How to go from stressed out to certain with your finances in 2014.

bag of moneyAn effective budget will take you from stress to certainty with your finances. Check out this budgeting success story from “petra09″ in the You Need A Budget forum to see how she transitioned from constant money worries to peace of mind – in spite of losing her job. 

“In Feb, I hit a wall with controlling my finances. The year prior, due to a generous gift, I had become debt-free and yet within a few months I was again on the way to credit card debt hell. Despite all my efforts, I was still confused each month as to how my expenses were miraculously covered by my income and the credit card [debt] was growing again.

On top of this, I knew my job was going to be cut in a matter of months and despite shoving money into an account each month, I had no idea if it was enough or why I didn’t seem to be getting anywhere with savings. Then there was a car to buy, a cat surgery required, and my own surgery to pay off. Going to the grocery story was an exercise in guilty “I think I have enough” purchases, going out with friends was a drink away from a panic attack, and no matter what I did, I never felt confident all the bills would be covered.

I would neurotically check my balances, but never know whether it was enough despite spreadsheets, post-it notes, and a very patient boyfriend who couldn’t understand my feeling of helplessness due to his own innate budgeting ability. Worst of it: I knew I wasn’t in true danger. I had friends in far worse situations, not to mention folks who were relying on friends and family to keep them from losing their homes. Why couldn’t I just get this right? What would happen if I didn’t do something?

I googled budget software and threw myself at the mercy of YNAB hoping I wasn’t a completely lost cause. I gave myself completely to the Four-Rule methodology, gave every dollar a job, and told myself that even though I didn’t know where that $60 was going to come from to pay for it, at least it was better than doing nothing.

Ten months later, I was happily reviewing my end-of-year numbers and came across a note I’d made that day in my “Rainy Day Funds” line item:

My 2013 Financial Goals:
1) Pay off debt ($1103.20)
2) Save $6000 in emergency money ($600/mon)
3) Put $1000 down on car payment in Nov ($111/mon)

I sat back in my chair and was overwhelmed in gratitude and pride. Thanks to YNAB, I had not only completed each and every one of those goals with money to spare, I had done a complete 180 on how I felt about finances.

I no longer worry about if I can pay off the credit card balance – now it’s always paid off in full each month. I can go out to drinks with friends and not sit there in a state of panic of whether that cocktail means I can’t make rent at the end of the month (I don’t even understand how that could happen now). When I got the layoff date, I was quickly able to finance my car (with a generous down payment) without worrying about how I was going to make the monthly payment while unemployed. Why? Because I had not only met my emergency savings goal, but I had modeled out what life unemployed would look and had budgeted appropriately. Now that I’m job hunting, I’m armed with data to know whether or not a salary will work for my life rather than hoping everything will be covered “somehow.” I’m confident in my spending and saving decisions rather than paranoid and stressed.

YNAB gave me the control I needed over my finances to take back my life and make my money work for me rather than hold me hostage each month. Every time I open my app and add a transaction or budget for Feb in Dec, I feel good. I know I’m taking care of myself and with the habits YNAB has helped me form, I’m just kinda a better human being. This year, my 2014 financial goals won’t be a “hope this works…” dream – they’ll be solid numbers I know I can make happen.

Thank you, thank you, thank you, to the YNAB team and this forum. You’ve changed my life and I couldn’t be more grateful. I think my friends are a little sick about how much I love this software, but seriously, I couldn’t be where I am without it.

Have an awesome successful 2014 and happy budgeting to all!”

4 Responses to “How to go from stressed out to certain with your finances in 2014.”

  1. John

    I could have written this post (although not nearly as well). I have been fortunate to have reasonably high salaries for many years of working, but somehow the bottom line never seemed to follow and I felt those some feelings of “What happens if something changes”. I found YNAB though a ad on daringfireball, of all things and gave it a shot (Have to say the 37 day-trial is genius).

    Bottom line is nearly the same – all debt except the mortgage gone, really looking at every purchased before making it, which by itself was a lifestyle change I should have made 20 years ago.

    It’s hard to explain to others the power of the YNAB system, but I try and several people close to me got a nice gift certificated this year for Christmas. I can only hope they can really make it work.

    Thanks to all here for the great stories and encouragement.

  2. Tobias

    I can totally understand these feelings of freedom, calmness, and gratitude. To say that YNAB has totally changed the way I deal with money is still an understatement.

    12 months ago I was at the edge of getting into serious financial trouble and sinking deep into debt – for the 4th time during the last 5 years. After losing my job in spring I knew that this was litetally the last chance to become mature in how I deal with money.

    Only 9 months later I have paid off most of my debt, have settled payment plans for the remaining debt, am totally aware of my financial situation and how to live inside my means, and have turned around my whole life in terms of money. I now have some solid data to work and plan with.

    And best of all: For the first time in over 10 years I am able to spend money on myself (clothes, fun, going out, etc.) without guilt, fear or worries.

    This is such a liberating feeling, and if this was the only goal I achieved in 2013, the year would still be a total success!

  3. JayBee

    I’ve only been using the system for a month, and I’m $679 up from where I expected to be, which can be allotted to rainy-day funds. I need a bit more training on the software to understand how to conceptualize it on the budget — DH promised he’d watch the training DVD with me and go through the workbook. I already did it on my own, but I do need his help.

    What I’m proud of is that Dec wasn’t the thriftiest month, and yet I’m still $679 up! I’m really excited about this.

    My goals for 2014 are:

    1. pay off credit card;
    2. get to month ahead and buffer;
    3. rebuild emergency fund.

    Any goals after that would be

    1. saving up for home down-payment (for live-income property);
    2. saving up for things that will need repair/replace in the coming months (our computers, part of our work and play, are 4 and 2 yrs old — so they’ll need work; we may need to replace a car);
    3. save as much as humanly possible in retirement funds.

  4. lee

    I am a total Ynab convert since February 2008. My goodness, nearly six years of peace of mind. Since 2008 I have eliminated my overdraft and have a serious positive balance. Paid off, five maxed out credit cards and even have some serious savings.
    I now get slightly freaked out if I haven’t updated Ynab for a while. It doesn’t take long to do once or twice a month and I love knowing that I am in control of my finances and the bank is not taking any of my hard earned money as punishment for having an overdraft, nor are the credit card companies charging me hefty interest fees, which effectively double the cost of anything I buy.
    Yipee I’m free to live as I want

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