The Most Important Thing I Learned in 2015


And how YNAB helped break me of my worst habit

by Maddie Eisenhart, Chief Revenue Officer

apw x ynab

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There’s a running joke on staff that I’ve got gamblers’ blood in my veins. I like projects with quick payoffs, and I like tangible success. It’s why I’m in charge of the money stuff and not social media. Because the long game is my least favorite kind of game. And because I’m sort of a gambler, I’m the worst at saving. I like to make the money, spend it, and then enjoy the adrenaline high of trying to figure out how I’m going to figure my shit out next month. It means I’m a great partner, in both business and life, if you want hustle and growth. But long-term sustained success? Nah.

So when Michael and I signed ourselves up for the budgeting app YNAB last year, it forced a radical shift in how I approach money. Because unlike other budgeting tools that just spit out a report of what you’ve already spent your money on, YNAB’s method forces you to proactively plan what you’re going to do with your money. Goodbye Target shopping sprees. Hello budgeting.

Wishing and hoping and praying

Looking back at my old writing on APW, it becomes painfully obvious that I have a problem setting limits for myself. There are a ton of reasons I can give you for why: oldest kid, teenage parents, recession, whatever. But the real reason is that I think I’ve always perceived myself as a limitless resource. The well is never really empty, so why not just get as close as to empty as you can before you have to fill it up again? (For real, this is how I’ve ended up stranded on the highway without gas more than once in my life.) And in turn, I’ve always treated my finances the same way. I mean, if I’ve survived this long without savings, how much do I really need them?

So even though I was the one who suggested we get started using YNAB, I was afraid to actually put it into action. Because with YNAB, I can only work with the money we have. It’s a finite number. And what if the budget told me no? What if the budget said I can’t live my life how I want? But here’s the thing I’d been missing: when you plan for the future, then when you want to go to Target, you can make it so that there is already money there waiting for you to spend. Boom. I know. Crazy.

They Say If You Love Something, Let It Go

See, the lie I was telling myself was that my gambler approach to life wasn’t stressful. That it was fun. And the truth was, it was stressful as fuck. (Which, you can find out by watching any actual gambler. Like my dad.) And what I wouldn’t say out loud to anyone was that even though it was stressful, I didn’t want to stop, because I didn’t know any other way of living.

And then we created a household budget. By the end of the year, not only had we paid off the last of our $30,000 debt, but we spent the first week of December floating along crystal waters in Nicaragua for our first vacation in five years. And it didn’t even go on our credit card.

But of course, there is a flipside to that too. When 2015 rolled around last year, I set exactly one goal for myself (well, ourselves): go on vacation. Michael had his own: pay down our debt. And to my genuine surprise, we did both of those things. But let’s be real for a second. That meant there was a lot of stuff we didn’t do in 2015. We didn’t go home for the holidays. We didn’t get a puppy. And even though I talk a big game, I barely even let my hair down in Target. Instead, we committed ourselves to doggedly paying down our debt and saving up for our vacation. The end.

But here’s the surprising part: sacrificing those things didn’t feel like sacrifice (I’m not here to tell you that you need to martyr yourself to your savings account). It was liberating. Instead of feeling like I was telling myself no to the things I wanted, I felt like we were steadily moving toward the thing we really did want. And avoiding distracting short-term gratification along the way.

Mind, Body, Wallet

Without realizing it, my experiment with YNAB started seeping into my personal life. Spending our money intentionally meant I also had to start spending my time intentionally. Which is to say, once I started thinking critically about what we could afford financially, I also started thinking critically about what I could afford emotionally. For example, while I love my family, flying home for the holidays every year is a draining experience, emotionally, financially, physically. In years past, I probably would have figured out a way to make it work, justifying that if we had the time and money, of course we should do it. But this year? This year I added my emotional energy to the mix, and realized that I just didn’t have enough reserves left over to afford a trip home during the holidays. And while it was a bittersweet decision (I miss my family, y’all), it was nice to come out of APW’s annual holiday break feeling relaxed for once.

I think this is the lesson I’ve been failing to learn these past few years. It’s not just about giving myself the goal of “balance” and hoping it will all work out. That’s like saying, “This year I’m going to save money,” and then not doing the work to make it happen. Instead, I’m having to relearn how to prioritize, to see everything in its holistic form. Now, instead of looking at my calendar or my bank account and assuming that whatever I can see with my own eyes is up for grabs, I’m trying to look further down the road at my long term goals and learning how to budget downtime and savings in advance so that they’re there when I need it.

And while my gambler’s blood still likes the thrill of a “will I make it or not” adrenaline rush at work (where, blessedly, I have the structure of a business to keep my impulses in check), I’m trying my damnedest to eradicate it from my personal life. Why is why my word for 2016 is “value.” This year I want to learn how to value not just my money, but my time, my energy, and all the other finite resources in my life. Because most of the time? The stress and anxiety of the gamblers high are too distracting to actually enjoy your winnings. And vacations are supposed to be relaxing, y’all.

YNAB_logo

This post was sponsored by You Need a Budget. YNAB is a powerful yet flexible tool for managing your finances, and has radically changed the way our marriage approaches finances. Which is exactly what it’s designed to do. With the YNAB method, there’s no ignoring what you’re spending. All of our regular and recurring expenses are budgeted in advance, so we’re able to see at a glance what kind of money we have for incidentals and make plans for a safety net. As a result, with YNAB we were able to pay off over $30K in debt in just two years while saving up for our first vacation in five years. YNAB just released a brand new version of their software that lets you manage your finances from your computer or your phone, plus sync up your bank accounts and credit cards for real-time updates to your budget. Click here to learn more about YNAB and download a free thirty-day trial. Thanks YNAB for making the APW mission (and my vacation) possible.

Maddie Eisenhart

Maddie is APW’s Chief Revenue Officer. She’s been writing stories about boys, crushes, and relationships since she was old enough to form shapes into words, but received her formal training (and a BS) from NYU in Entertainment and Mass Media in 2008. She now spends a significant amount of time thinking about trends on the internet and whether flower crowns will be out next year. A Maine native, Maddie currently lives on a pony farm in the Bay Area with her husband, Michael and their mastiff puppy. Current hair color: Purple(ish).

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  • I’ve been meaning to do the free trial for like, a year now. Finally signed up this morning. Thanks for the kick in the pants Maddie!

  • Laura C

    I’m still not doing YNAB, but the part about seeing yourself as a limitless resource really struck me, because it’s how everyone describes my husband’s late father. One of the stories they tell is about the time, early in his marriage, he went home from vacation a few days ahead of my MIL, and he was supposed to pay the rent when he got home. They had just enough to pay the rent. My MIL gets home and instead of paying the rent, he’s bought a piece of art. Why not? The art was pretty and he can always make more money.

    The thing is, he could always make more money, and did.. But we can’t all just say “oh, whatever, I’ll make more,” which is something my husband has had to adjust to as an adult. And whenever he thinks there is money, there are like 10 Michelin-starred restaurants he wants to go to, because that’s how he grew up. So it’s a constant balance. (I will say, asking for restaurant gift cards for Christmas and birthdays has been so helpful, because living in a smallish apartment and moving a lot, we don’t want so much stuff anyway, whereas a night out is almost always welcome.)

    But we had a financial milestone last week! My husband has been mostly using my credit card since we’ve been serious enough for me to put him on my account, because I have a Starwood card and the rewards are so good that we want to use it for all our charging needs, and because early in our relationship, when he first tried to get a credit card in his own name rather than continuing to use his mother’s, he didn’t qualify for any very desirable cards. So I’ve been concerned that he just didn’t have much of a credit history in his own name, but last week we decided we should have a non-AmEx rewards card (especially since Marriott bought Starwood and who knows what’s going to happen there), and we picked a card we wanted and I thought hey, let’s find out what his credit score is, because if he could get a better card in his name, that would be great. And his credit score was nearly as good as mine! Turns out, what we’d been forgetting was that we paid off all his federal law school loans in record time, and that kind of thing will help your credit. (We still owe his mother a bunch, but that doesn’t show up on our credit.) So in contrast to five years ago when he could only get a very basic card, he was immediately approved for the card we wanted. It felt wonderful. (And I should be clear: we pay off our cards every month. It’s not that we want to charge more, it’s just that we want a non-AmEx, non-Starwood option.)

    • another lady face

      That’s awesome! I have been loving the new ‘credit karma’ commercials where it shows why ‘typical millennials’ should know their credit score and get credit reports and attempt to improve their credit! It may actually surprise you. My husband and I were also shocked to find out the his credit and our combined credit were actually pretty good. We thought that we were going to get royally screwed because of debt totals. But, he/we had been paying it off on time for years, so it was actually a boost to his credit score. Once we knew, it moved up our timeline for looking for and buying a house because we knew we could do it and not have astronomically high mortgage rates! More power to knowing your numbers and having real data to go on!

      • clairekfromtheuk

        If it’s the same as the UK, it’s not about how much you owe but whether you pay on time and the right amount. Having some debt that you are treating properly is actually much better for your credit score than not having any!

    • Ashlah

      Woohoo! I love credit victories! If you haven’t checked out Credit Karma, definitely do! Free credit reports and scores, no catch. They just have ads on their site for recommended credit cards.

  • Amy March

    I’ve been doing a lot of work on actually having priorities. Not just saying “oh this is my priority” but then doing that thing first, letting other things not get done as well because they aren’t the priority, evaluating decisions in terms of whether it helps or hurts my priority goals. Both big picture (save more money for travel, get in better shape), and day to day (like, this weekend, number 1 priority is taking down the Christmas tree because it is well past time). And it is a constant learning curve! Like, what do you mean I have to wake up and workout at 6am if I have plans after work? But it’s feeling really good to know that other things (ummm my closet) are not a priority right now and not feeling guilty about getting to them.

    • Amanda

      Are you in my mind? Because that’s something I also want to work toward this year. I think “I need to exercise more!” because, I do. But then I let a million things get ahead of it, and it feels good-ish to get those things done, but I haven’t worked out in a week because life? Doesn’t quit. I like your approach, I’m going to steal it and see if I can get past just -writing- that I’m going to work out and progress to actually doing so.

      • Lisa

        I find that I also need to set really specific goals for myself. Nebulous “I need to work out more” doesn’t work for me so this year I’m giving “I will go to the gym 2-3 days/week” a shot instead. I’m also trying to apply this to another resolution (“I want to get back to reading more”) by making it more specific (“I will read at least one book a month.”).

    • Danielle

      I really like Stephen Covey’s priority matrix for helping decide what to do and when. Here’s a brief and fun explanation: http://sidsavara.com/personal-productivity/prioritization/nerdy-productivity-coveys-time-management-matrix-illustrated-with-xkcd-comics

      Basically, you can divide activities into urgent/not urgent and important/not important. Most people spend time on urgent, unimportant things and waste time on not urgent, not important things. But it’s best to spend time on not urgent, important things — like your health!

      I use a priority matrix app to track my activities (like a to-do list), but a simple pen-and-paper sketch could help too.

  • M

    My husband and I are both naturally pretty thrifty, but we don’t have any system in place to track our saving and spending or save more intentionally. I’ve been wanting to try YNAB because, even though we live within our means now, I would like to have some vision of what our finances will look like if we decide to have kids or buy a house in the next few years. My husband doesn’t want to keep track of things that closely, since we are doing fine and have a chunk of money in savings already. We don’t necessarily need to change any of our spending habits, but I would like a little more structure and intention for our finances. Is anyone else in a similar situation? Have you found a system that works well to give some structure without being as hands on as YNAB?

    • another lady face

      We have cobbled together a system of using mint.com and online banking to track our spending and accounts (not all of our local credit union accounts work with the big names for financial programs). We also have some old school type of spread sheets for budgets, spending plans and debt payment calculators. And, we have automatic savings taken out of our accounts right after we get paid to help with the actual savings goals. We have been using the ‘cash envelope’ system for spending money off and on for a few years and need to get back to that again. We tend to just over-spend in areas and not realize it. With the cash /envelope systems, you can’t really do that unintentionally. I feel like YNAB is similar to having ‘envelopes’ but on an electronic and high-end scale.

      • NotMarried!

        YNAB is similar to having envelopes, but the budget allocation process is more robust. Before YNAB, I used EEBA (now goodbudget.com) which is truly more of an electronic envelope system.

    • Ashlah

      I/we started using YNAB a little over a year ago in a similar situation. We were doing fine, had no trouble paying bills, had decent savings, but I just felt like things could be better. And they truly have been. Spending/saving money intentionally is exactly what YNAB has given us. Rather than spending whatever random amount I feel comfortable spending and saving (for what?) whatever amount was left over, I make a conscious decisions about exactly how much I want to save and exactly how much I want to spend. It’s been a drastic change for me, even as someone who has never had major financial struggles.

      • Ashlah

        Also, it makes me way more comfortable with future financial changes. Because I know *exactly* how much money is going various places, I also know exactly how much wiggle room we have to add in other expenses, and I know where that money will come from (i.e. what changes we will have to make to fit it into our budget).

        • Lawyerette510

          Very good point. My husband is thinking about applying to a school to learn to code, and I have confidence we can make it work because of the understanding we have of our finances thanks to YNAB.

    • Lawyerette510

      Similar to @disqus_SU83Haapqj:disqus, when we started using YNAB (about 6 months ago for us), we were fine, we had a nice-sized chunk of cash savings, we continued to have a little left over to add to savings at the end of each month, the debt we had was very low interest (notably lower interest than the yield our non-retirement investments), and were already saving for retirement. However, we had a lot of feelings around our money (mainly I felt like we were saving enough and my husband felt like we were spending more than we needed to be and neither of us really knew how we ended up spending as much as we did at the end of the month). Using YNAB has given us transparency into our finances (I’m sure another tool like mint would have as well, it’s just that YNAB came so highly recommended around these parts and I liked not syncing with banks) and has resulted in our being more intentional and thoughtful about how we spend money, resulting in more savings. We don’t have any specific goals (other than a couch, which we could buy now but are trying to accumulate a little more towards in the next couple months rather than pulling from our savings account) but it’s nice to see the savings continue to grow, and we do have some savings and irregular spending categories such as “vacation” which gets a healthy dose each month because travel is important to us and “clothing” because while I don’t shop often, when I do it’s trying to find high-quality pieces on sale that will add to my wardrobe and last a long time (so they are usually not-cheap, even when on sale).

      Ultimately, using YNAB has meant a better understanding of our day-to-day finances and looking at them so regularly has meant changes in habits, such as increased eating at home or taking lunches to work and increased cooking with what’s left in the fridge and pantry before heading back to the market.

    • lottie

      I’m in the same naturally thrifty, no debt, chunk of money in savings category, and I started using Mint about 10 months ago. I like it because it requires little work after set up, but I get a clear picture of where my money is going (and can see trends from month-to-month). I think it’s ideal for those of us who primarily want information about finances rather than a budgeting system because it’s a little less ornery and a little more flexible than YNAB (e.g., you don’t have to account for every last dollar which, if you’re already naturally saving and don’t need an extra push, is often unnecessary and feels annoying…at least to me). For example, I don’t feel a need to justify, via budget buckets, why I unexpectedly spent more at REI this month when I know I have the money for it and I needed decent winter bike gloves. I’ve also found Mint useful for being able to think about fluctuating grocery/restaurant spending, since it gives me the data but don’t need to have feelings (good or bad!) about it.

      • lottie

        I should also add that I have retirement accounts and a “fun travel account” and a general savings account, and don’t really have any specific savings goals at the moment, but I like seeing the savings account increase in size, which is also why I like Mint. I can see the account grow but don’t have to allocate it for anything. When I have a major purchase (e.g. unexpected new computer need), I paid for it without a problem, but didn’t need a “computer account.” (Not knocking that for those for whom it’s helpful, but I think for some natural savers, it’s unnecessary and that’s fine too.)

        • Ashlah

          As a natural saver as well, it’s not necessarily that having specific savings goals/accounts helps me save more (though that might also be true), but rather that it helps me to then spend that money without feeling bad about it. If I’ve just been enjoying watching my savings grow with no defined purpose, it can be kind of a downer (for me) to lose a chunk of it, even if that’s exactly what savings are for. If you don’t suffer from that kind of resistance towards spending your savings (when it’s warranted), then a big generic pot of savings is perfectly fine!

      • Sara

        I like Mint a lot too. And I appreciate they allow for me to roll over the amounts as well for bills that maybe showed up late or maybe knowing I was going to buy a pair of nice boots means I have to cut into my February shopping budget.

  • Kara

    Last year, my word(s) were “make an effort”. I tried to be realistic in my goals (I set a really low bar). It took me nearly 6 months to start actually doing something about my goals last year, and bam, I actually started making an effort in the areas I wanted to change (career goals, check; physical goals, check; emotional goals, check), and more.

    This year, I’ve set some goals, and I’m already working towards them. This year, my word is “save”. Not only save $$, save my sanity, save my body (eating much healthier, actually exercising, making my own food, etc,).

    YNAB still makes my skin crawl (I can’t put my finger on why), but it’s awesome that it’s helped so many people!!

    • Lawyerette510

      Oh I like you rendition of “save” as word-of-the-year and all the different things it could mean.

      • Kara

        Thanks! It’s been easier to ask myself “what does this save me?”. Is something stressing me out, does this person help, what’s the real value/cost of doing this thing etc.?

        Good luck to you in 2016!

        • Lawyerette510

          Awesome! This year my word is “compassion” both for myself and others. 2015 my word was “move” and while in some ways it was really great, all that momentum resulted in focusing on getting my shit done and usually feeling irritated or resentful if someone at all slowed me down. By December 2015 I was efficient as all get out, but I wasn’t very nice and I got pissed really easily. So I’m trying to reclaim the parts of me that didn’t get nourished last year. Have a great weekend!

          • Kara

            Rock on! Self care is vital to overall well being. It sounds like you’re heading in a great direction for 2016.

            Have a good weekend, too!

    • lottie

      I just wanted to affirm that YNAB making my skin crawl feeling while also glad that it’s super helpful to so many.

      My focus this year is on kindness and generosity — to others and to myself. (The latter often being much harder than the former!).

      • Kara

        I’m so glad someone else feels the same way! Good luck in 2016. Be kind to yourself, you deserve it!

  • another lady face

    We don’t use YNAB. But, we use other similar services and have written (old school) budgets. Now that Christmas is paid off (mostly from savings from last year’s Christmas fund! woot woot!), we can work on the current/continued goal of paying down debt and saving for the baby. We paid off 2 smaller student loans last year (woot woot!) and are plugging away at the next 3 larger loans. Now, we need to start saving for the baby’s future daycare and the insurance deductible (we have until May). Time to kick it into gear!

  • Sara

    My goal for this year is to stop relying on credit cards so much, which directly ties into my frivolous shopping habits. A lot of my paycheck goes to paying the cards off, which leads me to be low in cash reserves, which makes me rely on the cards (endless cycle). I tend to feel ‘limitless’ as well – I spend the money on gifts or plane tickets because I can always have more money but this experience or adventure might not come around again. But at the same time, that’s short sighted and a product of me not following the boundaries I set for myself. There’s no reason to feel as though a sale won’t happen again – there’s always sales. This year, I’m learning the difference between NEED and WANT.

    • Kayjayoh

      My middle ground for this is to have my credit cards in my budget each month. Say, $150 each on Discover and Visa. That way I can use them for things, as is convenient, but I am less likely to send more on them than I can pay off. And as I keep track of them and notice that one is at $200, I cut the other one off at $100. Also, I am strategic about when I make purchases. “Well, I want this thing, but I don’t need it just now, why not wait until the 25th, when my new Visa cycle starts, instead of on the 20th when it will be at the end of a cycle?”

      It helps a great deal. It also helps that I don’t carry my cards with me in my regular wallet unless I plan to use them. They ordinarily live in a separate wallet that I keep at home.

      • Sara

        This is similar what I try to plan to do, but then I say yes going out to dinner every weekend. I need to be better about drawing a hard line and cutting off the spending when I see the budget reaching the top. Leaving them at home will help! Learning to say no will too :)

        • Meredith

          Oh the going out to dinner. I have a few strategies for this. 1. Switch to brunch. Cheaper and gets you up and out in the morning. 2. If it’s dinner, then either go for the “I can’t attend dinner but will meet up for a drink beforehand.” Before because then time limit will mean you won’t have more than 1 drink. You could also say after but know your crowd on this one. My close friends will most likely go to bed after dinner but some other friends would always be up for drinking the night away. 3. Join dinner but say, I already ate so I’m just going to have something small and order an app for dinner. You still get the social time with friends but aren’t blowing $40 on dinner every weekend. Don’t know if that will help but those are my strategies.

          • Sara

            Lately, I’ve been doing dinner and skipping the alcohol, but I kinda like the idea of doing the opposite! Depending on the place, the pricing could go in my favor either way. Its the combination that kills.

    • Violet

      I don’t know if this distinction will help, but I don’t think of the limit on my credit card as a limit on how much I can spend. It’s a limit of how much debt the credit card company is willing to let me have on their books. My credit card limit isn’t really about me, it’s about them. MY limit is what’s in my checking/savings accounts. I’m not completely ignoring my credit card limit (as a good limit/use ratio is good for my credit score, so obviously I want a high limit). But I don’t look at my credit card limits as any kind of “real” number to make decisions based off of. I’m actually not even sure what they are, these days; I never look at them. I do, however, look at my checking/savings accounts when I’m making spending decisions (or more recently, my YNAB allotments, but I digress). Does that help, or am I rambling?

      • Ashlah

        Same. The limit on my regular credit card is astounding (to me and my situation), and has no bearing on my reality and actual spending ability. I use my credit card as my debit card and pay it off constantly. It’s a super awesome way to get rewards and build credit. But I also have respect for people who recognize that they can’t use credit cards that way for whatever reason and find other ways to control their credit card (and other) spending.

        • Lisa

          This is the way we use our credit card, too. We use it as a debit card to purchase everything, get the rewards, pay it off each month. We don’t even have it listed in YNAB — we treat the card as if it is continually pulling from the checking account from which we pay the card bill. This way we can’t really overspend if we’re watching the budget because the money is already gone!

          • Ashlah

            That’s how I treat it in YNAB too! The “correct” credit card method always seemed far too confusing to me, and not worth it unless you’re working on paying off a standing balance.

          • Lisa

            I wish there was still an “Exactly!” button for this moment. Husband looked at the credit card portion and said, “Why are we carrying debt? We pay it off every month. Can’t we just consolidate that into one number instead?” Since I was just trying to convince him to use the thing in the first place, I was happy to concede cards to him, and it’s worked pretty well.

            I don’t know how well our method would work in nYNAB though since that pulls directly from bank records. That’s been one of my major hesitations in trying out the new system.

          • Ashlah

            Whoa, are you forced to pull bank records in nYANB? It’s always been an option, but I’ve never cared for it…

          • Violet

            They said they’re going to work on manual entry, but it’s not available yet… I’m definitely holding off on switching for a while (or indefinitely).

          • Lisa

            Oh, it is required?? I’m definitely planning to hang on to YNAB4 for as long as possible then.

          • Lisa

            I don’t think it’s forced, but that was one of the main selling points the company is pushing in regards to moving to nYNAB.

          • Jonaz Vaneryd

            No no, you can definitely use the new online YNAB without importing transactions from the bank. You can do *automatic* importing of transactions from the bank if you want to (and you live in the US). Manual *importing* of transaction files downloaded from the bank (that was available in the ”old” YNAB4) is coming. But you can always do manual *entering* of transactions in the web app or in the mobile app (and frankly, I find that easier). You’re definitely not *required* to use bank importing of any kind, it’s just a feature.

          • Ashlah

            Good to know, thank you for clarifying! I definitely wouldn’t use something that removed the manual aspect of it. I’ll probably still stick with YNAB4 for a while, but I’m glad the switch won’t be as dire as I feared :)

          • Irene

            Actually- this is how credit cards are handled in the new YNAB: transactions that are budgeted for automatically get recategorised for the CC payment. I.e. if you have 300 budgeted for groceries, then spend 100 on groceries + pay by your credit card, that 100 automatically leave the grocery budget and goes to the “CC payment” budget. Hence, if all your spending is budgeted for, (and you started with a paid in full CC) your CC balance will exactly match your amount available to pay it. There is a great video on this on the YNAB site published recently. Love YNAB!

      • Sara

        I think part of my issue is that I set a limit for myself (say $200) but there’s so much of a cushion (ie: limit is $2000) that I trick myself into thinking its not a big deal to go over by $20. And then that turns into $50, then $100 and before you know it, I’m way off the mark. Its the mental game that kills ya!

        • Violet

          That was totally me before YNAB too! I’m enough of a saver at heart that I never did it enough that I couldn’t pay off my cards in full every month. But what YNAB has forced me to do is say to myself, “Okay self, so you wanna go over by $20 on this shopping trip? Fine, but then you gotta take that $20 out of eating out.” And I go, “Okay, okay, fine.” Before, I’d just… spend the extra $20. Which as you say, a little here, a little there, it adds up!

          • Lisa

            One of the things I wish I could do on the YNAB app is budget on the fly. I hate seeing the red categories, and if I’m going to shuffle money around I wish I could do it right at the point of sale!

          • Violet

            Yeah, I never let a category be red. In that example, I come home, enter my clothing receipt and it deducts from my “Clothing” category. Now “Clothing” is red, so I put more dollars in it til it’s zeroed out. Now I’m overbudgeted by $20, so I subtract $20 from “Eating Out.” And voila, nothing is red! I hate red. You can get me to do basically anything by telling me otherwise I’ll see something in red. But I don’t do the mobile thing, so maybe you’re seeing red on your phone until you can get to your computer to move dollars around? Is that what you mean?

          • Lisa

            Yeah, that’s exactly it. I enter all transactions in real time on the app so I hate having to carry around a negative balance in one category until the next time I remember to get on the computer and fix it. For the past few months, this has caused us to overspend some in our basic expenses (not a lot, something like $50 usually), which can totally be fixed, but it bugs me that this might not happen as often if I could move the money around right when I’m there looking at the app and thinking about it.

          • Violet

            Got it. I only update it on the computer (at the end of the day) so it’s all there at the same time. I’d be irked to realize I was operating off incorrect figures.

          • Jonaz Vaneryd

            In the new online YNAB and with the new mobile app that goes with the new online version of YNAB you can actually do that! When a category shows red, you can cover that ”overspending” directly in the app. Neat!

          • Sara

            Yes! One of the things I’ve recently been hyper aware of is how quickly that extra $20 here and there add up. I use Mint, and when I look through the transaction totals I’m surprised to find out how quickly I hit my food budget each month because Grubhub is not a cost effective dinner plan.

          • Violet

            Haha, we are one and the same. I always think “Oh, but I can have half my takeout now and half tomorrow, so cost-effective!” and then promptly eat all of it in one sitting. Womp womp.

          • Sara

            Ha! I do that constantly! “If I spend $15 on pizza, I could reasonably eat that for lunch the next two days. That’s like three meals.”

          • Lisa

            This is how I ALWAYS justify pizza buying. Pizza for every lunch every day of every week!

          • Ashlah

            Ha, isn’t that so depressing? But yesterday I immediately split my lunch in half and successfully saved the second half for today! Victory!

    • La’Marisa-Andrea

      I play a mind game with myself when I find myself spending outside of the budget on really stuff I do not need. I ask myself if I would rather have this thing I want to buy or this money in savings/ no credit card debt/ financial goal. This has helped me bc I have to confront myself with the actual consequence of my choice to spend whereas before I would just be like “ooh pretty shoes, must get.”

  • LJ

    I ironically had joined YNAB this morning before the post and it does NOT seem super intuitive. Maybe my mistake is joining mid-month and I need to start on the first of the month. Because it’s showing we’re in a huge deficit, but we’ve already paid off almost all the bills for the month with a fair bit left in our account, so then I can’t budget them this month? The handbook isn’t much help. But everyone seems to only sing the praises, so I feel like I must be missing something!

    • Lisa

      We originally started in the middle of August, and that month was really confusing for us. In hindsight, it was helpful because we were able to get used to the logging of transactions and working through different parts without worrying about messing things up too much. The second month, where we could budget everything and had a better idea of about what we would spend (took that half month and doubled it), went much more smoothly.

    • NotMarried!

      the trick is to budget the money you have on hand for the things that are due or you expect to pay for the rest of the month. So if you already paid your mortgage this month (I have) … you wouldn’t budget for it.

      See the YNAB forum discussing this here: http://forum.youneedabudget.com/discussion/17358/how-to-start-in-a-middle-of-a-month

    • Sarah E

      My first go-round I tried to log in a ton of past things, too. But the key, like Maddie says, is that YNAB looks only at the present and future. So you don’t need to budget for bills that are already paid. You’re only working with the money currently in the bank, and budgeting the income you still expect to receive.

      It might be more helpful to look at two months’ budget at a time, that way you can create all the categories you need to, but keep this month’s paid bills budgeted at zero for January, then budget the appropriate amount for February.

    • anonymous

      It is not super intuitive, BUT. Once you get it set up and get used to it, it is gold. I urge you to stick with it! And I do think it will help to start the next month afresh, so create all your categories, keep them at zero for January, then start recording income for February (the idea being this month’s income pays for next month’s expenditures), and work out your budget for February. Then you can start properly in Feb.

    • It’s a bit of a learning curve, especially if you are used to forecasting instead of just budgeting the money you have. Once you get into the habit of just budgeting what you have and trusting the system, it’s great!

      If you’ve paid most of your bills already and have a lot left over, then you would probably put money towards anything that’s left for the month and then you can either fund rainy day categories, put some into savings, throw some towards your buffer in a buffer category etc. You don’t want to enter previous transactions that have been completed already, you would just enter the money you have and then what it would need to pay for moving forward…. if that makes sense.

      I love talking YNAB so if you have any questions, I’m happy to help!

  • BDubs

    LOVE the photo of you guys at the top <3

  • Sarah E

    I’m really proud that we’re in a fairly comfortable financial situation right now. Yes, it has to do with starting YNAB this past year, but I’d be remiss if I didn’t mention the enormous help of generous family surrounding our wedding in May. As of last month, we officially filled up our emergency fund with 6-ish months of living expenses in the bank.

    This year, my financial goal is to figure out retirement. I really don’t know anything about investing. My husband has a leftover retirement account from his previous job before he went back to school, but I have no understanding of how best to use it. So doing taxes and looking ahead to some basics of long-term savings is on the list.

    As the CFO of a family with one grad student and one bartender/part-time jill-of-all-trades, I’m pretty freakin’ proud of myself. And not to bury the lede, but in service to futher securing our financial future, I recently earned myself a promotion at work, too.

  • Ashlah

    Curious to hear from anyone using the new version of YNAB. I’m not planning to switch any time soon for various reasons, but now I’m nervous to suggest YNAB to new people simply because it’s hard to recommend a product I haven’t used personally. I know the philosophy has generally stayed the same, but do you like the new web-based version?

    • Violet

      That’s exactly where I’m at with it. For the last four months I was telling everyone I knew about it. Now I don’t know what to say…

    • Miriam

      We’ve been using YNAB4 for about a year and signed up for the new YNAB to see what it was like. So far, it’s….good-ish. There are some things that are annoying-like you can’t see multiple months at one time and there are no reports (though they are apparently bringing those back). And I still don’t understand the changes to credit cards. But I do like that it’s web-based (no more glitchy Dropbox syncs), that you can set and monitor your goals, and that they got rid of that buffer thing that I never really understood.

      It does seem like there is a learning curve for the new version, which is a little annoying because it feels like we JUST figured out the old version. So overall, I’d say it’s mostly positive-but not ready to give it rave reviews.

      • Lawyerette510

        A lot of the reviews I’ve been reading elsewhere seem to say that the new YNAB feels like a full-priced public beta that wasn’t really ready for launch. Based on the number of times I’ve seen that, plus some other issues like the switch to a SaaS model (discussed in last week’s happy hour comments section), I’m just going to wait it out a few months. But that is a huge bummer for people who are just thinking about starting YNAB for the first time.

        • Miriam

          YES! That’s a prefect way to describe it. It feels a little like they HAD to get it out so they rushed it. It’s definitely not perfect. But it’s getting better. I really love YNAB and feel like it’s had such a positive effect on our finances that I want the new version to work. I remain optimistic that they’ll fix some of the things that aren’t quite right. But it’s sad that they didn’t wait to release it until it was a bit more ready.

    • pajamafishadventures

      I just signed up for YNAB free trial so I presume I’m using the new one and I absolutely hate it. Which really upsets me because I know so many people in real life and on the internet who have been using and loving it for years but I just can’t get it to work. I read the guides and watch the videos and then try to actually do the work and just in really basic terms of usability it’s not working for me.

      Which could be a problem entirely on my end, but that’s my experience for the past week. I know Minted uses an entirely different system but I’m liking it so much more because I can actually do things!

      • Ashlah

        Shoot, I’m sorry to hear that! And see, this is why it sucks that I don’t know the new version because I don’t know how to help :( If you want to give some more details, we can try! You might also check out the YNAB forum or even contact customer service. They’re usually really great, although I think they’re a bit overwhelmed right now so it might take some time.

      • Eenie

        Even the old ynab had a learning curve. Have you tried taking one of the scheduled classes?

    • Keeks

      I started using the free trial at the beginning of this month because we’re working on merging our finances. Honestly? So far I can’t say I’m a big fan.

      Part of the reason is that I’m not seeing the value in the web app – it seems like most of it I can build myself in Excel, which I know was an option with the old YNAB. Pulling in bank transactions is nice but I’m not convinced it’s $15/month nice. I’m also not sure that I want/need to track expenses at such a granular level, which is pretty much the whole point of YNAB… so maybe we’re just not philosophically compatible? I dunno, I’ll finish out the free trial period so I can say I gave it a fair shake.

      • Violet

        I don’t have the new one, but I do believe it’s $5 per month, not $15.
        https://www.youneedabudget.com/pricing

        • Keeks

          Good to know!

      • Katie

        I can see how I wouldn’t really like it if I was already pretty good with money. It’s not really about long term financial decisions, and more about everyday budgeting. By that I mean you’d need to go elsewhere to select your long-term financial goals, and then YNAB would be where you’d do the nitty-gritty of getting to them, for which tracking expenses on a “granular level” would be important. I used Mint for four years, which is SOLELY a spending tracker, and that did not help me in the slightest mostly because it required no interaction. I think of YNAB kind of like Weight Watchers for your finances.. you have to plan ahead, and then YOU have to write everything down in order to hold yourself accountable. To me, it makes the money I’m spending more real instead of a digital fiction.

        I haven’t switched to the new version yet, partly because we JUST got used to YNAB4, partly because I’m too lazy to devote the time, and PARTLY because I’m not sure how I feel about the app connecting to our accounts and automatically downloading the transactions. I really feel like NOT having that has been very beneficial.

      • Not Sarah

        I’ve heard people say that and their solution is to make less granular buckets in YNAB. You don’t have to use the buckets they recommend. You could do “Monthly expenses”, “Irregular fixed expenses”, “discretionary joint”, “discretionary spouse one”, and “discretionary spouse two” as your buckets just as easily.

        • Keeks

          Yeah, as the month has gone on I’ve made the categories less granular. I work as an analyst so I keep thinking about the best way to structure my data… Not too granular, not too broad!

    • I’ve had a sticky on my work computer that says “ask APW YNABers about nYNAB at Happy Hour” all week because I’m so conflicted. I think in a few months the nYNAB will be awesome, but now? Not loving it. You can still download YNAB4 I believe, so there’s that.

    • ccp

      I just switched and the major things are all the same. It’s actually easier for me to recommend this one because when friends inevitably ask “Does it have an app? Does it connect to my bank?” I can say “yep!” instead of “sort of” and “no you have to type everything in”

    • Katy

      I have used YNAB4 and the new YNAB currently and I like the new YNAB a little better. I really like the goals feature (i’m very goal-oriented), and once you adjust your mindset from “building up a buffer or x amount” to being able to budget your expenses further and further into the future to age your money it makes more sense. And as far as credit cards goes, they have fixed the issue people were discussing before, that YNAB4 makes it seem like you are in debt when you charge something to credit, but nYNAB auto moves the dollars your spent on the credit card- out of the appropriate category and into a credit card payment category. Also, a lot of people were upset about the inability to carry overspending into the next month. This is a philosophy switch, and if you think about it nYNAB is right. Also it is even cheaper than $5/month if you get the annual subscription I believe ($45/year not $60). I’m still in the free trial though, so can’t confirm how that plays out.

  • anon for this

    So a bit of a personal tangent, but I’m unexpectedly late with sore boobs and while I’m waiting to take a pregnancy test after work so my husband can be there, money is the main thing that’s keeping my mind spinning in terror. My husband and I are quite comfortable financially for our age (late 20s, he has a high paying job, I have a moderate paying job), but we haven’t even begun thinking about kids at this point and had planned on saving for ~*~someday~*~ (we’re newlyweds) but it might be here now. There’s a chance it won’t be an issue, but any words of advice on how to budget for a potential unexpected kid might calm my brain and I’d really appreciate it.

    • Amy March

      You’ll be totally fine! People have babies with no money all the time. Will it require adjustments and maybe so sacrifices and changes? Sure! But you can absolutely do this just fine. You are comfortable financially, you know how to take care of your finances, you’ve completely got this.

    • a prego lady

      Not the exact answer you are looking for (you might be jumping the gun a little bit) But, luckily, it takes around 8-9 months to gestate a kid. When they are first born, they are little and don’t require much. Then, you grow with them and so does what they ‘need.’ So, you have some time to figure things out, plan, save, buy all the stuff, sign up for daycare, etc.

      • anon for this

        I know, I obviously recognize that I very well might not be pregnant but the waiting is killing me and reading about how to budget for that scenario is what is keeping me calm in the meantime. This helps…I’ve literally never thought about the process. All I can think is ‘maybe baby = maybe LOTS OF MONEY WE DON’T HAVE? HAVE? OMG”

        • Kara

          I know you said you wanted to wait til you got home to take a test, but would it ease your anxiety if you say, ran out at lunch and took one? Or if you haven’t texted/called your husband to let him know that this is a possibility, maybe give him a shout out to “share” your anxiety?

          (I’ve never been pregnant, and don’t plan on becoming pregnant, so I have no frame of reference for this. I do care though :).)

          • anon for this

            So my husband and I definitely want kids, for the record, and we’ve both decided that, if it’s positive, we’ll embrace the change in our life plan with open hearts.

            But at this point, initially? I’m not sure what my reaction to a positive test would be…I could end up sobbing, pretty easily, just because it’s frankly a bit overwhelming…to say the least! So it’s really too much of a risk to take the test at work and without my husband to lean on, physically.

            Luckily, my husband and I have been in contact about this all day (and for the past 10 days, where we’ve been playing the ‘wait and see’ game…but our plausible deniability can’t really be upheld anymore) so that’s helping. And thanks! :)

          • Violet

            Not about budgeting (although, sort of, because of course money was part of my friend’s reaction), but I had a friend/coworker who become pregnant rather unexpectedly. She and her husband did want to have a child, but they weren’t financially where she wanted them to be. She definitely was panicked when she saw the positive test and stressed about money (particularly high child care costs). They got through it, they’re all thriving, her loves her son, and it turned out. All to say, you’re going to have whatever reaction you’re going to have, and that’s okay. She was definitely overwhelmed/not really happy when she found out. But things fell into place.

          • Kara

            Good luck to you both no matter what the result is! And you both have the right to feel whatever you feel for as long as you need (and feelings will change a lot :)).

            Internet hugs!

        • Danielle

          Good luck, girl. Keep breathing.

        • a prego lady

          It just helped me to realize that even if I was prego, I had some time to figure things out. Also, if this is the main stressor, plan to talk to your hubs about it whether or not the test is positive. Maybe start figuring out a budget to start saving for this situation in the future.

    • emilyg25

      The biggest expense for a baby is child care if both parents will be working. And health care if you don’t have insurance*. Aside from that, they really don’t need much! A place to sleep, something to wear, a car seat if you have a car, formula if you’re not breastfeeding. The nice thing about stuff for little kids is that it’s used for such a brief period that it’s super easy to find used for cheap.

      For child care, you can start looking into that now. I scoped out how much my work’s daycare cost before we were even trying because I needed to know what I was getting into. So I get it.

      *If you don’t have insurance or you have a high deductible, just giving birth can be hella expensive. Even with my good insurance, I was surprised to be billed about $350 for the hospital visit (we were planning on a birth center but ended up transferring).

    • Katie

      I’m 6 months preggo right now, and thanks to the Affordable Health Care Act, SO MUCH of your maternity related medical costs are 100% covered by insurance (assuming you have it. Which I hope you do for many reasons!). Even breast pumps. I will have a $175 hospital copay for my delivery, but that’s all I’m expecting to have to spend.

      Now, babies are like weddings. I think you can spend as much as you decide you want to. Ikea sells very popular, and super affordable, baby items. BUT Restoration Hardware ALSO sells very popular and NOT AT ALL AFFORDABLE baby items. It seems that any of the “stuff” you might need for a baby fits exactly that same pattern. Including child care.

      Child care is the biggest expense, but my employer has a Dependant Care Account benefit, which works like a Health Savings Account and siphons money off every paycheck, pretax, that can be used throughout the year to pay for child care expenses. My husband and I each signed up and are saving enough to cover 2016 between the two of us biweekly. So while that adds up to a lot of money, it doesn’t really hurt much that way.

      GOOD LUCK!

    • laddibugg

      I became ‘unexpectedly’ pregnant (I mean, not 100%, I know how to not get pregnant, and well, we weren’t doing those things). I’m not as stressed about money as I probably should be, though I am sure that my partner and I make considerably less then perhaps just your husband does. Are you up to your eyeballs in debt/spending? If not, you’ll probably be fine—there may be things you’d have to put on the back burner, but if you’re not running through your money like water I doubt a kid will break you financially.

  • Anonymous

    This is going to sound odd, but YNAB has helped me feel better about *spending*. I’m very anxious about saving enough, and often feel guilty about a nice dinner out, or buying a new dress. I used to argue with my husband, whose philosophy is “it’s fine to have a treat now and then, in moderation” whereas my brain argues, “do you really need that? that was expensive! now feel bad.”
    Having a budget means that I can figure out how much I’m comfortable spending in a very methodical way, long before the moment when I’m handing over my money — I budget starting with necessities (rent, BART, water, etc), then savings (we aim to save the same amount of our paychecks each month), then the leftover goes into our personal spending money, groceries, and eating out. Now, I don’t have to deal with the question of “should I feel bad about this nice dinner?” I just have to ask, “Do we have the budget for this?”

    • Ashlah

      I completely relate to this! I found myself spending more when I started YNAB. Not to a ridiculous degree (because that would defeat the purpose), but if I’ve budgeted $30 a month towards clothing, I’m not going to feel bad about spending when I find a shirt I love. I mentioned this in yesterday’s comments as well, but I started a short-term savings category in a way to kind of force myself to treat myself to bigger things I want. Otherwise, I feel guilty that the money could have gone towards household stuff (which is ridiculous and probably related to gender issues, but I’m just glad I’ve found a way to work through it).

      • yes to the short term savings category! I’ve got a couple of short term savings categories that I’ve created and I love them! Right now they are all kind of taking a back seat to the wedding savings, but it’s nice to know they are there and I can put money towards those things I want whenever I want to and then it’s bookmarked and I know I’m working towards it.

    • Sarah E

      Yes, yes, yes. I used to feel a ton of guilt over personal spending, or any kind of extra thing for the household. Compounded with environmental guilt, it was tough to reconcile steeper upfront costs to more sustainable items.

      Now, it’s in the budget and I can see clearly whether we have the money set aside for it. And with a “household” category in the joint budget, I’m not comparing buying a latte with my spending money to buying glass containers for the kitchen.

    • GBee

      I feel the same! I don’t use YNAB, but I came up with an amount I need to save each month for retirement, wedding, vacations, down payment, etc. So now when I spend money, I don’t have to think “ugh this could have been put towards our future house.” Instead, I am confident knowing that I already saved what I need for a future down payment.

    • omg YES. I have a really hard time spending money on things. First I was using it to pay down debt and then that was done and now… I have money for things and am coming to terms with the fact that I don’t need to just hoard all of my money and that if I spend some of it, I don’t need to feel bad about it.

      I went on an internet shopping spree and spent like $200 on clothes after not buying clothes for months and I still have that “eep so much money” feeling but… I could afford it and it’s fine and I needed the clothes so when I have that feeling it’s not as big of a deal, it just comes, I feel it, and then I can let it go.

    • Kayjayoh

      So much yes to this. It used to be that it would look like I had money and it felt like I had money, so I spent the money and then the next pay period and bill would come, and I’d find myself in the hole because I should have been setting aside some of that money. Which lead me to have serious anxiety about whether I could spend or not.

      With a budget, I can easily see, “Ok, I have $200 left over right now, but if nothing at all changes, I will only have $45 at the end three pay periods from now. Then I’ll be back to having $200, but I’d better make sure I don’t end up in the red during that one pay period. How can I adjust?”

    • Nell

      Wife and I were being very uneven in our budgeting before YNAB. I’d fret over every purchase on my Kindle, and she’d download 3 new books a month. Looking at YNAB, we really do have the money to buy books. And now I don’t feel guilty for spending my share of the entertainment budget on things like books and movies.

  • Miriam

    On unexpected thing that’s been really nice about using YNAB (and possible other similar systems), is that it’s helped be more understanding of my husband’s spending. Prior to getting started with YNAB, I always had this feeling that he was doing all the spending, and I was the super frugal one. Once we started budgeted and talking together, I realized that I also needed to own up to my spending. Yes in general I’m frugal, but I also was responsible for a lot of the Amazon spending and the primary reason we were spending oodles on groceries. Figuring out our budget each month, and talking through our priorities together has been great in feeling like we really have joint ownership of our money. Each of our priorities are discussed (even those that don’t seem important up front). And then we feel good with spending because the money has been budgeted.

  • YES. I could talk about YNAB all day. I used to stress about money and budgeting constantly, and now I look forward to budgeting as part of my Saturday morning routine.

    The game changer for me (aside from planning what I wanted to do with my money and not spending money I don’t have) was saving for those once in a while expenses that I KNEW were coming but somehow would always forget about. Wait a minute, you mean that something that is $600 and charged once a year can be saved for ALL YEAR, and not just in the month the bill comes up? MADNESS I TELL YOU.

    I even have a separate budget set up for our wedding spending and when I want to add money to it, I just pay it out of my regular personal budget and pay it into our wedding budget.

    • Ashlah

      Man, I wish I’d discovered YNAB before our wedding! There would have been a lot less stress about our wedding budget.

      And yes to budgeting monthly for yearly expenses. Even though I was never unable to pay those infrequent expenses, it still sucked having to shell out an unexpected (well, expected but unplanned for) chunk of change. But setting aside a smaller amount each month pretty much goes unnoticed.

      • Yeah exactly, I always made it work before… but now I don’t really think or stress about it.

        The thing I like most about the wedding budget is that with the reports we can see the spending breakdown and we have a VERY clear idea of what we are spending on. I also like that it’s not like the ones I’ve seen on some other wedding sites where it breaks down how much you should be spending on X category if your budget is X. That just doesn’t make sense to me for a wedding budget. I like that we can make our own categories that are as specific as we want and then we decide our own priorities based on the money we have.

  • Megan

    This may be slightly on a tangent… but does anyone know of any resources out there for methods used to save up for a wedding? I am unsure if I should be keeping it all in cash in my savings account for the next 18 months so it’s liquid and ready immediately or if I should be investing it in index funds as I would my regular savings… Does anyone know of any money blogs or resources that discuss this issue?

    • Violet

      We opened a high-yield savings account and kept the funds there. We linked it to our checking account, so as deposits and such came due, we transferred from high-yield to our regular account, then wrote the checks.

      • another lady

        we did this, too. we used capital one 360 (I think they are just capital one now) and my brother and his now-wife used ally bank. They both give a small % interest and are mainly online banks that can be linked to regular banks or ATM’s for quicker cash when it is needed. Capital one takes about 2-3 days to transfer the $ to my regular credit union accounts. That was fine for most wedding payments and the other places we were able to put down a smaller deposit then pay the larger amount a few weeks or months later.

      • Eenie

        Or maybe a CD if you know you don’t need the money until x date. Or multiple staggered CDs.

    • Ashlah

      I personally would not invest short-term savings like that. 18 months isn’t very long, and if the market tanks before your wedding, you can’t exactly just wait for the market to recover. I’d put it in a high-yield savings account (not that the yield is truly very high) so you aren’t taking on that risk. I would also suggest keeping it liquid because you’ll have expenses to pay throughout wedding planning, not just at the end.

    • Katy

      It is strongly ill-advised to put money you will need within 3-5 years anywhere other than savings. I know it seems like a waste of potential but you really don’t want to be stressing about the cost of a wedding and then hear new headlines about stocks going crazy, like they often are! Have fun wedding planning!

  • Yes, money questions in general, thanks for the prompt Megan. We’re looking at basically starting our retiremnent accounts. I currently have a small amount each month going in to a Roth IRA with Edward Jones. We’ve also been talking/working someone at AXA Equitable. My person at EJ warned me against AXA because they are also a life insurance company and there a percentage fees, that we may not see, that cause the cost to be higher. AXA is “flabergasted” at EJ because I’m in C share rather than an A. When I search online for EJ/AXA comparisons I only found one and it was in reference to working for the company, and the responses were negative about AXA. We like both of the people we’re working with, well I do, Matt has only met AXA and this is his first time looking in to saving for retirement and he would like to go with him because he has put considerable amount of time in to our meetings and suggesting a plans.

    So in short, how do you choose who to go with?! I’m at loss of where to start right now!

    • Ashlah

      One thing I can say is that A shares are generally preferred for long-term investments (like far away retirement). A shares have up front sales charges, but the cost ratio is lower. The cost ratio is kind of weird because it’s not a fee that you’ll ever see, but it affects the value of the shares. A shares also offer breakpoint discounts when you reach certain balances. C shares don’t have up front sales charges, but they have a higher cost ratio. In the longer term, C shares will generally cost you more than A shares.

      Here’s a good write up about share classes: http://www.bankrate.com/brm/news/dollardiva/20020110a.asp

    • yvanehtnioj

      If you don’t have a lot of assets, something like AXA is a waste of money, IMO. Read a few forums (bogleheads, get rich slowly, etc), start contributing to 401k’s up to the max, get your husband a Roth, and pick the mutual funds with the lowest fees (Vanguard, most likely). Those percentage fees to a money manager add up to huge amounts over time, and managed funds don’t have better outcomes than mutual funds. Don’t do it.

      • Ashlah

        Honestly, this is probably what I would do if I didn’t work for a financial advisor. Set up a couple Vanguard IRAs and invest in inexpensive mutual funds. I take advantage of an advisor because it’s free, but I don’t think I’d pay for management unless I had quite a large sum of money.

      • I had never even considered doing it our own… So don’t mind this likely, you should know this question, are the people I’m working with at both AXA & EJ money managers?

        • yvanehtnioj

          The AXA people are, or if they call themselves something different then they are the functional equivalent of money manages. They’re taking a percentage in exchange for their advice (or, and this would be much worse, for selling you their particular products — this is what your EJ guy was warning you against). Your guy at EJ might be a money manager, or he might just be someone who answers questions when you call (I can get help/questions answered when I call Vanguard, but do not invest in any managed funds).

          Since broad market-index funds are the best investment and small fees add up to big amounts over a retirement time-horizon, managed funds best avoided, particularly since you’re just getting a feel for investing. Also on a personal note, I’ve met with AXA people (because they set up the meeting in a way that made it seem mandatory at a new job), and they’re very high pressure, almost like timeshare salesmen. If you’re not sure you want to work with them I’d try to avoid meeting with them in the first place, because you might get pressured into something you’re not quite sure of, or that you don’t 100% understand.

    • Katy

      I agree about Vanguard. The importance of low expense ratio’s are so important. Also, if you want some guidance this is a good place to start! http://www.clarkhoward.com/beginning-investors

  • Laura

    A question for those who are already YNAB-ers: how does YNAB work for those of us who are pre-engaged? Ie living together with (mostly) separate finances, aside from rent and groceries? I like the idea of YNAB, but is it worth the investment (I know, I know, it’s not huge $ every month but every little bit in my wallet matters right now) for those of us without combined finances? Is there a toggle or setting that can accommodate for the non-marrieds?

    • Ashlah

      You can have as many budgets as you want! I currently have my own budget and our joint budget. My husband doesn’t use YNAB for his individual account, but he certainly could.

      Maybe if you give more detail about what your concerns are, we could provide more info?

      • Lisa

        I didn’t even realize that was an option! My comments can be completely disregarded then.

        • Laura

          These are all awesome tips! If I look at it honestly, my concerns (and more honestly, fears) are more aligned with combining finances/putting effort toward combining finances when I know my partner and I have different ideas about spending and actually, y’know, having to address those things rather than just ignore them and keep living our own “single” financial lives. However, tracking budget and really being on top of my own personal finances is important to me, so I think I’ll probably just sign up for YNAB myself, and see where it may lead in terms of finances with my partner.

          • Lisa

            I completely understand. Those conversations are the ones that are most difficult to have, especially when you’re a spender/saver mismatch. I had a difficult time convincing my husband to get on-board with YNAB originally, but he’s gotten into a good habit of entering all transactions at the point of sale now, which makes my job as primary budgeter easier in the long run. YNAB forces us to have ongoing conversations about our finances, and I feel that our outlooks on money are starting to align in ways they haven’t before.

    • Lisa

      I don’t think there is any great way that you could do “separate but equal” in YNAB. Theoretically you could set up your separate bank accounts on-budget and then create duplicate spending accounts (so you would have “Laura Spending” with clothes, household items, etc. and “Laura’s BF Spending” with the same categories) but share the monthly bills and pay the individual expenses out of your own portion of the budget with your own money. That might work for the meantime until you combine your finances.

      Another way would be to get YNAB, use it on your own to budget your portion of the expenses, and then when (if) you combine finances after marriage, you can add your spouse’s accounts into the budget and start budgeting together instead of separately.

    • Violet

      K, so we’re married, but still basically do everything separately and pay into the large expenses (rent, etc.) in amounts proportionate to our incomes. We each do our own YNAB budgets. So I budget for only my portion of rent, my partner for his. We have one joint credit card we use for meals out and such, and a joint checking that we use just to hold onto funds like rent money before it gets autodeducted from there. We keep a bit of slush in there so we don’t get a fee for a low balance, but we don’t use that money for anything. We leave the joint checking account and joint credit card out of our budgets. We do, however, label a category in our budget “Joint Credit Card Expenses” and we put money into that category in YNAB. Once per month when we pay the joint credit card out of the joint checking account, I enter in a transaction to the payee “Joint Card” for my portion of the joint credit card purchases. Thus pulling the money from that category.
      I’m sure there are other ways to do it, but it works for us.

    • Cleo

      I took the 9-day free YNAB email course to figure out my budget, then set up my own spreadsheet on Google Docs for tracking my spending and setting my budget. Every cent matters to me at this point, and my own spreadsheet allows me to easily do things like relegate money spent for work that will be reimbursed to a category that doesn’t count against my budget for the month, and access my spreadsheet on my phone so I can write down what I spent at the grocery story right away (having to open my computer to record spending wouldn’t have worked for me)

      Or whatever you need to do.

      I’m no excel wizard and happy to go more in depth on how I set it up if you’d like.

      • Laura

        Would love to hear more about your setup, I’m sure I’m not the only one!

        • Mer

          I also use Excel. Basically I use the 50:30:20 rule that is in Elizabeth Warren’s book. 50% of take home pay towards fixed expenses. Needs. Things that even if you lost your job, you’d still have to pay. 30% towards wants (which includes the purchase of larger things like vacation) and 20% to savings. Basically I have 2 categories and I classify every CC transaction or withdrawal/ transfer into wants or needs. Sum those 2 then subtract from my monthly take home pay and that’s my savings. The goal of a budget is to save a sufficient amount so as long as I’m saving 20% then I’m good. Doesn’t matter if I eat out once a month for 10x a month or buy clothes all the time or occasionally buy clothes. It all falls under wants. No small categories that have to be shuffled around. Just 3 different pots.

          The 50% for fixed expenses is more for stability and safety. It means that even if you’re income dropped by half, you could survive. It’s the recurring fixed expenses that really kills saving.

          I also the move all the finals totals to a one sheet and build a histogram automatically but that’s obviously not necessary. Though it looks pretty.

        • Cleo

          So, I have two spreadsheets: my tracking spreadsheet and my budgeting spreadsheet.

          Tracking:

          I have a table set up with the following columns: Date, Place (where I spent the money/how it shows up on the debit or credit card statement), Expense (what I bought), Amount, and Category.

          Category is the “high tech” part of my system. I assign each category of spending a letter (Groceries are G and Car maintenance/gas is C, etc.). So I categorize each expense, and then, there’s a chart to the right of my table where the expenses are automatically added according to category (the formula is pretty simple, where the letter in quote marks signifies the category: =SUMIF(E2:E200, “G”, D2:D200))

          I also enter in each amount I’ve budgeted per category on a separate part on the sheet, so I can easily keep track.

          I start fresh each month by duplicating the previous month’s sheet and deleting all the expenses out of it.

          Budgeting:

          Same document as tracking, different tab, larger spreadsheet.

          I have these columns:
          Month, Expense, Last Month Budget, Last Month Actual, Last Month remainder, Starting Budget, Budget Including Remainder.

          Month – the month I’m budgeting for
          Expense – the thing I’m budgeting for
          Last Month Budget – the budget I allocated the previous month for that expense
          Last Month Actual – what I spent on that expense last month (thanks to the Categories I set up, I just have to glance at my tracking spreadsheet to know those amounts)
          Last Month remainder – how much I have left (or how much deficit) from that expense (a simple Minus= formula (Last month budget minus last month actual) automatically calculates that for me)
          Starting Budget – How much of my monthly salary I’m spending on that expense
          Budget Including Remainder – the actual budget for that month (simple Sum= formula (last month remainder plus starting budget) automatically calculates that for me)

          And so I know how much money I have to allocate, I set up two cells: One that adds up everything in the “Starting Budget” column for that month. And a second one that subtracts everything in the Starting Budget column for that month from my monthly salary. No calculators, I just have to look at the second cell to see how much I have left to play with once essentials are taken care of.

          Once I set it up, It takes me about 30-45 minutes total to budget for the month. Let me know if you have any questions!

    • Amy March

      You don’t need a setting. It works fine for single people, which is what you are for the purposes of budgeting. You just allocate funds for your share of rent and groceries.

      If you both want to use the same budget even though you’re not sharing finances, I think that would be more complicated.

    • We don’t have combined finances so I’m just using it for mine. It works great. We still have all the rent groceries stuff worked out the same way we did before, you might just need to play with it a bit in the trial to see if you can work it out for whatever your set up is.

    • Not Sarah

      What we do for our joint expenses is to track them manually in a spreadsheet and then we both have our own systems for tracking our own spending. Once a year or so, we compare our overall spending in a spreadsheet to see where the different categories are. This made me feel much better about my boyfriend’s spendy habits and showed him I’m not as frugal as he thought I was – I was just spending my money in different areas. The first time we did that, we turned out to be spending about the same amount of money overall, just in different categories! So that was really eye opening to see the other person’s priorities.

  • Katie

    My husband and I FINALLY signed up for YNAB in September, after months of my talking about signing up for it, and after four years on Mint. It is AMAZING. We INSTANTLY became more comfortable with our finances, we talk about our financial priorities more often (like, at least once a week when we reconcile our accounts) and negotiate them, which is SO healthy and grown-up! We are far more confident in our spending, knowing that we have the money we’re about to lay out, and can enjoy whatever it is we are purchasing.

    As an example of how much YNAB has helped us, yesterday my debit card was declined at the grocery store, and I INSTANTLY knew our account had been compromised, because our budget still had plenty of money in it for groceries. A few months ago I would have assumed we’d overdrafted. The program was such a small amount to spend for finally getting to feel like a grown up.

    • Ashlah

      Yay success stories! Glad it’s working so well for you!

    • RJ

      What do you mean compromised – had you been hacked?

      • Lisa

        That is how I read Katie’s comment. She knew her debit card wouldn’t be denied due to lack of insufficient funds so she was able to get in touch with her bank immediately about the fraud.

        I had something similar happen with my credit card. My husband set up our joint card on his Apple pay, which apparently froze the card because his phone number isn’t the primary one associated with our account. When I went to purchase groceries later in the day and was declined, I knew something was wrong with the card even though I hadn’t been notified because I knew (from using YNAB) that we were no where near our limit and had paid the card off recently.

        • Eenie

          I just moved to Georgia and even though I changed my address at the bank my card gets declined at random stores. I’ll use my other credit card and it works. I walk out of the store and then chase emails me asking if it was a fraudulent charge. I’m hoping this has finally stopped!

      • Katie

        YES, SADLY. Ugh. Someone got ahold of our debit card number and wreaked some mild havoc. Fixing it was a whole other “feeling like a grown up” situation.

        • Ashlah

          How did that process go? One of the other major reasons I prefer to use a credit card for most spending is my understanding that fraud is easier to catch and fix than with a bank account. When my credit card was compromised, I immediately got a phone call from the company (to every number they had on file!) and an email. They just asked me to confirm the charges were fraudulent and then they were taken care of. I worry with someone getting access to my bank account that they could drain all the funds and it’d take forever to get my money back. How was your experience with your bank?

          • Katie

            It definitely could have gone worse. They didn’t drain our accounts THANK GOD. They, oddly, transferred all our savings into our checking account and then spent $1400 at target and had lunch at Panera. Across the country from where we live. So I guess that was enough to alert the bank, who immediately closed our debit cards. They did not, however, call us or alert us. I filed a claim, and we should get our money back within 3-10 business days.

            We’re trying to figure out WHERE they could have gotten the information, since we both try to use credit cards online as well. But, sadly, with stores getting hacked more and more these days (like Target) maybe restricting our online use isn’t enough.

  • Basketcase

    Good work Maddie!
    We roughly budget – as in we plan what our money should look like – but we earn well enough that we just float along most of the time. I’m hoping to change that this year. I’ve already started by doing a huge sell-off of higher-value stuff we dont need any more, with an aim of not replacing it because we dont have space / need for it.
    But its the little shops that cause me the most issues. Lunch here, afternoon tea there, a new top tomorrow. THATS what I need to learn to control better. The little bits of wastage!

    Might have to look into putting YNAB on my phone just to track my *personal* spending budget (rather than trying to get the family income onto it, since Husband rocks a spreadsheet for that), so that I can be personally accountable to myself.

  • Erin

    Man, I have been doing the same thing for a long time (except bolstered by credit cards which I just would do balance transfers on). So far one of the best things about deciding to marry my partner of 11 years is that it has meant that we’ve really sat down to talk seriously about finances. Not that we haven’t in the past, but I think we both just gave each other space and didn’t want to mess around in the other person’s business. The result for me is that I actually froze my credit cards in a block of ice and in addition to trying to save for our wedding in May, I’m spending no money so that I can finally once and for all get rid of my debt in all its forms (credit cards, lending club loan, student loans). It’s been really challenging to not just get real with my partner, but also to admit that I needed both of us to change our lifestyles in order to make this happen. Luckily for me he’s been 110% on board. So zero meals/lunches out, bar nights (if they happen) I drink nothing but cheap can beer and my limit is $20, and no shopping other than groceries.

    What really helped me was doing more than just using Mint (like YNAB) to create a budget and track spending, but to really commit to NOT spending. We’ve been reading the Mr. Money Mustache blog mrmoneymustache.com (silly name, I know) and while something like financial independence is still a relatively distant dream for me, a lot of his tips have been really good for wrapping my head around this lifestyle change that we’re making. A lot of the things he advocates as cost-cutting ideas are also general good health – making all your own food, walking/bicycling, less driving, doing your own work around the house – and are things that we already were focused on, just not really always achieving from a financial point of view.

    Funnily enough, even before we got engaged we’d been talking about starting a savings account that we could use for travel and what not. But it wasn’t until we got engaged that we actually started a shared savings account. We’ve been putting an equal amount aside each month for the wedding, and have decided that once the wedding costs are totally paid off, we’ll figure out how we want to direct that money and continue the practice.

    I really didn’t expect getting engaged and planning a wedding to be the thing that was going to finally shift me into being really financially aware and aggressive, but it’s a pretty awesome side benny.

  • Jazz

    Thanks Maddie!!! I’m an oldest child with a gambler’s problem too ;-) lol… I NEEDED THIS!! #VALUE