2: Budgeting for a Life You Love: An Introduction to YNAB
What if budgeting wasn't about restriction but rather, a powerful tool for financial freedom? In this episode, I'm introducing you to YNAB (You Need A Budget), my favorite budgeting tool that has helped me and countless clients transform how we look at our money. We'll explore the four rules that make YNAB different and how you can use them to stop living paycheck-to-paycheck and start building the life you love.
Today, I want to talk about a word that might make you cringe, but that I love…that word? Budgeting.
What words just came to mind when I said that? Restriction, sacrifice, never being able to buy what you want?
But what if I told you that budgeting isn't about giving things up? It’s actually an empowering tool that can help you take control of your money and build the life you've always dreamed of.
Ok, so I know, it sounds crazy, but I truly love budgeting. For me, it's not just about crunching numbers; it's about knowing where my money is going, and making sure that aligns with what is most important to me, and then using it as a tool to achieve my bigger goals. And today, I'm going to introduce you to the ultimate tool that helped me and dozens of my clients do just that: YNAB.
YNAB isn't your average budgeting app, and I’ve used a lot of budgeting apps. I actually started budgeting way back in the day with a simple spreadsheet I made myself because everything else I found didn't work for my situation.
But YNAB It’s a completely different way of thinking about your money. While most tools just track your past spending, YNAB is a "zero-based budgeting" system that focuses on only spending the money you have in your bank account, right now. Not what you expect to get paid next week. Only what you have today. It helps you plan for exactly what you need to spend money on before you get paid again.
Another way I like to describe it is in the old way of budgeting vs the new way of budgeting. With the old way you’d sit down on the first of the month…
The entire system is built around four simple, powerful rules. And while YNAB has shifted away from the concept of rules, the concepts still apply. I’ll link to two blog posts for more about this.
Rule 1: Give every dollar a job. You literally tell every single dollar in your bank account what to do. Not more than you have, not less, only what you have.
Rule 2: Embrace your true expenses. This is about accepting the costs you actually have. Things like your Costco membership that comes up once a year and you know how much it will cost and when it will bill, but odds are you probably forget by the time it rolls around again, right? Or something like car maintenance, which comes up, usually at the least convenient times. But with YNAB, you are prepared, so when it does come up, it feels like just another day in your budget and doesn’t derail your progress completely.
Rule 3: Roll with the punches. Let’s face it life happens, YNAB is flexible enough to let you make adjustments in real time, based on new information. So again, instead of putting your budget away and looking at it 30 days later, YNAB is meant to be interactive. You should be looking at your budget regularly so that you can make adjustment in real time, whenever necessary.
Rule 4: Age your money. The goal is to get to a point where the money you're spending today is money that you actually earned a month or more ago. This is how you break the paycheck to paycheck to paycheck cycle.
So, why is this method so effective? Well, for starters, it helps you stop living paycheck to paycheck. YNAB makes you confront the money you actually have in your checking account, not the money you hope to have in the future. This clarity allows you to make intentional decisions and build confidence in your money management.
Think about it like this. Let’s say you have a thousand dollars in your checking account and you think I have plenty to spend $20 on dinner tonight because I don’t feel like cooking. But what about the bills coming up? Rent is a thousand dollars, your car payment is four-hundred fifty, and you still have to pay for your phone, internet, and student loans. Not to mention gas and groceries. Without a plan, you could easily end up in the negative. YNAB shows you exactly where every dollar is allocated, so you know exactly how much you have for that dinner, if anything at all. It’s about being in control, not just hoping things work out.
Eventually you will get to the point where you rarely look at your actual account balance, because you’re looking at individual categories in YNAB instead. And then when you do check, you might be pleasantly surprised at how much is actually sitting there!
A few of my other favorite YNAB features are that it syncs in real-time across all your devices, you can always stay connected to your financial goals—even on the go. Plus, you can share your budget with your spouse or partner so you both can collaborate and finally be on the same page when it comes to money. And that is pretty incredible.
Budgeting doesn’t have to be confusing or stressful. By shifting your mindset and using a tool like YNAB, you can transform your relationship with money and build a solid financial foundation. YNAB helps you make every dollar count and so that you can truly achieve financial freedom.
So, are you ready to finally turn that financial frustration into freedom? Are you ready to stop worrying about money and start living with confidence? I would love to teach you more so I invite you to stick around! Hit that like button and go ahead and subscribe to my channel.
Then, when you’re ready, click the link in the description below to start your free trial of YNAB today! And then grab my YNAB Made Easy course where I will walk you through everything, step by step.
Look at it this way…you’ve got nothing to lose and a future of financial freedom to gain.
Thanks for listening! And remember: money should be a tool to help you achieve your biggest, wildest dreams. See you next time!
New episodes drop on Tuesday mornings.
Subscribe to The Money Clarity Podcast in your favorite podcast app!
