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Today I have another goal that I created for myself and our family this year…establish a budget.
Dun dun dunnnnnn.
For years, Jay and I have been making “attempts” at trying to figure out and establish a budget that we can work with. I’m pretty sure it started back when we got married six years ago and decided that we would combine all of our accounts into one. It’s worked well for us, and I’m very happy we did it…but we’ve never done much beyond that.
Every few months, we wind up saying something along the lines of, “okay, let’s keep track of ALL of our receipts for this month so we can get an idea of our actual spending.” And each and every time, we wind up with an enormous pile of random receipts that go wayyyy beyond the one month that we originally planned on tracking.
It’s a mess. And every time we say, well I mean, we’re still doing fine so I guess we really don’t need to worry about anything?!
But I’m not dumb. I have NO doubt that if we actually did take the time to see where we’re spending all of our money, we’d absolutely come across things that we’d find unnecessary. And as we’re getting older, it really is time to start honing in on our spending and how we can better save and invest. After a new home last year, and a new baby coming later this year, it really is time to start getting a plan in place.
So recently, I decided to sign up for an account with YNAB (You Need A Budget). YNAB is a personal budgeting web app (with companion apps for Android and iOS), but part of the reason I really became intrigued by this one over the others out there is because they do so much more than just let you track your stuff. We’ve tried that before and have failed miserably. YNAB teaches a philosophy that has really come to make so much sense, and it’s really shown how budgeting isn’t restriction. It’s about how to do more of the things that matter most and having total control of your money.
(this is a stock screenshot and not our own)
There are “Four Rules” behind the philosophy of YNAB that have totally made Jay and I start to think differently about our money.
Rule One- Give every dollar a job
Money is finite, and no matter how much of it you have, you need to prioritize where it goes. As you prioritize what’s most important to you, it will become clear where you should spend your money. Every one of your dollars should have a job. Decide in advance what you need it to do, where you need it most, and work only with the money you actually have.
Rule Two- Embrace your true expenses
To put it simply, your true expenses are a combination of your everyday expenses and the less frequent expenses (like car repairs, quarterly insurance bills, etc.). They are everything you have to or want to pay for right now, plus everything you’re going to need to pay in the future. They include monthly things like rent and cell phone bills, but also things like summer camps, unexpected home repairs, and back-to-school shopping.
Rule Three- Roll with the punches
You can and should set broad outlines for your money. Clarify your priorities and set goals. But when the details change, (which they will), or your priorities change, change with them. Making a change doesn’t mean you’ve failed at budgeting; it just means you’re adjusting.
Rule Four- Age your money
Imagine that you’ve taken care of your obligations and true expenses and have a plan to deal with your debt. Yet, because you’ve been prioritizing so effectively, you have money left over that still needs jobs. You can send that money right to next month to do next month’s jobs. When you do, you delay the amount of time between receiving and spending your money.
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For us, we have a number of expenses we would currently count as our true expenses (aka, ones we have and have no plans of giving up):
- Mortgage
- Taxes
- Groceries
- Insurance (car & house)
- Child care
- Utilities (heating/cooling, water, sewer)
- Cell phones
- Cable/Internet
- Gas
- My final student loan
And of course, there are a number of other expenses that we have, which are not necessarily monthly or “essential,” but more like dining out and fun money.
We’re still very much in the beginning stages of working out our budget, but initially, we have budgeted for and have created a plan for the non-negotiable, they’ll-turn-off-the-lights-if-I-don’t-pay-this types of expenses: mortgage, taxes, groceries, utilities, and child care. There are still quite a few more that we’re trying to figure out, but these questions from the YNAB guides have been a huge resource for us when trying to make a decision:
There are a number of features that YNAB offers on their all-new web based version, but the feature that I’m currently focusing on is creating goals for your money. One of the main goals that we currently have is to pay off my one final student loan. There’s still a pretty decent amount left on it, but it’s one of those things where I always think, “why aren’t I contributing more to this when I have the money to do it?” So now, that goal is to get rid of that thing for good!
Other goals we have so far for this year?
- Make at least 2 extra mortgage payments throughout the year
- Limit credit card purchases to only those that can be paid off in full the following month (this will be a process…but that’s why it’s a goal!)
- Save up for future additions to our home (such as a pool, three seasons room, and a few potential others down the road)
- Increase the contributions to Lucas’s college/savings account
Like I mentioned before, we’re still very much in the beginning stages of this whole budgeting thing, but I really am excited to continue to dive deeper into YNAB and see just how many improvements we can make with how we allocate our money. And I have every intention of checking back in on this with you guys in a couple of months to see just how things have gone thus far. Yes, I’m sort of making you all hold us accountable!
For any of you who think you may be interested in trying out the whole budgeting thing for yourself, I’d really recommend YNAB. From what I’ve seen so far, it’s been incredibly user friendly, and the YNAB guides have also provided a ton of useful support resources which have really come in handy. They also offer free daily, online classes, and YNAB is free for all college students!
Want to try out YNAB? Sign up for their 34-day FREE TRIAL by CLICKING HERE!
Questions for today: Do you have a budget? Have you ever tried budgeting and failed? If you’re an established budgeter, do you have any tips for the newbies?
Disclaimer: This post is sponsored by YNAB. All opinions and thoughts/goals regarding my personal budget are my own and I do not get any incentives/kickbacks for you signing up. Thank you, as always, for your continued support surrounding sponsored content on STSL. <3
Brynn says
Asking yourself if the expense is necessary or out of habit is huge. I found I could save a lot of money when I was truthful with what I was spending on non-necessary items and things.
Madeline @ FoodFitandFam says
We’ve been using YNAB for awhile now and I LOVE IT!
Courtney says
Ohh, that’s so awesome to hear!!! I love how easy it seems to be, but sometimes I still get overwhelmed just with trying to make sure I’m remembering everything, etc…any tips, Madeline?? :)
MARTHA says
Have you listened to Dave Ramsey? He is awesome…he has books, podcasts, speaking events, etc. Check him out.
Courtney says
I’ve checked him out VERY briefly in the past, but was always a bit intimidated by him…! Maybe this will be the year I can buckle down :)
Alaina says
My husband LOVES Dave Ramsey. I’m always joking that I’m married to two Dave’s given how often he’ll talk about the podcasts.
We established his 7 Baby Steps plan and are currently out of debt and very close to paying off our mortgage. He can be “gazelle intense” and quite preachy, but in the end he’s such a great resource for trying to get out of debt and building wealth.
Good luck with your budget! After a while budgeting can actually be quite fun. :-)
SJ says
DAVE RAMSEY FOR LIFE! I took his course before going to college. I am in my sophomore year and will start financing my own education for the next two years. I go to a private school that doesn’t accept any government grants/aid, so the yearly cost is 40K. But because of him, I have managed to work hard and bring that down to 13K/yr and will be able to cover it myself, graduating debt-free (and probably with some savings to boot).
For anyone in high school and older, I HIGHLY recommend him. I’m so glad I took that course when I did – I’ll be able to avoid a lot of the common spending/debt pitfalls that adults fall into.
Linz @ Itz Linz says
i’ve i’ve always wanted to try to budget, but never have!
Taylor says
My husband and I try to do a lot of budgeting. We also make a good attempt to cut back on extracurricular activities (dinner out, grabbing a drink, movies, etc.) when we have a trip planned so we can save the extra spending money!
Courtney says
That’s definitely a great idea! We also try to be mindful of extra, unnecessary spending when we have bigger things coming up like trips, holidays, etc.
Kerri says
Dave Ramsey is great! It sounds like YNAB has some similar ideas, but Dave Ramsey’s Financial Peace University really outlines setting up a budget and how to get rid of debt step by step. My husband and I have been following it since we got married, and are very happy. We have a monthly budget meeting every month, and with our first baby on the way, we are so grateful to have this set up. Though, it is definitely still scary to think of all the extra expenses heading our way soon! It seems like you may be able to combine YNAB and Dave Ramsey.
Courtney says
I have heard of Dave Ramsey! Although, admittedly, I’ve been scared away in the past…perhaps I’ll have to check him out again!
Ashley | the Pike Place Kitchen says
I don’t “budget” – but that’s one of my goals this year too. I want to sit down with my boyfriend once a week and plan expenses – how much we’re actually willing to spend and sticking to it. (even though I haven’t budgeted in the past, every month I reconcile my accounts and pay down my credit cards in full so that I see how much I’ve spent and if it seems like an anomaly I’ll look into where the bulk of the spending came from. I’ve LOVED that practice.)
Courtney says
That sounds like a great system you guys have!
Melissa @ Freeing Imperfections says
I’m so glad you’re talking about this! So many people, especially young couples, have no idea what they’re doing with their money. I am admittedly pretty terrible with money and am the “spender” of the family, but my husband loves finances and keeps everything in check. He actually does save all our receipts which I HATE with a passion, but he will at least throw them away when he’s done. He pretty much has his own excel spreadsheet of what it looks like YNAB has.
We established a long time ago that I got my own account for personal spending. If I had access to our main checking account, I’d probably spend it all! But even within my own account, I wish I spent differently. I’ve tried a few different things and nothing really works. Setting goals for what I want to buy does help, but I still probably spend way more on Starbucks than I want to admit!
Courtney says
It sounds like you guys have a pretty good plan going, that’s awesome! And your comment about having access to your main checking account made me LOL. Too funny :)
Sarah @ Seriously Lovely says
My husband and I are working on setting up a budget right now.. Like you, we always said we were going to track our expenses, but then never really did. With a baby on the way, money is going to be very tight, so now we don’t have a choice, lol. I’ve been feeling frustrated about finding a way to actually track expenses though, so maybe I’ll check out ynab!
Katie @ Talk Less, Say More says
I’m totally on the budget plan this year too except mine has to include getting a second job too to pay down debt. Blah…but I’m hoping I can do it all in a year and basically start fresh in 2016. It’s a goal… ;)
Beks says
A couple years ago, my sister and I took Financial Peace University at our church, and it was incredibly eye-opening. I’m not spending near the amount on the stupid stuff that I used to. I’m still bad at budgeting, but I know where my money is going now. I need to get back into it, but it’s the same concept that you’re doing here: Every dollar has a job.
Kelli ShallalK says
Awww the receipt drawer! We totally do that! Then it’s like wait, which month did we decide to track? Sometimes I just want to track groceries so I leave the pile on receipts on the counter, that literally never works! I’ll have to check this out, because the balancing my check book lesson I learned in high school really doesn’t apply anymore….
Brittney @ The Lynns says
We started tracking our money and making a monthly budget (after listening to Dave Ramsey, don’t be intimidated!!) and it was truly life changing. We were able to pay off ALL of our debt (yes, even those student loans) and it has been incredibly freeing. We initially made our own excel sheet but have now moved on to use Every Dollar (which is also a product of Dave Ramsey if anyone else out there is interested!). We tried YNAB but it just wasn’t clicking with us. The biggest piece of advice I could suggest is find a program that works for YOU and your family. Some people love YNAB, some love Mint, some love creating their own, but you need to go with the one that makes sense to you otherwise you will never use it! Good luck!!
Jessica says
I literally just got off the phone with my husband and this is the exact thing we talked about. We need a a budget! I really want to build a house and I don’t want to go into that process until all of our finances are in order. We don’t really have a plan right now, but I am totally going to check out the website you talked about.
Andrea says
I have been setting up my Quicken budget over the past few days. It’s always an eye opener to see where it’s all really going!
Erica says
I am obsessed with finances! I started talking a lot more about budgeting on my blog last year. I don’t 100% agree with Dave Ramsey (his investment advice is terrible) but I do love his budget set-up. I also have Ynab but don’t use it. I got overwhelmed with tracking every single purchase, so we just track a few key spending categories (groceries, household, baby, blow money and eating out) and don’t worry about the fixed expenses. It’s been working well for us and much less hassle.
maeve says
I am SOOOO glad you posted this and I would LOVE to hear your thoughts after using it for a while. I saw a review of the same tool on another blog (“Budgets are Sexy”) but I am excited to see a lifestyle blogger use it rather than a finance blogger.
Every year I say I am going to figure out my budget, but then just end up in Mint categorizing my spending and not bothering to change my spending. As a single girl I get away with the no-budget thing, but I know this will change down the road and am trying to set up good habits now. Can’t wait to hear what you think of it going forward!
Danica says
My husband and I started following Dave Ramsey’s advice/”baby steps” a couple of years ago, and it was completely and totally life-changing for us. We’re now 100% debt free and are almost to the stage of investing. It’s incredible and not something I ever imagined I’d do by 25 years old. I used to think only “rich people” didn’t have debt, and I’m so grateful I have a better money education now :)
These are 2 things that really help me:
1 – A budget is not simply restrictive, it’s not something that’s making you stop spending money. Instead, it’s a a tool to simply decide where your money is going. “For fun” spending is absolutely a part of it.
2 – (this one I’m still very much a work in progress on) Focus on *contentment.* This word in itself always puts my priorities back into place and helps me make wiser decisions when it comes to finances.
Keeping track of where your money goes is easily the biggest, most eye-opening, valuable step – congrats to you and your husband for tackling this as a team!
Alyssa @ renaissancerunnergirl says
I started using Mint.com to track everything – total savings, income, loan payments, credit card and debit card – and it is so helpful to pinpoint where the money is going each month. Putting everything into one place really lets you see it in black and white!
SJ says
Oh, this is also a fantastic resource:
http://moneysavingmom.com/
I’m not a mom (not even close), but I love it!
Kristen says
I LOVE YNAB!!!! I’ve used it for a little over a year and Idk what I would do without it!
Emily @ Relishments says
We started using YNAB last winter and just upgraded to the newest version. The nice thing is that there’s less to remember, since you can connect your YNAB account right to your bank account, which wasn’t the case in older versions. It’s been awesome for Brian and I to know that we have money saved up for things — Christmas was awesome because we had plenty saved up for gift giving!
Cassie says
I have been using YNAB for about 6 months now and LOVE it!!
I just noticed they’re rolling out a new system which worries me a little only because I just now feel in the groove with the current software! Haha… I’m going to wait until I have free time this summer (I’m a teacher) to change over to the new software… I’m sure it’s great it’s just change is hard sometimes! ;)
Love the current YNAB app! So easy to manage expenses on the go! :)
Lisa says
I agree with everyone else, i am so glad you’re talking about this, i wish everyone would and i wish they would focus on money/budgets more in highschool. When my husband and i were married 10 years ago, he was very particular and to the penny, so it made sense for him to do the bills and thank goodness. I’d say the biggest thing to know is it will TAKE TIME. Try your best to be disciplined and really commit. I know it’s hard to change bad habits but it will pay off. We spent the first 6-7 years of our marriage really getting into a groove with finances. We had two babies, bought a house, 2 cars etc. But now at 10 years, our babies are 7 and 5, our cars are paid off and we’re down to 10 years on our mortgage. It was hard! I didn’t buy a lot of new things, i had hand me downs for maternity clothes and the walls in our house were empty with decorations. It is all worth it though, and everyone has different priorities, lifestyles, incomes etc. Exactly like you are starting is the best way, make a plan and start from there. One step a month if you have to. I do agree with a lot of the Dave Ramsey advice, we never bought anything or actually listened to anyone of his series but simply googled his 7 step process and followed that very loosely. I suggest that as a starting point also. If you have any questions, feel free to e-mail, i’m no financial expert but i can help, because it’s worked for us. oh and the number one rule we have followed, ‘do not live beyond your means’ don’t spend more than you make.
Lisa says
so sorry! i didn’t realize i wrote a book!
jessica w says
We have been using YNAB since 2011 and love it! It takes a little bit of time to figure out your categories and what to allot where,but once you get in a rhythm it is nice. That isn’t to say that we don’t get behind here and there. the only downside is when we got YNAB it was a one time payment of $45, and then since 2011 we haven’t had to pay anything. Now they changed their model where it costs around that yearly,but some people prefer their newer features.
P.S. we used the Bonefish Grill gift card I won on here today for my birthday, and it was glorious!! All I can say is bang bang shrimp+pomegranate margarita + imperial tilapia + filet mignon(hubs) + Macadamia nut brownie = HEAVEN… they had to roll me out of there :)