YNAB You Need A Budget

[philospher77]

Hello!

This is more of a general topic of discussion than anything else. I see posts on the forum with some regularity where one person is talking about how their spouse, significant other, etc. just "won't stick to the budget". And a lot of the time, it seems to be because they don't want anyone telling them "how to spend their money". Or they feel like a budget is "too controlling". And let's face it, budgets are generally proposed as ways of controlling spending, increasing savings, all of that.

I am curious if anyone in this situation has tried changing the term "budget" to "spending plan" and seen if it made a difference? After all, that's what YNAB really is: your plan on how you are going to spend the money you have. That might be at some point in the distant future, but I don't think any of us have a budget category of "money I never plan on doing anything with". And I am thinking that people who may be resistant to "budgeting" might be more willing to sit down and work on a plan to spend money. This would include talking about what you want to spend money on, how soon you can spend it, and what, if anything, you would be willing to give up today in order to get to spend that money sooner. You might start off with the grandiose "when we retire, what are we going to do? Travel? Give money to the kids? Start up that little shop we've always wanted?", and then the more immediate dreams: vacations, new car, buying a home, getting that sweet new electronic gizmo, etc. Then start talking about what you need to do in order to get there.

Has anyone tried this approach and had it work?

[jesse]

Ramit Sethi, a friend of mine, and also my polar opposite with how brash he is, rants about how budgets don't work. But in his (excellent, but brash) book, he promotes a spending plan.

Wha?

I give him a hard time about taking such a tough stance on semantics

[Patzer]

Ramit Sethi, a friend of mine, and also my polar opposite with how brash he is, rants about how budgets don't work. But in his (excellent, but brash) book, he promotes a spending plan.

Wha?

I give him a hard time about taking such a tough stance on semantics

If we wanted to argue semantics, I'd claim that YNAB isn't a budget as most people understand the term "budget". It's a spending decision tool. But it's easier to say "budget" than "spending plan" or "spending decision tool."

If I were going to pick nits about semantics, I'd also say that YNAB does not budget income; it budgets net cash on hand. That's technically accurate, but a tough concept for some new people to grasp. So we talk about budgeting "income," which is really budgeting additions to net cash on hand.

There's no end to the petty arguments we could get into if we all insisted on linguistic precision. So perhaps the best stance is to accept the terminology YNAB uses and explain where the methodology differs from commonly used definitions or assumptions. Which is pretty much what we do on the forum.

Patzer

[brad]

I agree that it's easier to say "budget," but as the OP said it has connotations that can scare people off. I avoided budgeting for most of my adult life, in part because I didn't think I needed to but also because part of my job involves managing budgets and having my own personal household budget felt too much like work to me.

All of that changed when I read a review of YNAB and saw the first rule spelled out: give every dollar a job. I liked that idea. Suddenly I understood that budgeting doesn't have to mean establishing and sticking to monthly allowances (which is what most people think of when they see the word "budget"), but rather it's about managing your finances intentionally. It's about taking control and making the decisions rather than having them made for you.

I still think YNAB is more of a budget than a spending plan, because it involves monitoring your transactions and adjusting allocations across categories over time. That's exactly how I budget professionally in my job. Over the years I've managed about $30 million in contracts and grants, and the way we do it in YNAB is exactly the way we do it at work: we start out with a given amount, we assign all those dollars jobs, and then as the scope of work changes over time we move dollars from one category to the other, always staying within the total amount of money we have to play with.

[Will]

YNASP just doesn't sound right.

[MRKlink]

YNASP just doesn't sound right.

+1

[heathler]

Though Patzer certainly has a point, there is definitely a distinction in target audience between a reluctant spouse that philosopher77 paints a picture of and someone hanging out on the YNAB forums. Word choice can be very powerful in persuasion, and I think philosopher77's suggestion could be very helpful in some situations.

[litterbug]

YNASP just doesn't sound right.

And I am thinking that people who may be resistant to "budgeting" might be more willing to sit down and work on a plan to spend money. This would include talking about what you want to spend money on, how soon you can spend it, and what, if anything, you would be willing to give up today in order to get to spend that money sooner. You might start off with the grandiose "when we retire, what are we going to do? Travel? Give money to the kids? Start up that little shop we've always wanted?", and then the more immediate dreams: vacations, new car, buying a home, getting that sweet new electronic gizmo, etc. Then start talking about what you need to do in order to get there.

This is precisely what seems to work with people who who are resistant to the idea of controlling the flow of money toward or away from different goals, whether you call it a budget, a spending plan, a cash flow funnel, or My Great-Aunt Lucy. Yes, the terminology matters, but the question is always how to get the idea across that it's not about doing without; it's about building resources for what you want to do.

The thing that seems to cause the most resistance is a fear of deprivation, and if one spouse is trying to get the other to spend within a budgeted amount, there's an added fear of being manipulated or controlled. No matter what you call it, if you're asking someone to change their spending habits, they have to be invested in the way the cash flow is being changed. They have to learn the real tangible benefits of budgeting.

When I explain my YNAB experience to others I describe budgeting as a tool to help me direct my money towards the things that matter to me instead of frittering it away on things that don't, and I point out that the former includes things like breakfast out with my best buddy, skiing, expensive cat food (for the cat, not me), and pricey free-trade small-batch-roasted coffee. This gets the point across: budgeting isn't about deprivation, it's about confidence that I can do the things I really want to do by simply paying attention to my spending choices. It can even make budgeting sound almost appealing.

[bookman413]

Patzer is the man.