YNAB long term review – 2 years!

April 9, 2015 at 11:07 pm 1 comment

March 15rd, 2013, the date of the oldest entry in my copy of YNAB.

You Need A Budget (YNAB) is a personal finance software package which I began using a little over two years ago.  The company that sells it doesn’t just sell a piece of software, they give you a method to get out of debt.  For me, their method worked.

This is my two year review.

Before I started using YNAB, I had been working for over 20 years, but never seemed to be able to get out of debt and meet any real financial goals.  Sure, I was able to pay my bills on time, buy new cars, etc. but never seemed to be able to get ahead, or save up enough for a major purchase.  I virtually always paid on credit then worked to try to pay it off after the fact.  You can’t really handle retirement that way…

As I remember it, it was late on a Friday or Saturday night.  I was feeling the typical levels of stress associated with debt, as I had either just paid bills or looked at private school tuition pricing, something I saw no possible way of being able to afford.  As I lay in bed surfing a few sites on my phone, I happened across an item on LifeHacker mentioning a special YNAB sale that had been going on, though it appeared to have ended a few hours earlier.  I turned off my phone and laid there in bed for a while.  Suddenly, I made the decision to just get up and see if the sale was still, by some chance, going on.  It was, and it didn’t take me long to make the decision to buy it.

Prior to buying YNAB, I read about one major feature I used that YNAB was missing: the ability to import transactions directly from your online bank.  This weighed in as a negative to me at the time, but viewing this through the lens of experience, I realized this feature doesn’t help you control spending or save money.  It only helps you save time.  But, if you are saving time doing a crappy job of managing your finances, what good is that, really?  After using YNAB for two years, I can tell you there is real value in putting those transactions in yourself, either via your smart phone at checkout, or your computer as you pay your bills.

In just a few short months, YNAB re-shaped the way I viewed money.  I was suddenly very precisely aware of how much money I was spending, and on what.  Within three months, I essentially found $600 per month that I had been frittering away.  Using YNAB, I was able to determine how much money I could afford to use to pay down debt.  It also let me “run the numbers out” to see how long it would take me to extinguish my debt.

There I was, with a monthly budget with realistic numbers, and a plan that showed just how much progress I would make toward killing my debt, each and every month, until it was gone.  Seeing a real-world plan to get out of debt felt great.  It was the motivation I needed to give the YNAB method a real chance at working.

With that debt paid, I figured I would be able to send both of my high school aged girls to private school.  Fast forward to today – they’ve been attending that private school for 3 semesters now.

My wife was initially hesitant to budget, feeling like it would restrict her spending.  She has since told me that she actually likes having a target amount to spend.  If she takes the kids Easter shopping, and we have $200 in the clothing category, she can easily determine a per-child limit.  She took ownership of the grocery category, and got mad at me when I spent money from it without consulting her beforehand.  She knows we are more prepared for emergencies, and she can see that my stress level has dropped dramatically.  The positive effects of budgeting won her over.  Having the monthly budget meeting with her helps, as we both get input on the budget plan.

Using YNAB, we’ve been able to save for Christmas and pay for it from the budget, so there was no “January credit card hangover”.  The big homeowners insurance and property tax bills are now easily handled, since we can save up for them many months ahead of time.  That money is set aside in the respective categories, so I know exactly what it’s for.

Prior to YNAB, I might look at my checking account balance and feel like things were well in-hand.  Then, I wasn’t mentally tracking how much was on all the credit cards, the money we were saving for individual goals, upcoming large bills, etc.

There have been bumps in the road, though.  Like the month that a rock hit by a mower took out a side window on the mini-van.  And the next month when the back window of the car inexplicably shattered.  But, since we had a small Emergency Fund saved, those bumps were just bumps.  They didn’t cause serious stress, or even one penny in interest charges, like they would have in the past.

Early this year, I decided to make retirement more of a priority, so I started a Roth IRA account with WiseBanyan.  I budget it in YNAB, just like any other bill, and I can use YNAB to plan “bumps” to my contributions in future months.Stress over money has plummeted in my home.  We have things planned out in YNAB, so all our major expenses are covered, and we have a little money set aside for emergencies.  Living off of last month’s income means that if I were to lose my job tomorrow, I’d still have about of month before things start to get really tight. So, after two years with YNAB, what’s my conclusion?  Before YNAB, I struggled financially, sometimes wondered where my money went, and couldn’t seem to ever get out of debt.  For me, YNAB was the answer.  Ready to get started with YNAB?  It’s normally $60, but if you click this link, you’ll save $6.00.  Full disclosure:  I also get $6 when you use my link, which adds up to a grand total of about $6 every couple of months, usually.

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