YNAB You Need A Budget

[timrw]

My wife and I had a house - a house that was worth less than what we owed on it. Neither of us were interested in being landlords, and we knew that we wanted to dump it. Thanks to YNAB, we were able to put away money every month toward eventually selling it.

In the interim, we paid off all our credit cards, student loans, car loans, used the 2 extra paychecks in a year (we're both paid every 2 weeks) to shift to living completely off our previous month's income, and put away a good chunk of cash in an emergency fund. The house was the only piece hanging over our heads.

Well, we put it up for sale and found a buyer. It's a testament to the YNAB method and software that we were able to write a check for $27,000 to bring to closing without having to borrow a cent. We used the savings we'd set aside every month, the extra paycheck we got in August, and just barely had to dip into our emergency fund. Looking ahead, we'll be back at a fully funded EF by the end of this month or next.

Today, I logged on to our mortgage website and was greeted with "Outstanding Principal Balance: PD IN FULL". That's the last domino to fall - as soon as we get the EF back up, we'll be fully buffered with an emergency fund and 100% debt free. This feels awesome! - thanks, YNAB!

[MRKlink]

Wow! That is fantastic!!! Congratulations!

[dandelion]

That's awesome! Congratulations!

[Revi]

An incredible feat, congratulations!

[liandor]

That gave me the shivers...wow! Way to go!

[Patzer]

It's a testament to the YNAB method and software that we were able to write a check for $27,000 to bring to closing without having to borrow a cent. We used the savings we'd set aside every month, the extra paycheck we got in August, and just barely had to dip into our emergency fund. Looking ahead, we'll be back at a fully funded EF by the end of this month or next.

Well done!

You have demonstrated one of the most powerful things about YNAB - it helps you see what purpose your money has, so you're motivated not to spend it on less important stuff. And that's important, because when something really important - like getting out of that house - comes around, you have the funds to do what's really important to you.

Patzer

[timrw]

You have demonstrated one of the most powerful things about YNAB - it helps you see what purpose your money has, so you're motivated not to spend it on less important stuff. And that's important, because when something really important - like getting out of that house - comes around, you have the funds to do what's really important to you.

Precisely - being able to easily align short-term actions with long-term plans and goals makes a huge difference. By the time everything came together, I was shocked how much we had actually put away and how little we needed to dip into reserves.

[SR41]

Fantastic! Congratulations!

[cfogle6]

You have just given me a tremendous amount of hope; we have been told that we would probably end up bringing a $7k check to closing if we were to have to sell any time soon, and at the time it seemed huge.

We are working towards saving that up in case we do have to suddenly move. We are military so sometimes moves come at unexpected times. Your example has given me inspiration, though.

[jessiebird]

Congratulations. How long did this all take?

[timrw]

[W]e have been told that we would probably end up bringing a $7k check to closing if we were to have to sell any time soon, and at the time it seemed huge.

This was an interesting evolution for us as well. Initially, it was nearly balking at a sale with a "We're going to have to spend how much?". As time went on, it got more and more palatable, especially when we got a live buyer with an offer in hand. At that point, our attitude switched to "You mean all we have to do is write a check and this all goes away? Where do we sign?!?" Looking back, I almost wish we had done it sooner - it would have meant little larger hit to the reserve funds, but the overall reduction in stress and risk is totally worth it.

How long did this all take?

From start to finish, it's taken us about 4 years to get to this point. Not all that time was nose-to-the-grindstone, since we've only been seriously preparing to sell over the past year or so. Prior to that, we had our emergency fund in place in early 2010 (after we got all our credit card balances paid off), everything but the house paid off in early 2011, and fully buffered in late 2011. That last part took longer because we let it happen "automatically" (i.e. using the 2 extra paychecks over the course of a year) rather than a concerted effort to set money aside.

[Darx]

Congratulations!! Woo hooo!!!!!

[terrabyte]

Congrats!
But does that mean you're now proud renters?

[timrw]

Congrats!
But does that mean you're now proud renters?

We already were - moving out of state with an upside-down house is not a fun experience. We had some family members that were able to help out a little, but not enough to pay the mortgage every month. That was the bonus - not only did we dump the mortgage, but we freed up more cash every month!