Hey YNABers, please take this quick survey. It shouldn’t take more than 60 seconds.

When you’re done, post a comment telling me you filled it out (I want the survey to be anonymous so I don’t ask for a name or email there) and you’ll be entered to win a $50 amazon gift card (I’ll randomly pick the winner and announce it Monday, the 31st).

This survey is to help us understand how people are sharing YNAB, and what we can do to help that process along. I really appreciate your input!

This survey is JUST for YNABers :)

YNAB doesn’t really have a mission statement, but I do feel like we’re on a mission. Mission statements are supposed to be succint, so I think I want to go with:

“Raise money awareness.”

That’s not very catchy.

I’ve talked about awareness a lot in the past, how I tracked my spending on a piece of paper when I was a teenager, different activities you can do to raise money awareness, and the six levels of awareness.

Raising Money Awareness

Let’s pick teams. The first captain is Awareness, and the second captain is Head In the Sand. Members of each team want you to be like their captain. When all the pieces fall where they may, the teams will look something like this:

Awareness

• Monthly Budget Meeting.
• Thinking.
• Goal-setting (and reviewing).
• Higher frequency of transaction entry.
• Manual, hard labor (caveat: within reason).

Head in the Sand

• Credit card companies (When you spend, they earn. Every time.)
• Banks (When you use their debit card, they make money. When you overdraft, they make money. When you borrow money, they make money. When you sneeze, I do believe, they have somehow figured out how to make money.)
• Anyone selling something at the moment.
• Spend-happy, dirt-broke friends that you hang out with. :)
• Alleged automated money management.

The more you’re aware of your money, and the demands placed on your money NOW (Rule One), and in the future (Rule Two), the better chance you’ll have of reaching your goals. Join the awareness team, and do those things that team does. Have a monthly budget meeting, THINK before you buy, set goals, enter transactions as they happen, and require some manual effort of yourself.

Budget Mobility = Increased Awareness

With the launch of the Android app, this has popped to the front of my mind. Android users out there, you will notice a difference in your finances.

When we launched the iPhone app a while back, I had been using the beta version for quite some time. It literally revolutionized my money habits (which I thought were already pretty good). The key is what happens during the evaluation, and then purchase process.

During the evaluation, I’m sitting there holding some book at Borders…turning it over and over…reading the inside jacket…jumping to the middle of the book and reading a few pages… “Should I buy this?” Pull out phone…

Tap…

Tap…

Dang. $4.32 left in “Books”

The book can wait. Strangely enough, if I can wait a week or three to buy a book, I usually don’t buy it. Having the “Books” category balance in hand is critical. It’s the relevant information that is needed at that very moment. I don’t need to know what I spent in Books last October, what my trendline is for Books since I’ve graduated from high school, or what my average book purchases are since I bought a Kindle (it’s higher, and Amazon knows it, and loves it). I just need to know if I can buy that book, right now. Problem solved.

Let’s say I experience something a bit different:

Tap…

Tap…

Woot! $19.58 left in “Books” and this book costs $10.85. I head to the cashier and make the purchase, entering a transaction in “Books” for Self-Working Card Tricks: 72 Foolproof Card Miracles for the Amateur Magician at $10.85. My “Books” balance is now $8.73. My brain makes a note of it.

And the magic happens: I feel content with my purchase. And it’s not the shopper’s rush that quickly morphs into depression/anxiety. It’s contentment. I planned to purchase some books. This one looks interesting. I’m buying it, and I feel fine. Even good, because I have a new book!

Having the app on either your iPhone or Android will change your spending habits, align you better with your budget, and help you make purchases that you’ll enjoy :)

The allure of direct connect with banks

As many of you know, we have tabled work on direct connect so we could focus on an over-the-air, cloudsync framework that would end the requirement to sync your device over your own wi-fi network. One trucker in our forums was lamenting the wi-fi requirement, and I could feel his pain. His situation (and many others similar to it) will be greatly improved when we release it. I have no ETA. Taylor is devoting 100% of his time to it. You should send him some Time, if you have any to spare.

Why are we focusing on the mobility piece in lieu of direct connect?

I want YNABers to be in the habit of recording their spending as it happens. It’s a stronger psychological win, and will promote more behavior change. We’re pushing mobility first so you’ll learn and love the idea of entering transactions in real time and then using a transaction import process merely as a “true-up” of your situation—catching automated transactions and maybe a few you missed (never as the primary means of data entry).

We may revisit the idea of direct connect in the future. I have no doubt we’ll sell more software if we add that feature. But I don’t know if selling more software with the feature hook being direct connect really aligns us with our goal of raising money awareness. When it’s “taken care of for you,” you won’t check your budget as often. You’ll allow longer periods of inactivity because you’ll be certain you can catch up in one big click. You’ll begin to dread the massive amount of work required to categorize 157 transactions from the past two months.

And when you’re finished categorizing 157 transactions that have already happened, you’ll feel good that you can check off “manage money” on your To Do list, but it won’t have added any value. You ever heard a weather report for the past two months? Me either. Set up a budget. Look ahead. Record what’s happening. Re-evaluate. Look ahead…

Wrap Up

You can’t change your spending patterns unless you’re aware of your spending. You can’t reach your financial goals unless you’re aware of your goals. You can’t discuss finances with your spouse if you’re both not aware of your spending, and your goals :)

Automation is valuable as it removes valueless tasks. When there’s a task that adds value (checking a balance on your phone, entering the amount in real time), it’d be a shame to see automation take that away.

Our goal is to raise money awareness by having users be able to check—in the right context—and enter their spending in any number of ways, so they have real-time data and can proactively make correct decisions in the moment. We’re not there yet, but at least now you know where we’re headed.

Just wanted to add our small success story to your stats.

I bought YNAB back in December 2010. We had a vague idea of what our monthly expenditure was but nowhere near accurate. I run a small online business and my husband is a freelance ecommerce developer so our income is variable.

To get ourselves a buffer we sold a bunch of ‘stuff’ on EBay and Craigslist. Today is March 1st and I was able to use our $3,400 buffer for budgeting. All the income for March will now go into next month. We are no longer living from paycheck to paycheck.

2 1/2 months to turnaround!

I can’t tell you how much relief I felt when we had our budget talk this morning. We actually put some ‘fun money’ into YNAB and we don’t have to feel guilty using it.

AND we have money to go towards future expenditures and our savings acount.

Thank you so very much for this software. I think it has saved our sanity!

Thanks for sharing Rose!

I thought I’d spend a bit of time explaining our rationale, and how we came to settle on seven days.

You Procrastinate

Have you ever noticed that when you’re just about to sit down to some difficult work, that you suddenly need to go get a snack, grab a drink of water, go to the bathroom, or update your Facebook status?

Yeah, me too.

The only person I know who does not fall victim to procrastination is my older sister. In high school, she would see that a project is due in three weeks on a Monday, that she had a weekend commitment beforehand, and that the week leading up to it was pretty busy as well…so she’d do her project NOW. I know–crazy. She was a tough act to follow :)

In Neil Fiore’s book, “The Now Habit” (Amazon link) he outlines why many of us procrastinate. Tell me if this doesn’t perhaps describe you:

You demand that you do it perfectly–without anxiety, with complete acceptance from your audience, with no criticism.”

When it comes to your personal finances, it may very well be that you’re in an excellent position, and just looking for a tool to help you maintain your path. Or, you may be in a pretty bad place financially and you’re looking for a way out.

Either way, you tend to procrastinate getting started with this whole “budgeting thing” because you’re afraid that:

You Procrastinate Because You’re Afraid You’ll Do it Wrong

Luckily we’re here to help. We offer Intro to YNAB classes all the time. They’re live. You can ask questions. They’re extremely helpful. Consider some of the recent feedback we got from the post-class questionnaire we send out:

“I’m really glad I signed up for this. I’m more comfortable with using the software now.”

“Just what I needed to get started on my budget.”

“This class is where I turned the corner in understanding this! Awesome! Thanks for making this available!”

“So great that these are offered to users for free! I really appreciate all the support that is offered – feel like there is a real community here.”

The classes help you get started correctly. Use them!

You Procrastinate Because You’re Afraid it Will Take Too Much Time

Now, I should speak quickly to your expectations of results verses effort. If you’re expecting to get these types of results without giving any effort, you’re going to be in for a world of disappointment.

The median turnaround for YNABers in just months is hundreds of dollars (some in the thousands). They either pay off debt, increase their savings, or both. BUT, the median YNABer doesn’t sit back and relax. They get going with it. They begin adopting the Method, and the results come from their efforts.

So yes, you’ll be required to invest some time in the learning process. It’s a whole new way of managing your money and it can take some getting used to. However, once the learning curve has leveled off, the time you spend thinking about, worrying over, or managing your money will plummet far below your “Pre-YNAB” days.

My wife and I “do the budget” a total of about two hours per month. Between adding transactions on the go with our iPhone, and then doing a quick import to double-check everything, it just doesn’t require a lot of time. (If you’re one of those people with four checking accounts, eight savings accounts, and some other accounts, you ought to revisit what got you there, why, and how the heck you can simplify things. You’re just inviting errors, and unnecessary work.)

You Procrastinate Because You’re Afraid You Won’t Stick With It

There are some measures you can take to increase your chances of sticking with a good thing. Like flossing, it’s easy to have good intentions, and tough to actually floss every day. Here are a few tips to make sure you DO stick with YNAB:

- Use it frequently at first. Once the habit is ingrained, you can back off a bit. Daily for a month, then every other day for another month, then every third day for the third month, etc. Julie and I now fire up YNAB twice per month (again, staying up-to-date with the phone makes that completely possible).

- Give yourself rewards for good behavior. Treat yourself to some Ben & Jerry’s, relax with a good book, take a nap (guilt-free), etc. Attach something positive to your budgeting. It’ll get your subconscious in gear and help you remember.

- Reminders. Use them. Set phone reminders, post-it notes, have a friend ask about it, etc.

- Results. Give it your absolute all-or-nothing devotion for two weeks and see if the results themselves don’t motivate you to continue! They will. You’ll feel more at peace, your money will be going further, and you’ll feel like you have a new lease on life (not the kind of lease that robs you blind at the car dealership).

Why Our Trial Doesn’t Allow Procrastination

Procrastination is the bane of my existence. I want it banished from my life and yours. One way to ensure that you don’t procrastinate using YNAB is to make the trial short. We want you to get busy with it now — not later. Not when it’s “more convenient” (hint: it never is).

We’ve tested 60 days, 30 days, and 15 days. 7 Days proved to be the most successful. Why? Because we aren’t allowing people to let everything else distract them from their desire to turn their finances around.

Is seven days a short trial, compared to other try-before-you-buy software? Yeah. But we also offer a 30-day moneyback guarantee as a “just in case” policy for you. So even if you purchase it within the trial window, you still have another 30 days to really give it a test spin. Of course, now that you’ve anted up a bit by purchasing, your chances of success have increased there as well because you have some “skin in the game.” We’ll save that discussion for another day. :)

Don’t let procrastination keep you from reaching your financial goals. Get started!

1) Really well-designed, thoughtful, carefully-constructed software to help you follow the YNAB Methodology.

2) Education, motivation, and ongoing support to help you break some ineffective money management paradigms (forecasting) and learn a new, effective way of managing your money.

The latter is far more important than the former.

So whether you’re just getting started today, or if you’ve been kicking the software’s tires for a few days, it doesn’t matter. The odds are that you’re coming here with some ideas about how money should be managed. Some of those ideas are great. Some of them are just bad-habit baggage.

I propose that you open your mind to a new way of thinking about your money–then let us support you through the entire process. Let us teach you. We love doing it. We’re over-the-top about it. For the amount of support we offer potential and current customers, you’d think we were selling some multi-thousand dollar package.

Our customer service guru, Steve, is a superstar. He’s über-responsive. He maintains an up-to-date page of frequently asked questions that are actual questions people ask — not subtle sales pitches that you’ll find extremely helpful. He’ll respond if you send in a support ticket. He’s very fast. He’s human (some might say superhuman). He reads your email and then he responds. I know, it’s crazy. He’s even called people when he’s felt like they just weren’t getting something right.

We offer FREE, LIVE classes all the time. Erin and Todd, our YNAB Professors, have their webinars polished. They’ve been doing this long enough, they’ll pretty much tell you what questions you have, and they’ll be right, and you’ll be amazed. These classes are done over the internet, where you can see the presentation, their software, and hear them explain things as they go along. You can write-in questions that they’ll answer. You can attend the class in your pajamas. (I add that only because all of the work-from-home ads I hear on the radio really seem to emphasize that as a serious benefit–I figured why not add it here as well?)

Our YNAB Profs (Erin and Todd) have held classes at midnight to make sure they were live for timezones in various parts of the world. They really, truly, want you to understand the YNAB Method, and how it is implemented with the software. They want you to succeed.

And yes, these classes are free. You don’t even have to buy the software to attend. Just check it out and let us show you how much we care.

We want to change the way you think about your money. We want you to learn the Four Rules of the YNAB Method and then, of course, we want you to buy the software so you can implement it.

So then once you’ve bought, we forget all about you, right? Nope. We’re organizing online meetups (see the schedule here) where people can join a webinar just to do a bit of an accountability “check-in” and make sure they’re staying on track. And yes, those are free.

Our end goal is to have you become one of our hundreds of success stories. You’ll report in a few months that things have turned around significantly…in a few more months that your credit cards are paid off…and some years down the road you’ll write in just to let us know that your house is paid off, the kids are all going to college without loans, and you just purchased a new car completely with cash. Oh, and you’re sleeping better, your marriage is stronger, and you’re more productive at work.

That may be when we say our work is done. Maybe.

Our forums are, what I would call, the friendliest on the World Wide Web (we really need to bring that term phrase back — there’s my effort for the day).

I love the passion that YNAB users have for their newfound knowledge. Money is such a pervasive “thing” in our life, it’s easy for The YNAB Way to not really be much about software at all. It feels, in a lot of ways, more like a movement.

When you find something that’s really changing your life for the better, it’s natural to want to talk about it. I hope people keep talking about YNAB — screaming it from the rooftops even.

Let’s just make sure we don’t trade in our poor money management skills for a new set of awesome skills that come bundled with a pile of good ol’ hubris. And then, of course, begin judging our closest friends and family with an elitism saved only for the naming of roses (White Rose of York, Comte de Chambourd, and Madame Hardy anyone?).

I know I’ve done this before. Are you occasionally guilty of the same?

For the one week I eat healthy: Suddenly everyone around me isn’t so…shame on them.

My kids happened to be quieter in church yesterday (than normal) so…suddenly I’m the WunderParent and everyone around me can’t get a handle on their kids?

I discover this (fantastic! unbelievable!) software and accompanying Methodology that’s (no hubris here as I write this…) transformed the way I think about money…now everyone around me is just a bit inferior…not quite as informed…not as special. And they certainly can’t afford that new [ ___________ ] (which they must’ve financed).

Bleh.

JD (from GetRichSlowly) wrote about a sweet Alaskan trip he went on a bit ago — and how he felt he was being judged:

Throughout the trip, I felt like I was under pressure to, well, be more frugal, to make the same choices John would make. And you know what? That pressure sucked. It felt awful. I didn’t like the feeling of being judged, especially by somebody I look up to.

How lame is that?

Ramit (from IWillTeachYouToBeRich — which is very hard to type, but an insightful read most every time) recently wrote about how we’re all hypocrites when it comes to spending. He’s right.

This is just something to think about. Now let me sign off–there’s something in my eye.

We’re looking for a fantastic AIR/Flex developer for a full-time gig for (at least, especially if things go well) the next six months.

If you’re interested, or know someone who is, please check out our job posting!

re: YNAB 3 (http://tinyurl.com/mnlyxm). This week we went from 2 FT devs to 5. Here’s hoping we maintain a scorching development pace.

A scorching development pace = a scorching burn rate of cash.

For years I’ve operated with YNAB always in the black. Always. Even when the black was approximately $42 (February of 2005).

The other day I looked at what the developers would cost weekly, revenue projections, and money saved and realize we’re going to be deep in the red until YNAB 3 launches. Based on our burn rate, and the cash we’ve saved (operating on a budget, afterall) I think we’ll be just fine.

But it’s going to be a lot closer to the edge than I’ve been with the business (or personally) for years. The closest feeling I can get is when I did YNAB full-time during the summer of 2006 while I was studying for the CPA exam (that was when YNAB Pro was being developed!) and waiting to start my “real” job several months later.

In light of the cash flow projections, and the resulting knapp (German) feeling I was experiencing, I did what any good husband would do. I called Julie to let her know.

Jesse: Hey Julie. I was running the numbers for how much development we still have left to go, how much we’re going to be bringing in, and how much we have saved in the business to tide us over and…things are going to be tight for the next while.

Julie: How tight?

Jesse: Well, you know how your birthday is in a few days?

Jesse: We just need to tighten the belt as much as possible and put off all discretionary purchases. I don’t want to have to tap our emergency fund (an aside: because it took us so LONG to get it!).

Julie: I don’t either. What about groceries?

Jesse: Yeah, we probably should feed the kids less.

Jesse: Just avoid discretionary stuff.

Julie: Okay.

And THAT is why I love my wife.

But this is the real story.

Since that discussion, I have been loving life (even more; I’m a natural life-lover). I feel like we’re back to the Good Old Days of simplicity. Decisions are already made. No, we’re not eating out. No, we’re not going out. No, we’re not buying that. This is easy. It’s like I’ve rediscovered my discipline from my college-poor days.

How can I keep this feeling indefinitely?

I’m not sure. All I know is that it’s a welcomed feeling of control over my money. It is just money after all. And I feel like I’ve rediscovered a part of me, and a part of our relationship, that was stifled by the List to Make the House Awesome (It’s separate from the Budget where we were throwing extra money, working our way down the list of prioritized things we want for our house to be awesome. I believe there are 18 items and we’ve managed to cross off two.), social events, etc.

Someone please point me to this post once the finances return to normal.

Takeaways:

You don’t need that. Don’t buy it.

Go home to eat dinner.

Repair that. Don’t replace it.

Increase memories and decrease stuff.

Simplify.

(An aside after re-reading this and debating about even posting it: The message in this is the Good Old Days of simplicity a la Joe Dominguez’ Your Money or Your Life — not our temporary cash flow crunch a la [insert bank name here]. We’re fine. You really think I’d do things any other way than to be extremely certain that everything will be okay? No. We’re not offering the option of pre-paying for YNAB 3. Though I’m flattered at the offer.)