YNAB BLOG

Understanding how inertia impacts your finances.

ID-100230477Newton’s inertia seems to apply to finances as much as apples. This is simultaneously great and terrible news.

Many of us have applied significant, sustained force to our finances – in the wrong direction. We’ve spent carelessly, procrastinated saving, and borrowed to make it all “work.” This force in the wrong direction has created velocity on the path to more stress and fewer options in life. What a drag.

Reversing our course requires us to apply equal and opposite force to slow our negative financial momentum, eventually bringing us to a state of rest. In this restful state we’ve stopped borrowing and achieved awareness of our life’s true expenses.

After achieving “rest” we can finally build positive momentum in the right direction; this is when we experience fat checking accounts, buffers, and debt freedom. The good news is the positive momentum builds steadily as we employ the power of a functional budget and compounding interest.

Every day we sustain our positive financial momentum we’re that much further from a state of rest (“just getting by”) and heading in the wrong direction (borrowing).

Which is the most difficult phase? Having gone through it over the last eighteen months, I found it hardest to slow the negative momentum and achieve financial rest – that point where I’m not saving much, but not borrowing either.

What makes this phase so hard? The fact that my previous bad decisions and habits kept applying force in the wrong direction long after I’d resolved to go in the right direction. I had to maintain high focus, resolve, and optimism to overcome the negative momentum.

This post may have gone a little too abstract, but I know some of you are wondering why you can’t seem to build up your cash and move further from $0. Be patient. Use your budget to spend smart, work on your earning power, and hang in there. You’ll make it.

Image: FreeDigitalPhotos.net

14 Responses to “Understanding how inertia impacts your finances.”

  1. Tricia

    I definitely connect with your awareness around momentum and also the tension around living with effects that do not reflect present behavior or aspirations. Thanks for putting it out there…

  2. gpamerritt

    I wish you had a Like button on your blog entries. +1,000,000! It took me 2-3 years of grunt work to reverse the tide, and after 2-3 more years, I’m now saving about 70% of take home pay (I’m 64, married, no kids at home, mortgage paid off, we’re now saving like crazy for a decent retirement nest egg).

  3. Jacqi

    I am just getting started.and looking forward to positive inertia in my life. Very insightful.

  4. Jennifer K

    Yes!!!! That’s exactly what it’s like. We’ve resolved to do better, our current actions are better, but we’re still fighting the debt and demons that put us in a negative place. We’re almost at a state of rest ($0 debt except the mortgage) after six very long years. Can. Not. Wait. to start building positive momentum.

  5. Dave

    Well, I’m only two months into my YNAB budget but am loving being so aware of our finances. After floundering around in our finances for 29 years of marriage I finally feel like I’m getting a grip on it. Haven’t started building that buffer yet and one of our sons is getting married in 100 days so all extra money is going towards that at the moment. Once past that the plan is to start building that buffer. But for now I can sit down and plan out the month and we’re rolling with the punches like never before – like the $600 in repair parts I had to buy for the car this month. That kind of hurt our feelings but we were able to plan around it and make our budget work. We’re gonna make it!

  6. Mark

    This is really true. It is really difficult to reverse the course. We are mostly out of debt but still not saving yet. I can see the light at the end of the tunnel but right now it feels like we don’t have enough money to buy anything! That’s the hard part.

  7. Manny

    I’m on track to hit “0” this month and, while I’m elated, I’m also daunted by what a long continuing slog it feels like it will be to build the buffer, savings etc. So this was good timing, it’s encouraging to hear that the hardest part may be over.

  8. Saskia

    ” I had to maintain high focus, resolve, and optimism to overcome the negative momentum.”

    Yes! And my husband and I wouldn’t have been able to do that without YNAB. We found and started using it five months ago. About an hour ago I made a final credit card payment that zeroed out our pre-YNAB debt category, and for the first time in 24 years we have zero consumer debt. Yay!! We will celebrate tonight, and then move on to the task of eliminating the last chunk of student loans.

    I didn’t think it was possible before finding YNAB, but now the stress is gone and the momentum is going in the right direction. Thanks for keeping us motivated with this blog, and with the awesome software!

  9. Geoff

    Back in October last year, I made the smartest $60 purchase ever. YNAB has enabled me to finally take control of my spending habits. I have paid down half of my 9,000 dollar credit card debt which should be paid in full in a matter of months. I’m never late on paying bills anymore, I don’t live from check to check, I am much more aware of my spending and as a result I am saving more money. I’m not where I want to be yet, but I can see the way to get there. It takes real dedication, but without the right tools it’s impossible to do the job. YNAB is the right tool for me. This Blog is also helpful. Reading personal stories from people that have gone through tough financial times and listening to their stories is priceless.

  10. Brenda

    Holey moley, does that “rest” period ever take a long time! And it’s not particularly “restful” either. ;) We’re still in the middle of this: Stopped making bad choices, started making better ones, and dealing with the mountain one rock at a time.
    Let this be a lesson to you kids: A few bad choices rolls your momentum the wrong way for a longer time than you care to think about!
    Thanks for the encouragement to those of us still in the midst of it. Keep on keepin’ on.

  11. j a shimel

    intertia, in like having the mindset to believe this is possible… is that different from paralysis, when you feel there’s nothing you could do about your financial situation? or that things are going down the tubes so fast inertia has to carry your further down, fast?

  12. Karen J

    I’ve repeatedly “fallen off the YNAB horse”, over the years – have been fighting to understand my default-to-overwhelm about Life and Everything (including finances, of course).
    I’ve managed to not get sucked in to the consumer credit vortex, but still need to get a better grasp on my money issues. They have their own kind of inertia that makes it difficult to get turned around to the right direction, too!
    Starting over, once again, here… glad to have found this blog, Mark! Thanks – good explanation of some of what’s going on “in here”!

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