March’s Success Story focuses on Tracy Alt from southeastern Michigan. Tracy’s success demonstrates that YNAB can have an immediate effect on your day to day spending.
Tracy just started using YNAB in February of this year. Her first success was at the grocery store. Using YNAB Tracy was making her spending decisions by the budget, instead of the account balance. She determined how much she was going to spend on groceries – and that was it!
“Before starting YNAB I would “tell myself” that I had a $100 budget, but I was really lying to myself because I knew darn well that I was going to buy everything in my cart even if I went over-budget.
When I got to the check-out lane, I immediately separated the “must-have’s” from the “wants” in my cart. I rang up the “must-have’s” first and then I began ringing up the “wants” in order of priority to me. Once I hit $99.99 I stopped. The only things that I could not get were a box of cake mix and a jar of frosting (which I wanted to have on hand just in case my husband changed his mind and decided that he does want a cake when we celebrate his birthday with his family).
I felt so proud of myself handing those items back to the store clerk and really, truly and honestly sticking to my grocery budget.”
Tracy explained to me that before YNAB she kept a chart of monthly bills.Until recently, her chart only included the bills that she paid regularly, every single month, such as the mortgage, car payments, utility bills, etc. As she paid each bill she would check it off on her chart so she could see which bills she had already paid and which were left to be paid.
Tracy went on to say, “Spending decisions were made based on comparing the bank balance to what bills were left for the month. If I felt confident that there would be extra money, we would spend. If not, we would not spend. We had absolutely no system in place to account for “lumpy” expenses such as hair cuts, dog food, car repairs, etc. We just sort-of winged it with these expenses.”
Now that she is using YNAB, things are much easier to manage.
“In just one short month of using it, YNAB has completely changed our financial outlook. There is no more guess work. Either the money is budgeted for a particular expense or it is not and we can spend accordingly. There shouldn’t be any more surprises now that we are budgeting for the “lumpy” expenses. The next time my husband wants to do an oil change on one of our vehicles, I know the money will be there, allocated specifically for that purpose.
The monthly bills are still taken care of and the non-monthly bills are being planned for by budgeting money to those categories each month. I can’t wait for fall, when I normally start worrying about how we will pay for Christmas. It’s only February and I already know how we will be paying for Christmas this year….with money that is already in our bank account waiting to be spent for that purpose.”
So if you find yourself frustrated because you don’t have a buffer in place yet, or you are still working on your credit card debt – remember – budgeting can have an immediate affect on your short term spending, helping you to reach those long term goals.
~Erin – YNAB Coach