Here’s the latest Whiteboard Wednesday. What we discuss:
- A “normal” person’s cash flow situation.
- The “dip” (not Seth Godin’s).
- A YNABer’s cash flow situation operating with a Buffer
- How Rainy Day Funds move the YNABer even close to a state of cash flow bliss.
As requested, I went with a YNAB t-shirt. If you’d like to purchase one so you can be the center of virtually any social scene, you can do that here.
You know, it is too bad these rules aren’t instinct. I pretty much live by them now, but I was Example One for years. The stress didn’t really get to me too much- but only because I figured I had mastered the art of Timing The Bills- and that was “bliss”.
From my first job at 16 , there was some built-in voice that told me that you must get that next raise- that you need to find the better job that pays more. I think a lot of people chase that continually, like I did. While upping income is great, once you reach the cash flow to cover necessities- I’m confident that following these rules will bring more peace than just chasing that next raise or the next job.
There’s certainly nothing wrong with those things, but I know plenty of people making below median salary who are far better off than people making well above. They simply aren’t worried about where the money will come from- because it is already there. They don’t have huge credit card debt taking away that extra cash. Managing cash flow has made far more of a positive impact on me than any particular raise along the years. It is hard to get people to see that unless they try it themselves- that instinctual voice can be pretty loud!
This was a fun little reminder of my life before YNAB.
I am a senior at UC San Diego, married, $40,000 in debt (I would be about $30,000 if I had YNAB from the start), working full time as an EMT, and YNAB has allowed me to understand my spending, stay one month ahead, (I keep most of my loans which come in lump sums in CDs, and about one months worth in an ING savings account). I transfer in from that savings account after my second paycheck, but all that money is for the next month.
I used to use credit cards when unexpected things came up or my loans ran out, but have since cut them up and am paying them off (budgeted of course). I have categories like “books” which I put $100 a month into, and every 3 months when I spend $300 on books, I have the money to spend, no credit. Better yet, some of that money was earning interest before it came in.
I handle the money in our family, but now that I have YNAB, that basically means sitting down with my wife once a month, talking about where the money is going, and giving her $50 cash for “No questions spending.” I have finally convinced her to use the debit card for everything, and not to worry. She has stopped calling/texting me to check if she can buy a sandwich since she didn’t have time to pack a lunch. No more stressing because her teacher is making her buy goggles for class. Nothing. I enter all the bills/spending as I pay them, and check my bank records casually to make sure they match up. Money management takes a TOTAL of about an hour a month. No stress.
Keep up the wednesday whiteboards. I love them. And I am getting the shirt with my $50 a month. I would also be interested in hearing anything geared towards students living on loans, an/or paying off student loans. Thanks!
Hi Jess
The look is great, and you made my week, by implementing both of my suggestions so quickly. Thank you for making me feel good. Trust that you felt good as well.
I haven’t got to Rule 1 yet, but have got some of Rule 3 in place. My duaghters birthday party will be paid in cash, and it is not a stress, because we saved for it as a rule 3 fund.
Birthdays are easy to predict. I also know that they are easy to overspend on.
Saved the money, drew out the cash into an envelope. Now staying inside of the agreed amt. That is bliss. :)
Hi Jess,
Thanks a 1,000,000 for the Whiteboard Wednesday.
Quick question, where is the best place to manage this cash flow which is now always positive? Saving for property taxes, xmas, insurance, etc. adds up over 11 months.
Currently I am using my bank but the interest rate is very small. I also transfer money back/forth to a Vanguard money market account in timing with those large annual bills.
Is there a better way?
Thanks In Advance
Jessie,
It’s so great that you do this for all of us every week. Although I have been using YNAB now for a couple of years, its great to actually see it, and these help my husband understand, as he’s a much more visual person than I am. Loving the shirt. You looked really uncomfortable in last weeks outfit. Thanks again.
I really enjoy your Whiteboard Wednesday. I enjoy you tips that can strength our financial futures and live in happiness without the stress. Living by the 4 rules of YNAB is bliss.
I am so glad I switched to YNAB. Before YNAB, I was always looking in a rear view mirror. Know I can see my family future financial growth which is bliss.
Thanks YNAB for your support of a great product.
It’s definitely a stress reliever to be living on last month’s income and not having to worry about timing bills with paychecks and worrying about not going negative each month. We’re debit/cash only spenders and couldn’t be happier.