Please note this is not our budget. It is a screen shot from the YNAB website.
If someone had told me a year ago that I needed a budget or that setting one up would have helped me, I would have laughed off that idea. In fact, my husband did try to make me analyze our spending every month and I brushed it off.
We have various savings and investments for retirement, college, emergencies, and all sorts of fun. We don't have non-mortgage debt and we don't spend more than we make. We both feel pretty secure financially and that we don't have much to worry about.
Why in the world would we need a budget? Budgets are for people paying down debt and learning to live within their means, right?
I finally caved, if only to show David how pointless a budget is. But guess what? Now I can go in Target and leave only exactly what I came in for. You don't hear many women say that, do you?
Now that the Target miracle has your attention, I'd like to show you what we use and how it works.
I decided to try You Need A Budget (YNAB for short) because it's very user friendly and you can use it on phones and iPads when you're on the go. Your data is also kept in your Dropbox account and on your desktop/app instead of their system. The only downside is that you manually enter transactions instead of the software pulling them from your bank and credit cards - but that's actually safer in the end, so I don't mind sitting down once a week to do it.
The first step is setting up a budget. I used most of their given categories shown above and entered things like Georgia's ballet/cheer, dog grooming, and things I'd like to save for, like a new living room rug.
After inputting your account balances and income, you simply allocate your money to the different expense categories. YNAB will tell you when you've spent too much imaginary money by having you move it between categories until you are 100% within your income.
Each time you enter your spending (sometimes I enter our receipts individually, but usually I just do one upload for the whole week) and assign each transaction a category, you can see how much you have left for the month. Easy peasy, right?
There are times ahem when I spend more than I've allocated for my personal spending. That's when I "steal" some from the dogs and just don't have as much to spend on myself next month. YNAB makes you make up for overspending in the future months.
I also let the "home decor" balance roll forward each month until I have enough for what I want to buy. And when our electricity, grocery, or other category spending is under budget for the month, I either move that to savings or dining or let it roll forward to balance a higher spending month.
How it has helped me
I walk in Target for a couple of things, get distracted by something cute or useful, then have to think - do I want to save for that rug or have an extra dinner out, or do I really need this Nate Berkus picture frame?
Do we want to grab Chick Fil A for a couple drive through lunches, or would I rather us all go out for Brooklyn Pizza this weekend? Do I want a milkshake or will a little bowl of ice cream at home do?
I'm much more conscious of what I pick up on a whim, which has helped us accumulate much less junk.
When we decided, on a Wednesday, to fly to Colorado that Friday night to celebrate Halloween with friends, we were able to decide, as a family, to do without some other fun stuff and shopping the next month in order to avoid dipping into our vacation savings to cover it. (We found a super bargain on last minute flights, which made that possible.)
The YNAB website has all kinds of video tutorials on using the software as well as getting you started on a budget, if you've never made one. And you can definitely email me if you have a quick question or need a sounding board.
You can try it for free for 30 days to see how you like it, and I bet you will! Use this link to sign up - if you end up buying a YNAB account, you will get $6 off. Your payment is a one time fee, a really good deal.
Do you have any favorite budgeting or spending tips?