YNAB You Need A Budget

[cochin]

YNAB definitely helps me with the Baby Steps.
For a little over a year, I was using the Allocated Spending Plan spreadsheets from JimFPU's website
(THANKS JIM!), budgeting a month at a time and allocating each paycheck(2 per month).
I had my BEF by Oct 07, and was working on debt.
Two points of awkwardness doing the Baby Steps before YNAB.
DR wants the BEF to be somewhere accessible but not in the day-to day checking account.
Mine was in Emigrant Direct online--2-3 days away by EFT. Makes you think first before tapping it--but not good
if you need it NOW.
And, I was budgeting the checking account (BEF and savings were elsewhere). A zero-based-buget was taking my account
perilously close to $0.00, especially if I was withdrawing cash for envelopes. A slight math mistake by me or the bank would have been bad!
Anyway, shortly after getting my BEF completed, I was hit by a Murphy that was bigger than my $1000 (car damage).
I emptied the BEF and put the remainder on my low interest credit card--and felt horribly discouraged.
Found YNAB (over on the LLNOE forums) and started using it from Jan 08-- I knew the Buffer was what would make the steps work for me.
And it has. Even a partial Buffer with the BEF saved me from using credit recently (big vet bill).
cochin

[internettie]

I started with the DR plan in October of 2007. We had reached BS3 in November of 2007 but didn't get any traction on it until we found YNAB (through a friend who had bought YNAB). I had been using an allocated spending plan but it was never matching my checking account. I was always frustrated and wasting hours trying to figure out where the mistake was. And I never quite knew what to do with the "left over" money. I'd just let it sit in the balance without giving every dollar a job. In April we saw DR live and were really motivated again (gazelle intensity) but were in the same place with the budget. Frustrated. Then in April 2008 I found YNAB. Man, it's the best thing since sliced bread. lol Now my budget always matches my checking account. I don't spend endless hours looking for mistakes. And the most important thing is that every dollar has a job every day. There's no money just floating around out there waiting to be spent. This weekend we'll have the buffer in place (in addition to our $1000 EF). We are really looking forward to being a month ahead on bills/expenses.

The best change though is how everything is allocated out so, to me, it's spoken for and I don't touch it. With the allocated spending plan I was using I was always changing dollar amounts around and kind of guessing. (I'm sure that's why I had so many mistakes to figure out! ). I know it's just a Jedi mind game, but seeing everything in it's category makes it 'unavailable' for impulse spending.

I love Dave's plan but I think I love YNAB more now. My best friend and I talk about what we're doing in YNAB almost every day (even if we're just entering a register transaction). It's so encouraging. I think we are both completely focused now that we are YNAB'ing.

I think that YNAB doesn't just fit in with the DR plan but enhances it.

Thanks for such an awesome program, Jesse, et al.

[JimFPU]

YNAB definitely helps me with the Baby Steps.
For a little over a year, I was using the Allocated Spending Plan spreadsheets from JimFPU's website
(THANKS JIM!), budgeting a month at a time and allocating each paycheck(2 per month).

You're very welcome.

I have to agree with the rest of what you said too, about living paycheck-to-paycheck so to speak, even while being on a written budget. We did it for almost 5 years before YNAB. (I'm still working my brain around the Buffer, but I'll get there. I'm still trying to get all the accounts to balance...) Anyway, Once I bought YNAB, I figured out we were still PTP although we had the BEF (growing to FFEF Step 3). Now we're funding all of our envelopes at the beginning of the month, have a buffer in place (we chose to use two checks worth of income as the buffer) and we can essentially pay the bills as they come in, and take out all the cash we need once a month. We've only been doing YNAB for about 2 months now, and have already made an extra house payment, instead of trying to budget the 'extra' check from last month (26 PP/year) to spend on stuff or whatever. We're kinda working Steps 2,3,4 & 6 all at once, with a focus on 2 for the second mortgage, and 6 for the first. We are considering intense focus for 3, but I have to wait and see if Home Depot or Lowe's call back...LOL!

[mbowling]

Once I bought YNAB, I figured out we were still PTP although we had the BEF (growing to FFEF Step 3).

Sorry to pick on you Jim but this sentence brings back memories of some of the government contracts I've worked on. Some sentences in technical manuals were more acronyms than actual words. Could someone please help me translate.

I understand YNAB.
I'm pretty sure that PTP = Paycheck to Paycheck.
What is BEF and FFEF?

Thank you.

[Mudie]

Once I bought YNAB, I figured out we were still PTP although we had the BEF (growing to FFEF Step 3).

Sorry to pick on you Jim but this sentence brings back memories of some of the government contracts I've worked on. Some sentences in technical manuals were more acronyms than actual words. Could someone please help me translate.

I understand YNAB.
I'm pretty sure that PTP = Paycheck to Paycheck.
What is BEF and FFEF?

Thank you.

BEF = Baby Emergency Fund. Typically $1000 as per what DR (Dave Ramsey ) promotes
FFEF = Fully Funded Emergency Fund. Typically 3-6 months of expenses

Steve

[Mudie]

I'm still working my brain around the Buffer, but I'll get there.

Read this article for a different way of looking at it that may make it clearer for you.

Steve

[Patzer]

BEF = Baby Emergency Fund. Typically $1000 as per what DR (Dave Ramsey ) promotes
FFEF = Fully Funded Emergency Fund. Typically 3-6 months of expenses

. . . and the non-Ramseyites among us were translating this as:

BEF = 3,055
FFEF = 65,519

Patzer

[mbowling]

I'm really feeling ignorant today. First it's acronyms that I don't understand and now it's funny numbers that I don't understand.

Why would the non-Ramseyites among us translate this as:

BEF = 3,055
FFEF = 65,519

[llambe]

What Patzer really meant was "the non-Ramseyite hexadecimal using computer geeks"

Lael
hexadecimal = 0-F instead of 0-9 so BEF and FFEF are numbers in hexadecimal

[Mudie]

What Patzer really meant was "the non-Ramseyite hexadecimal using computer geeks"

Lael
hexadecimal = 0-F instead of 0-9 so BEF and FFEF are numbers in hexadecimal

I guess I'm going to have my Geek Club membership card taken away as I read Patzer's numbers as his (much larger than Steve's) actual $ numbers.

I wasn't really tied to that thought completely but as I pondered it it was a real moment.

$3,055 monthly expenses?
$65,519 3-6 months expenses!?

"Wow, Patzer is making a whole lot more than Steve..."

I'll mail my Geek club card in now...

Steve

[Patzer]

I guess I'm going to have my Geek Club membership card taken away as I read Patzer's numbers as his (much larger than Steve's) actual $ numbers.

I wasn't really tied to that thought completely but as I pondered it it was a real moment.

$3,055 monthly expenses?
$65,519 3-6 months expenses!?

In a futile attempt to salvage a shred of dignity, I think I'll claim that one of the characteristics of geeks is the tendency to make jokes that fall flat. Yeah, that's the ticket!

What I should have written was something like, ". . . and I was wondering why all these Dave Ramsey followers were budgeting in hexadecimal!"

Patzer

[jesse]

I’m an accountant, so that's my trump card.

But I must admit, the hexadecimal stuff I missed.

[sweetbasil]

I'm listening to Dave right now.

I think Dave really excels at getting to the heart of the issue and changing the psychology behind how we view money. People love to argue that his debt snowball methodology isn't always the least expensive method, but he makes it clear that the debt snowball is primarily about changing perception and behavior. I think this is key. If you don't truly start to understand that the borrower is always slave to the lender, then you're leaving open the door for future problems.

I've been doing our budget on a spreadsheet for years, but since we found out that DH is going to be laid off (a good thing, actually!) we decided to get serious about giving *every* dollar a job, and more importantly, recording every single expense. We weren't too great about keeping track of all of our receipts in the past and some months we were clearly exceeding our budget. DH's research led us to YNAB.

It's only been a little over a month, but so far we really love it! We're looking forward to the updates and hope they will include many of the tweaks that will make it more user-friendly.

So in a nutshell: Dave=Psychology; Jesse=Logistics

[Kinga]

Yeah I agree, Dave Ramsey inspires and excites the imagination, making budgetting and getting out of debt sound so cool and do-able that you just want to try. In fact, I only have one debt and I often WISH I had a number of them just so I could try the Debt Snowball cos it sounds so much fun and fulfilling to be knocking of those debt targets one by one! That's the power of the Dave Ramsey methodology and balloon busting delivery.

If your heart and mind are engaged, your actions will follow suit. Guard your heart for out of it flow the issues of life. As a man thinks in his heart, so he is or will be.

YNAB gives you the overview of your entire financial situation to enable easy implentation of the changes you are now so fired up to commit to.

[JFROBUDGET]

My comment of a "perfect fit" is more of a sales and marketing comment than a methodology fit. There are millions of Dave Ramsey listeners who would be very excited to learn of YNAB. Dave's listeners and YNAB users are like-minded people. Both are seeking more control and understanding of their financial situation. Some kind of relationship between the Dave Ramsey show and YNAB would be a big step forward in establishing the YNAB brand.

As a new YNAB user (what an eye opener to budget instead of tracik! no wonder we were using our credit cards every month...duh!)...as I was saying, we are new to YNAB and have discovered DR at the same time (from the thread on favorite money authors).

I do think that YNAB and DR have so much common ground that they work well together. HOWEVER, the 4 rules and the DR baby steps aren't exactly the same so I guess it would be unlikely that DR would endorse the product 100%. YET if YNAB had a special Dave Ramsey version where it was tweaked to accomodate the baby steps and the buffer becomes part of the emergency fund and rainy day fund, then I think you'd have a whole new MARKETING OPPORTUNITY. (Car Replacement fund and Stupid Tax would be two new categories!)

As I understand it, now there is YNAB excel, YNAB Pro and YNAB Mac, so YNAB FInancial Peace would be just another choice or version.

Jennifer