When people set out to “do their budget” they go about it with an approach that is just completely counterproductive. It’s rigid. Formal. Stifling. Ineffective.

One of my favorite board games is the old classic Risk. Great family fun guaranteed every time.

If you want to win in the game of risk, you need to possess one attribute in spades: adaptability.

Yes, you have a plan. And once you see how the other players are placing their armies, you move to your second, third, fourth… eighth plan. If you’re sitting there from the get-go saying North America is yours regardless the cost, regardless the surrounding circumstances, regardless what happens to you from externalities…you’re hosed.

We do this in traffic to. We’ll have a plan B. “Hey, take Mill, but if it’s looking bad we can always head south on 16th and then back over on Washington.”

We do this all the time. It’s a built-in survival instinct perhaps.

But when it comes to money, we have this other emotional side of the equation that is just absolutely insane. Financial academics that study investors continually prove again and again that investors aren’t rational, and that we make completely insane (read: stupid) decisions when it comes to money, how we deal with loss (and gain), risk, etc.

Out of the box, we’re also equally poor at budgeting.

You’ll sit down and begin to build either one of two budgets:

1) The Castle of Fairy Godmother Perfection, with you perched on top. If everything goes right this month, absolutely everything, then you’ll stay on budget. It will be the first normal month in your entire history of adult existence. It’ll also be the first normal month in the history of mankind.

2) The Alcatraz of Unrealistic Miser-y, with you locked inside. This is the budget where you’ll lose 10 pounds because you’ve budgeted $120 to feed your family of four with the main plan being to fill up on complimentary coffee creamer while at work.

In both of these unrealistic scenarios, you’re going to fail. The main reason being that you’re not coming at your budget with multiple plans — just one all-out-this-better-work-or-I’m-never-trying-again-plan.

Listen. You’re the Commander in Chief. Your money salutes you. Tell it to do what you want, but be flexible. Recognize that there are no normal months, that you do have to eat, and that you will go over-budget in a few categories pretty much every single month.

Do I lock my sites on the strategically-superior location of Iceland (in Risk) and just go after it with tunnel vision until I either finally get it (at what cost?) or fail? (At what Cost?)

One of YNAB’s great strengths as a piece of software is the extreme ease with which you can shuffle money around. It was meant to be shuffled. Flexible. Adaptable. That’s what will keep you in the game for the long-haul!

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