YNAB BLOG

Tomorrow is New Year’s Day, But Budgeting Has Me in a Thanksgiving State of Mind

calendar_blankAfter YNAB’s two week holiday break, I woke this morning covered in Chik-fil-a wrappers and styrofoam take-out containers from the local Thai joint. And empty Coke Zero cans. And apple pie crust.

Bleary-eyed, I stumbled to my computer and fired up YNAB.

“I haven’t looked at my budget in over two weeks,” I told my brother (who also YNABs) over instant messenger.

“I reconciled this morning,” he replied. “It was a bloodbath.”

I imagined I’d be in for the same, given the lack of attention I’d paid my budget during the time off work. We’d had family in town; we’d eaten out a ton; we’d gone to the movies with the kids. We’d generally lost our minds.

I imported transactions from my bank and credit card (something I normally don’t do), and assessed the damage quickly:

  • Groceries: -$60
  • Restaurants: -$192 (bam!)
  • Other Medical: -$73
  • Entertainment: -$55

Total December Overage: -$380

Hm, that’s not so bad. Exceeding budget by close to 8% isn’t pretty, but could have been much, much worse.

But wait! Discretionary surpluses!

A quick scan through my budget revealed some nice under-spending (numbers shown are the remaining category balance).

  • Household Needs: $153.98
  • Fuel: $5.20
  • Kate’s Fun Money: $39.74
  • Mark’s Fun Money: $28.74
  • Clothing: $54.07
  • School Supplies: $9.17
  • Christmas: $51.14

Total December Surplus: $342.04

Actual December Overage: $37.96

And  that’s why I love budgeting, especially budgeting the YNAB way. In a month where we shut our eyes to the budget and basically went (what felt like) hog-wild, our consumption binge put a $38 dent in our finances. And thanks to YNAB Rule 3, that $38 comes out of next month’s ‘Available to Budget’ money. No big deal.

How Budgeting Saved Me from Myself

I’m wondering how this happened. While I was ignoring my budget, I knew the day of reckoning was coming. I assumed it would be awful. Bad enough that I’d have to dip substantially into my emergency fund to cover the binge.

The only thing I can figure is ten months of budgeting has rewired me – changed my internal definition of normal.

This is exciting. It means YNABing has made me better at money in spite of myself.

I still got that nice little consumption buzz during my budgeting break. It felt like a walk on the wild side. I wanted to turn to the stranger next to me at the movies and ask “Hey, did you check your Entertainment category balance before you bought these tickets? NEITHER DID I. So, you think Kristen Bell did her own singing?”

But, thanks to the budgeting habit, the buzz wasn’t followed by a nasty hangover, ie credit card debt.

And that’s why I’m grateful for budgeting as we kick off a new year, and I hope you are, too.

If you don’t have a budget, start one today. If you’ve had one, but you’ve ignored it a little too long, make a Fresh Start (live class). In either case, giving every dollar a job is the key to making it a great year for your finances.

6 Responses to “Tomorrow is New Year’s Day, But Budgeting Has Me in a Thanksgiving State of Mind”

  1. Amber

    This is so true! Our idea of splurging is quite different now, but you know, we are just as happy – if not more so. And we have a lot more money available for bigger purchases that always seemed impossible without credit cards.

  2. JayBee

    My husband and I are so into saving right now, it’s awesome. We started looking at properties today so that we could *dream*. :)

  3. Kenneth

    Welcome back, Mark! I figured you all were on a YNAB employees end of year break. I kept checking the blog daily, but alas, no new blogs.

    I think you are absolutely right that we YNAB budgeters have rewired ourselves. I know I have. I have my spend set up pretty loose, so at the end of the month I can always move money around if we need to whack a mole the Restaurants category, for example. So without exception, I have had a surplus every month since I started YNAB in May, 2013. This surplus goes somewhere productive (usually paying down my HECL, or to my Savings category).

    I just figured out this month that I needed to max out my 401k contribution. I was contributing 6 percent, with a 6 percent employer match. I upped it to 14 percent, and added a $211.54 biweekly catchup contribution amount. So my 401k contribution is now $17,500 (max for 2014) plus $5,500 (age 50+ catchup contribution) plus $6,500 or so employer match, for a total of $29,500 going into a Vanguard Large Cap fund (we don’t have many choices).

    This has reduced my take home pay, but only by about 2/3 of my increased contribution, due to tax benefits. So I have reduced my HECL monthly paydown target to $1,500. Still we have my loose spending categories, fully funded rainy day escrow categories, and about $735 a month going into savings. Life is good. I may even save on our $100/mo restaurants category because I have to lose a few pounds over the next couple of months.

    • mark

      Thanks, Kenneth. Always good to know people are checking in on the blog. And after reading your comment, I have serious retirement contribution envy. :)

  4. Emily

    If we did not have a Chick-Fil-A in town, my Restaurants category would probably be about 75% smaller. Around here when you ask the kids what a cow says, they respond “eat mor chikin!”

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