Budgeting IS a gray thing - no black and white. And I'd argue that with YNAB, it's more gray than with other budget philosophies, which is a good thing. But for those of US (raising hand) who often get stuck in paralysis by analysis mode, it can be frustrating. But I believe it's that grayness that makes it so good in general and for us specifically, because it forces us to make decisions...it's not going to tell us what to do. Even when we make our budget, it's up to us to decide if we want to keep the money building in those categories at the end of the month or to redistribute it somehow. When we overspend, we decide if we want to play whack-a-mole or let it roll to next month, to the buffer or to the category. We HAVE to keep thinking about it, and that's a good thing. No set and forget here.
(ETA: There's a whole giant chunk about me...if you just want the 'what do you think about my situation', skip to the last paragraph.
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That being said, as I started YNAB, I was really excited to fund all those categories. I worked out several 'ideal' budgets over the summer when I was broker-than-broke. I had grand plans for what I'd do with the first big paycheck of the school year that included most of summer school as well. But, when the time came, I couldn't see it sitting in an account when I felt the crushing pressure of the numerous, little, picky, high-interest debts we had. So I paid off the little annoying ones. When I got the small ones paid off, the next one seemed monumental, but I still thought I could do it over 'a few' months. I was also saving for summer, which, though I'm not a DR person, could be thought of as having Step 1 done. I opted to continue to throw it all at debt. I think it was paid off in December (along with another tiny, 0% loan which I realized was worth paying off even though it was 0% because I didn't like the account it auto-deducted from). So from August to the end of the year or so, I got rid of four little debts and one sorta big one. There's one slightly bigger one and then two more bigger than that. My goal was to get through the next one this school year. It seemed inconceivable back in December, so I resigned myself to the fact that it would hang around through about 1/3 of next school year. But now that we're almost through a refinance (lowering interest a few percent...saving hundreds a month, balance going up minimally) I can see that next debt
nearly gone by the end of the school year.
And it's the fact that it can be so close to being gone that has me motivated to pay it off, rather than stopping and focusing on something else. This, to me, is the key. I want to be able to 'check something off'. So since I'll be so close to having it paid off on the date that is important to me (end of school year), I think I can move mountains to make it happen. If I wasn't close, I wouldn't be that motivated.
What's funny is that I think it's you (Tracy) who has got me re-thinking this, even before this post. Without going to look at journals right now, I think it's you that's written about building this or that category and even this morning before I got on the board, I thought...maybe I should shoot for some ideal category balances in some things before I throw
everything at that debt.
Before this recent hesitation, my plan has been to get THIS debt knocked out and then take a little 'break' from throwing everything at debt and fund most of the categories I want, and also possibly save for new flooring before the next two CCs. What I'm hoping is that if I fund categories this summer with summer school money, then next year I can save for new flooring relatively quickly and when I've got the money saved, shop around and see if I can get a good deal AND a 0%/low interest loan (because one of the remaining cards is outrageous) and thow the money I'd saved at the bad CC and trade that balance for a much lower interest loan. The other card is pretty good and it's last on the list.
So, for me...it'd come down to how much is left on the CC and the car loan and what the interest rates are. Also, not being a DR-ite...what does he, or more importantly what do YOU consider to be an 'emergency' which your e-fund is there for. $1000 isn't a job loss, major injury, etc. fund. (heaven help us both in that situation) It's an 'oh shoot, I didn't expect that' fund. (In my eyes). In that way, I see it as some of the same money that you might have in home repair (it'd pay for a water heater) or car repair (it'd pay for some mid-range repairs). Depending on the age of your home and cars, it may be prudent to have those categories really funded heavily, or you may be able to roll the dice for a year, betting that you can use the e-fund if necessary. I don't plan to have a specific e-fund category, but I'm going to be looking at about $2k that I'm going to load up some categories with whenever it is that I decide to take my break from debt repayment. I'm hoping that will be in the summer. (These are the lumpy ones, I'm definitely already saving for the non-lumpy ones.)
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