Alright, here we are on the last day of the course. I hope you’ve learned a lot, and enjoyed it as much as I have. It has been a lot of fun for me.

Today I’m just going to share with you a bit of motivation that comes right from my own life. I want to illustrate with the best example I have (our own) how absolutely powerful a budget can be in your life. Remember, it is the foundation of all other aspects of personal finance. It’s the tree. The good stuff is the fruit. It’s the sweet grandma with the gooey cookies. It just wants an hour or two of your time each month.

It was November of 2002 and I was newly engaged. People say when you’re newly married that you live on love. But could love purchase my (overpriced) textbooks for the coming semester? Would love put food on the table?

Probably not.

So there I was, sitting in front of a computer in the library of the university. My fiancée was just across the hall working for $8 an hour. I would be leaving for my job in a few hours to make a bunch more – $10 an hour. I just sat there wondering exactly how we were going to manage. We were both full-time students, working part-time jobs. In our best combined month we would maybe make $1,200. Looming in front of us was the purchase of a car (neither of us had one), and three more years of school for me.

I had just recently taken a course in Microsoft Excel. I thought I could make a little spreadsheet that would help us manage our finances. It was obvious we would need to manage what little we had.

A few weeks later I basically had the spreadsheet finished. We were getting closer to our wedding day and those things naturally took precedence over any “dinking around” I wanted to do on the computer. We were busy people in love and in school!

We were married the following February. Everything was absolutely great. I was definitely excited to be starting a new chapter in our lives.

I mentioned in Day Three how the first rule came about. I basically just thought it would be easier to budget if we lived on last month’s income (and oh, how it is). I tailored the spreadsheet so that last month’s money would flow into the current month. Some wedding money was our “buffer”. I’ll admit it – we had it easy.

Rule Two seemed pretty obvious. Every dollar should be accounted for. It just didn’t seem right to have some money sit there not doing anything. It was pretty easy to have the spreadsheet tally up the total available money each month, and have that reduced as we budgeted into our spending categories.

The budget meeting was an interesting thing when we first married. I thought it’d be more of a negotiating thing where she’s guessing what I’m going to say, I’m guessing what she’s going to say, and neither of us wants to say a specific number lest we leave some money on the table. It wasn’t really anything like that. Not at all.

Basically we would just sit down together and look at our money situation. It was a pretty healthy relationship exercise. It helped us face reality. It helped us decide where we needed to focus. It motivated me to squeeze in a few extra hours of work whenever possible. It motivated Julie to try and land a good job once she graduated. It really brought us together as a newly-married couple. There weren’t any fights. There weren’t any hurt feelings. There were just two people sitting there trying to figure things out – compromising, and learning what their spouse thought about money. It’s been an extremely positive aspect of our marriage thus far. I don’t see that changing any time soon.

Rule Three, I hate to say, also seemed pretty obvious. We had big one-time expenses that would definitely need to be paid. But we knew we’d be sunk if we pretended like we would have all that money in one single month. I made sure the budget tallied up any surplus balances each month so that they would be cumulative and grow over time.

I remember the first time we were really nailed on one was with our license and registration tax that we needed to pay each May. We had been married over a year when we discovered that we owed the State $150 just so we could re-register our vehicle. I won’t go into the aspects of this particular highway robbery, but we were caught by surprise. A hundred and fifty bucks was (and still is) a lot to us. We learned and adjusted. (How did we adjust? $12.50 goes into “License and Taxes” each month. We don’t even feel it now).

Rule Four I actually stumbled upon by necessity practically. As discussed on Day Eight, I didn’t like the idea of continually being punished for mistakes in the past. And I REALLY liked the idea of starting with a clean slate each month. We would be able to sit down and figure out exactly what was happening for THAT month and see if we couldn’t make things happen to our favor.

The problem was that you would have a surplus in some categories (say Christmas) because you’re saving up all year for it. On the other hand, you would go over with groceries (as we did and still do). So if we did overspend by $50 in groceries, it wouldn’t cause us to overdraft in our checking account – far from it. We had some of the CURRENT month’s income in there now, along with various category surpluses (such as Christmas).

But the problem was that the $50 was really gone. And the Christmas category, which had “paid” for the overdraft, was still showing the same surplus. I battled with the problem for a while and finally came up with the idea of taking overdrafted balances out of next month’s available money. That way, any surplus categories that did pay for overdrafts of other categories were reimbursed. It was all good.

I tweaked the spreadsheet to do just that. Since then it’s been on autopilot and I don’t have to think through my reasoning each and every time.

To be honest, I really didn’t know what we had. I thought it was just a somewhat clever (and somewhat obvious) way of budgeting. The spreadsheet started looking pretty good and doing its thing pretty well. We used it for a couple of years without much thought about it.

Since we were still in college, it was pretty easy for us to talk about our finances with friends. When everyone is broke, money isn’t a sensitive issue. I would actually show them our budget. Our friends would ask me for a copy. I don’t think one of them actually used it though. It was too tailored to our specific situation. (And getting one month’s expenses is no picnic either).

Well, our first child was on the way in June of 2004 and that got me thinking. We had always wanted Julie to be able to be a full-time mom. She was really looking forward to it. I had gotten a part-time “internship” at a company near the university. We figured out if I worked 30 hours per week straight through school, we’d be able to get by okay.

I didn’t think 30 hours per week would be too easy if I wanted my grades to be somewhat respectable. So I presented Julie with the idea of selling our budgeting system online. She didn’t think it would fly, which I still remind her about to this day.

I got cracking on the idea though. I worked tirelessly on making the budget as user-friendly as possible. As I tried to explain the budget to my potential audience, I began to truly appreciate what we had here: a budgeting system that didn’t take a lot of time, that worked. It had worked for us – and if it worked for us it would work for just about anyone.

So here we are today. What was a “hobby” site is now a full-time hobby site :). I became a CPA and then immediately let it lapse to work on YNAB. I did graduate with a graduate degree (Masters of Accountancy, if you were at all wondering). Our little boy is now five years old, with a little brother (3), little sister (1) and another one on the way.

Life is good. It isn’t luxurious. The car with the broken door handle on the passenger side WAS my car and that WAS my grandpa that broke it (Day Seven). I DID have to run around to the other side to help my fair lady out of the car. If it was icy, I would be extra careful when running.

But we have something that so many people don’t have. We have an easy-to-use, functioning budget. It may seem like I’m attributing too much to the budget, but I don’t think so. We have never fought about money. We’ve never gone into debt. We own our used cars outright. At the end of a Master’s degree, where most people are at their poorest, we were at our richest! (Rich is very relative here, but you get my point). Our current focus is to save for a down payment on a house.

I look around me and see people living above their means, with nicer cars, TVs, toys, apartments, etc., and I can’t help but feel a bit for them. True happiness does not revolve around the material things you have. True happiness comes from PEACE. And PEACE comes from living within your means. If you want to live within your means, well, I think you now know what to do.

The Rules are there for you to implement. I’d be out and out lying if I didn’t tell you that I’m hoping you’ll give the YNAB system a try. It’s evolved into a pretty nice piece of work, if I may say so myself. I’ve done my best to outline questions and answers in the FAQ, write extensive articles about the principles, and make it as easy to implement into your life as possible. If it doesn’t work for you, please let me know why. I’ll gladly refund the purchase.

Also, remember that the Rules can be used independent of any software. You could even make your own system that does the same thing (don’t underestimate the time involved though!). Implement the Rules if you do anything. They are powerful! They will help you!

Honestly, the Rules seemed to kind of fall into my lap. Looking back now on that day in November, when I was feeling pretty stressed about money, I don’t know, maybe I can chalk it up to inspiration. But at that moment I just thought to myself, “I think we need a budget.”

We did.

And so do you.