Hello YNABers!
Improving your cash flow can make a big difference in the quality of your financial decisions.
I discovered YNAB four years ago in the summer of 2006. While I paid all my bills on time, I was not controlling spending and ran up some credit card debt. One of the last purchases I made before discovering YNAB was a brand new riding lawn mower. I mow two acres of my four acre property. My older riding mower finally broke down, was not worth the repairs needed, and had to be replaced. I simply had to have a good riding mower.
At that time, I had no savings, no rainy day funds, and no emergency fund. My options were fairly limited. I could only see one – credit. Armed with nothing but a credit card, I marched myself over to the nearest store and bought a shiny, brand new riding lawnmower for about $1200.
I did not realize it at the time, but I could not afford this mower.
Enter YNAB.
I spent the next year getting a much needed wake up call. I shifted my priorities, stopped the bleeding and learned to live on less than I earned. Since that time, I have paid off all my debt, built up an emergency fund and saved toward a number of rainy day categories. But it wasn’t until recently that I realized the true power of having cash on hand.
Remember that new lawn mower I bought four years ago? That turned out to be a real lemon. It died tragically in the back field last September. Despite good maintenance and care, the engine seized. Way past warranty, I had to buy another mower.
But thanks to YNAB, things were different this time for two significant reasons.
1. I knew exactly what I could afford.
While I wasn’t planning on purchasing a mower, I was able to review my entire financial situation, decide how much I could afford and move some funds around. I knew this time that I could set an amount I could truly afford and then spend with no worries.
2. Having cash on hand afforded me better options.
The truth is, despite the fact that things are MUCH better financially, my priorities are different. I didn’t want to spend $1200 on a new mower. But that’s okay. With the help of my trusted mechanic, I spent a few weeks researching second hand mowers and just purchased a nice second hand mower that will do the job quite well! Because I had cash, I could not only shop on the second hand market, (NOTE: private sellers and yard sales typically don’t take credit cards), but I could negotiate! I was able to get my mower for less than the asking price, and for less than half of what I paid for four years ago.
Budgeting improved my cash flow situation considerably. Better cash flow improved my spending decisions. Better spending decisions improved my budget.
All of this has improved my peace of mind.
It’s a beautiful day here in the state of Maine. I think I’ll go mow the lawn.
Happy Budgeting!
Erin – YNAB Coach
So true, Erin!! While we’re not quite ready to save up for those big rainy day expenses, once our debt is paid off, we WILL be funding them. I’d much rather know how much CASH I have available to spend on something instead of just whipping out a credit card and not thinking about the impact that one act will have on me. Thank goodness for YNAB and all that we’ve learned by using this fantastic tool!
YNAB Rocks! Thank you, Erin.
I had a recent lesson to learn, fortunately, it turned out well. Usually I am one to get rid of ALL clutter, regardless of whether it is a working appliance or not. I just purge. Last weekend our “new” lawnmower died. This was the one that we went into $400 debt for two years ago.
My husband was able to take my dad’s lawnmower out of the shed and finish the yard with it. Even after 10 years of storage since my dad’s death, it still works much better than the two year old one.
So I am learning not to ditch everything, otherwise we might end up buying it all over again. I have no doubts that if we had not had that other mower, we might have “had” to make a trip to sears.
Whew!
Thanks Erin, I agree! Recently my refrigerator died. My first reaction was to go into panic mode. Oh wait, I forgot, I’ve been on YNAB for a year now. I have a pretty healthy emergency fund, and I thought this constitutes an emergency. I don’t have to panic. I went to 5 different stores, got a good deal, and PAID CASH!! It was an energy efficient model, so I qualified for rebates to help pay back the emergency fund. Seriously, I cried. YNAB has taken the “Panic Mode” out of my life.
Very inspiring article for us, new YNAB users! Thank you!
I hate to be all “down” on this success story, but in my opinion two acres of lawn is a ridiculous amount of grass to maintain.
If you add in your time (time being money) to just mow that thing, plus the water, fertilizer, weed killer, and now two riding mowers and gas to keep it looking good, I wonder how much money are you really spending on what is essentially a large “dead-zone” for the bugs that make the rest of your garden work.
Unless you have deep abiding passion for putt-putt golf, are on a flag football team, or are doing something like hosting tent revivals, I’d wonder how much of that grass is necessary? Maybe you’re mowing in between an orchard? Maybe you do that to maintain a view?
We’re really enjoying learning YNAB, but there is also a “bigger picture” of ways to look at your costs, and that included questioning how much of your time/resources are going to support things that maybe are an assumed “given” and/or a “marker of success”, but in reality aren’t working has hard as they could for you and or could be changed to reduce your cost in time and money.
As a gardener: you and all the other plants in your other two acres could well benefit by simply reducing the amount of grass you cut short in a smaller bit that you could do with a hand mower and letting that other bit even go to a twice a year mowing, which maybe you hire out as your time doing other things, (or in our house, arguing about who is going to do it) could be worth more: more time for you, more stuff to keep the pollenators busy, more things to draw birds to your yard..you know…stuff like that.
Not to be “flaming”, but just proposing a different way of looking at your problem.
@Knox,
I like your comment and proposal to Erin’s dilemma. I only mow a third of an acre (not including the house footprint) and I already think it’s too much grass ;)
I also like Knox’s comment. If a little harsh, it’s definitely true. Because we’ve been budgeting, we now have enough for a down payment, and a great little house became available 2 months ago. However, it sat on 2 acres, had a second floor (which we have no need for), and a whole workshop in a small shed. We didn’t need any of those things, and realized it would cost us not only an extra $30k for the benefit of having it all, but it would take extra time and effort to clean/maintain. So it was tough, but we didn’t move forward on it.
Now, I don’t regret it. Houses are up on the market every day, and I’m confident we will eventually find one that fits our needs. Budgeting is not only about your money, but about your time and energy too. I don’t enjoy mowing lawns, and I’d rather have the extra time to do things I enjoy doing instead of maintenance of a house. Again, it’s all about priorities.
Thanks for the story Erin.
Love stories like these! We’ve been on YNAB for more than a year. Our dryer went out a few months ago and although we have emergency funds and a few other “funds” laying around we chose to go without for about a month and save up for one out our regular budget. It was not fun hanging laundry to dry and/or using the laundramat, but we ended up finding an practically new dryer on a rather nice discount at a big box store simply because someone returned it. It works just fine and is still under warranty. With YNAB, I looked at our budget and knew in an instant that we could save for it in just a few weeks. Love this program!
I have only been a YNAB’er since mid-February, but I honestly do not know how I would manage without it now. Well. Yes I do. I was, financially, completely in the dark most of the time before I found YNAB. And even though I have about 3 years ahead of me (before I’m debt free) the stress relief from knowing WHERE I am with my money, what I can afford, and when has been huge. I am very much looking forward to the iPhone app release. YNAB appears to be completely unique amongst the financial budgeting offerings out there today. I was not looking for something to track elaborate investment and money portfolios – I wanted something to use to keep me on track with standard monthly expenses, to keep me aware of my budget limits at the grocery store and when meal planning, and something that was flexible enough to customize to fit various categories that I know I must budget for. YNAB has been a lifesaver for me. A financial life saver.
I was looking for a software like YNAB for a long time. Hope it will help with my budgeting too. Thanks!
Thanks for all the comments folks! It’s nice to hear YNAB working in a similar way for others. And @knox: Point well taken! Thank you! :) Truth by told, I’m not sure exactly how much I mow since my house and barn sit in the “mow zone”. It ‘feels’ like about half of the total land. But rest assured, I am basically mowing a perimeter around the buildings so I can get to some apple trees, the garden and picnic tables. :) I am actually the only person on my road not mowing every inch of yard! I’ve a bunch of land I just let go whatever way it naturally chooses. :)
@Erin,
So you know, one of my husband’s major gripes is that I pay a guy $40 bucks to mow our tiny yard because when we first moved here, he was doing our neighbors and I gave him a $10 tip to cut the yard right then. Now, it’s just the cost of it and I figure the six or seven times he comes is still better then buying a new hand mower and storing it (we have hardly any storage), plus we get edging and I don’t schedule him, he just comes when I call. ;-) Ah!
I reread my morning post, and certainly didn’t mean to come off strident (though I am pretty anti-grass, but it has its place): I just meant to posit that there could totally be completely different solutions or ways to look at the cost of something.
Here’s another example that keeps coming to my mind: our old car. It quit us in December. We did the numbers and it was pretty easy to add up gas, insurance, repairs to get the cost of having it. After much hand-wringing, we decided not to replace it. We live in Seattle, where it’s not horrible to be without, but it is sure nice to have one. We bike commute, ride the bus, and joined a car share for quick errands or weekend outings.
So far, so good.
But here’s the one thing we couldn’t get at in the numbers: now that we’re really forced to group our errands, how much money got spent on “impulsive” grocery store runs, or just dashing across town to the best French bakery, or hopping in the car for dinner for a change of scenery? They didn’t feel impulsive then. And it definitely added up.
When you see those car calculators they never have a category called, “Impulsive Using of Car to Go Shopping” or “Using the Car to Stave Off Anxiety at the Bar”…
Anyhow, I’m not terribly proud to be without a car. I just tell people we’re “Car-less.” We’re still often dependent on cars to get us where we want to go or bring us what we want.
We are going to re-look at the numbers after a year to see how much it cost us to be “without” one. Are we really saving money? We can only guess at those impulse dollars and there’s no way to know. It’s interesting.
@knox: What a great post. And no worries, I totally understood your point. :) Your car solution is fascinating to me. Where I live in rural Maine, that’s not a realistic option, but I do agree that a car can be a huge financial drain. That’s why I will never purchase a brand new one off the lot. I always get one that’s a few years old that’s been well maintained. (Then I cross my fingers. :) ) But it’s interesting where this thread went. I spend a lot of time in my work with YNAB teaching people the rules and the software. “Where do I click to get it to do this?” “How does Rule 2 work?” etc… I love to see folks get past those initial (an necessary) education steps and get to down to real conversations about how to save money. Your car example is a good example of “thinking outside the box” with your money, and that is a result of increased awareness in your spending habits. Good budgeting certainly does increase awareness. Thanks so much for sharing your solution, I’m sure there are others in similar situations who may think about their car differently now. :)
I just wanted to let you know how much ynab has changed my life. My life was full of “lawn mower” purchases. Now things are different. I have control over the spending and it feels great to stay within your set spending. The anxiety is gone. I only wish I found ynab sooner.
For all the new people just starting out, keep with it. The rewards you will find are far better than you can imagine.
Denise
Erin,
Thanks for the story. It’s very inspiring.
Erin,
Thanks for the story–it’s so nice to have a rainy day fund. I thought the conversation about mowing and driving costs were interesting. We, too, live out of town, and because of this, we try to ‘group’ our errands to save gas money. We also live on 10 acres (we like to grow/raise our own food). We had a mechanic friend help us shop around and found a used riding lawn mower for $400. It’s still going after 5 years (yet crossing fingers). Our neighbors have several acres–about 2 in front of their house. They mow the perimeter like you mentioned. I think it looks quite nice. Then they cut it for hay. Most of our property is in pasture, but we mow the front portion (probably an acre’s worth?? It does take me more time than I care, although, now my son is mowing it). Have you ever heard of eco grass or no-mow grass? I’ve thought about testing it in a few portions of my yard, but the time and money to do it have deterred me thus far.
Knox mentioned impulsive purchases. We use to go to the grocery store ALL THE TIME–it drove me crazy. It was usually to get more milk, but then we’d end up buying MORE stuff impulsively. So I started buying extra milk and freezing it. By doing this I have been able to stretch grocery trips to once every two weeks. I know some will say ‘yuck’ to freezing milk, but I don’t notice much of a difference. I set it it out to thaw, and then shake it vigorously before using. Mind you though, we don’t use it much as a beverage–mostly for cooking or cold cereal (cold cereal–another thing I could replace and save money, but that’s another subject).
I personally think all of America is going to have to learn to start living diffrently we have land, so we have grass, my neighboor sells cars off of some of my land. Another has rented some of my land for a storage POD .If you have a spare room how can you turn it into cash and attic or a basement can also be cash sell your space and your skills and your clutter. Keep anything like the extra mower but keep in mind just because you wish to keep the old (because you believe that the old is better) then sell the newer one that is acting up. Just let the person buying it know what they are getting. I have sold and barter for so many things . Selling clutter can help fund a rainy day fund. Bartering can keep credit card debt a thing of the past. Start owning your life! Teach someone else and let us all start living more generously so that we can all make America a great place to live. i personally think even if you are broke in America it is way better than life anywhere else.