You've never budgeted like this before

Like most people I never learned any effective method to manage and budget my money while I was growing up.  Over the years I tried many of the traditional budget methods such as listing our total monthly projected income and subtracting the expected expenses which looked good but never matched reality, so at the end of the month we were in a position of wondering where all the money had gone.  We tried using mint which was fairly good at tracking where our money went, but we didn't find it effective for planning where we wanted our money to go nor to decide in the moment how much we could actually spend on any particular item.  We tried everydollar which is very effective at assigning jobs to every dollar based on your projected income, but the free version doesn't link to your accounts so it is difficult to track expenses, and as it follows a more traditional income forecasting method we never knew exactly when we could actually pay our mortgage or pay a utility bill and also buy a weeks worth of groceries without bouncing a check.

All that to share with you that about a year and a half ago we found YNAB - an acronym for You Need A Budget - their budget application is available via the web and as an app on your smart phone - they have an app for both the android and the iphone.  It is a virtual cash envelope system in that you only budget money you actually have available to spend right now, cash sitting in the bank or in your wallet.  If you have a multi-adult household you can easily share a budget by both logging into the same YNAB account.  For example, if I buy some groceries and enter my purchase on my phone, then a little later my wife goes to buy groceries, she can easily check on her phone to see how much money is still available to spend on groceries as she walks into the store.

YNAB is able to link to your accounts and will download transactions which it will present to you in a list of new transactions that will be matched against those you entered manually, and will also present to you any that you forgot to enter for your review and acceptance.  Super easy and painless, it is the first system that has worked for us for both planning our spending before we spend, and tracking our spending after it is spent.  It also has a wonderful reporting system to review average expenses in any category or category group over any period of time, which is great for calculating monthly funding goals for variable expenses like fuel or groceries.

Since the app is a virtual cash envelope system, you only budget with actual cash on hand, either in your pocket, home safe, or in your checking or savings account for example.  You'll give every dollar a job, and if there is a dollar in any given category - such as groceries - you know that the dollar actually exists RIGHT NOW, and can be spent right now.  No more complicated issues around forecasting future income and having no idea how much you can spend today without bouncing a check.

Since we started using  YNAB a year and a half ago, we were able to build up a 1 month buffer (all money earned this month gets budgeted for spending during the following month) - December is still a few days away and we already have every single dollar that we'll be spending during the month of December in the bank ready to go on December 1st, from the money that we actually earned this month (November).  This makes budgeting amazingly easy and stress free.  We also follow Dave Ramsey's baby steps and saved up a $1,000 baby emergency fund, paid off all of our non-mortgage debt, and more recently built up a 3 month cash emergency fund in the bank (steps 1 through 3).  Today we are on baby steps 4, 5, and 6 (contribute 15% of our income to retirement, save up or cash flow kids college, and work on paying off the home mortgage early).

I can't even put into words the peace of mind that our current financial position has placed us in.  A year and a a half ago we were making monthly payments on debt and living paycheck to paycheck, under immense stress wondering when (not if) we'd bounce our next check.  Now instead of feeling like literal slaves to debt, when we had to allocate most of our monthly income to debt payments, we actually get to choose where to spend our money based on our own priorities.  The peace of mind of being consumer debt free is indescribable and priceless!

You too can do what we've done.  Anyone can do it.  About 8 out of 10 Americans are currently living paycheck to paycheck irregardless of income the same way we were only 18 months ago.   Whether your income is 20,000 a year of 200,000 a year, it isn't about how much you make, it's about making a plan for your money and sticking to it.  I've heard people make an excuse for why they don't budget saying they don't have enough money to be worth making a plan.  If you don't have enough money your need to budget is even GREATER than most, not less.  Every single penny becomes precious and you should not spend so much as one of them without having a plan for your money based on your own goals and priorities.  If you fail to plan you plan to fail.  Once you become consumer debt free, you'll never go back!

If you use my YNAB referral link when you sign up for your free trial we'll both get an additional month of their service for free.  They also have incredibly helpful free online training on how to use their amazing budgeting system.  The budget training alone is worth more than they charge for their service.  No payment information is required to try their 34 day free trial so you have everything to gain and absolutely nothing to loose.  Just give it a try, you'll be thanking me later!