YNAB You Need A Budget

[bowerad]

I'm excited to be able to post in this section after using it for motivation to reboot our financial perspective back in January.

January is when we hit a low point in our personal finance due to combination of factors. After a period of unpaid maternity leave, sudden unexpected major home repair, and high increase (tripling) in childcare costs, we found ourselves in fairly tight financial straits and ~$7000 in credit card debt. For years my husband handled the bills and we used the familiar "check the account balance" system for deciding on purchases. Generally we stayed consumer debt free but never really got ahead. Well, in January, I found him sitting at the computer staring at a list of monthly expenses. He said "I'm not sure we can meet our bills" and (the real kicker for me) "we'll just have to keep money on the card for now."

Anyway, I'm no finance genius but I knew that was not going to be ok. That's when I did some research and came across YNAB. I was slightly skeptical about spending $60 to save money but signed up for the free trial and leapt in.

I'm so very glad I did. We certainly have a ways to go, but since beginning we've paid off all consumer debt and made some progress on building up reserves (full disclosure: we had an unexpectedly large tax refund that helped speed things up a lot). I'm particularly thrilled that our 2013 soccer season tickets are 75% saved for and we have money for a small vacation this fall. The greatest thing about YNAB isn't the things I can't buy or do, it's that I get to spend money on things I care about without any guilt. I paid off the final pre-YNAB credit card debt payment last month and was feeling quite happy. I felt even happier when I realized we were even farther ahead than before when we paid the credit card in full but with income earned after the purchase. Since everything is on-budget, we now use a rewards cash back card for everything we can and I've been using the cashback as extra payments toward 1 student loan.

Now that I've started I'm eager to beef up our emergency fund and rainy day categories and pay down the ~$60,000 in grad school debt we carry. I used to feel like that debt would be with me forever, but I feel much more in control now. My husband also told me he felt like a huge weight has been lifted off his shoulders not having to control the bills and sometimes be the "bad guy" when the account balance was low.

One last thing: a side benefit of YNAB is it made me really analyze our bills and spending. Doing so, I found a fraudulent $20 charge had been added to our cell phone plan for several months and got most of that back. I downgraded our cell minutes. We refinanced our house and will save a little bit each month while shortening the loan. We also cut out anything we weren't getting good value out of. I feel really good we have been able to turn our finances around during a period of our adult lives with the smallest amount of disposable income and I'm looking forward to seeing what we can accomplish in the next few years.

Thanks to all who posted success stories before me! I'm a lurker by nature, but they really helped me buckle down when I needed to.

[dandelion]

Congratulations! This is a very inspiring story! Thanks for sharing it. You guys rock!

[TPro]

Thanks for sharing, this is great! Very happy for you.

[jessiebird]

Congratulations. It really is amazing how much you can accomplish with a little bit of awareness and dedication.

[bowerad]

Thanks everyone! I'm looking forward to having a full year down and getting a good idea on monthly trends. Like for instance, today I'm finding myself woefully underbudgeted in the gifts category and having to whack a mole. For several months I watched the balance grow steadily only to be decimated by Mothers Day, Fathers Day, Graduation, Baby showers, Bridal Showers, and niece/nephew birthdays. Yikes! If only people would wait to have momentous occasions until I'd sufficiently budgeted for them...

[terrabyte]

That reminds me...
We also had a fraudulent bill "secretly" going on monthly for well over a year. I was able to get the entire $340 back.
Thanks to YNAB and knowing where every dollar goes!

[rpgman]

Thanks for sharing ur story.
Congrats on achieving ur goals


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[WateryTart]

What?

[robynleigh]

Congrats to you on making such a huge change, and getting rid of all that debt. I too use credit cards for everything possible and putthe cash back toward savings.

The greatest thing about YNAB isn't the things I can't buy or do, it's that I get to spend money on things I care about without any guilt.

This is really what YNAB is best for and what I love most about it. You start to spend money on things that actually matter to you, not on frivolous items that don't carry meaning to you in the long run. And you don't have to feel guilty because it's in the budget!