheck didn’t arrive a bit early due to the weekend and direct deposit, and (b) my first-of-the-month bills hit the bank early due to the weekend and automatic withdrawals, I was going to be desperate for cash. That was my rock bottom. I’m ready for a budget now.

    I just started using it last week, and I’m delighted with how it’s going so far. I’ve taken a couple of the classes hoping to win a free license key, but it looks like I will need the whole trial to save up enough to purchase it. (Bittersweet irony?)

  • 2. ptaylor  |  June 4, 2014 at 10:45 pm

    Those credit card companies are sneaky with their trap, but now that you know, you can do something about it.

    Keep waiting it out until your trial is almost over. They sometimes have sales that only last a few days or so.

    I’ve been using YNAB for a little over a year now, and I can’t imagine NOT using it now. There’s still not enough money to get everything done that we want, but we are able to achieve goals now that seemed impossible a year ago, and we aren’t stressed about money anymore.


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