The police officer, school teacher, engineer, firefighter, attorney, doctor, professor, designer, manager and rocket scientist all have one thing in common: they’re killing it financially with YNAB.
My husband, Peter, and I got married nearly five years ago. When we joined bank accounts, I had to pay off his overdraft fee to close his account. Not exactly the ideal way to start, but it's how we started. Don't get me wrong, he's not an irresponsible person, just your typical college student trying to make it on his own. At the time I was using Quicken for my banking reconciliation. It's an easy program--nothing against it--but for what I needed, it was way more than I knew what to do with. I probably only used 1/4 of the programs worth, and still had to pay for the whole thing.
I was never into the whole 'budget' thing, so I just entered our income and transactions as they came, and on we went with our lives. It seemed to become a trend, at the end of each month I'd stress out as I watched our bank account rest on dollars or pennies. We were living paycheck to paycheck; and if you've ever been there, you know it's stressful. We'd opened up an emergency credit card, one that would get us by in a crunch and that also provided us overdraft protection for our checking account. I call it our "small credit card". Well, I'm sure you can imagine just how small it became. Now, in the grand scheme of things, the debt that accrued was not substantial, but it was significant to a couple of 21-year-old newlyweds (about $2,000 at it's peak).
Peter is active duty in the US Coast Guard, and, at the time, I also had a steady job, so our income was consistent, but our bills were tight, and that small credit card of ours soon collected our fuel and some groceries each month. It was tough, because if it got to the point where we needed to use the credit card, that meant we didn't have money in our checking, and if we didn't have money in our checking then we couldn't make significant payments on the credit card... vicious cycle. We got by... we always did, and things always worked out for us, financially, but it was always stressful.
Then of course the dreaded happened: our computer crashed. I still had my college laptop to use the internet and online banking, but no banking program... disaster. For about a year I (and I say "I" because I am the one who does the finances in the house) relied on online banking. Anyone who's been in that boat knows how dysfunctional it can be. Waiting for transactions to clear and forgetting about that $50 we spent soon led to multiple overdrafts; usually about one or two a month. We tried a lot of different things to cut our spending, but when we'd see we had that little extra in the checking account we'd want to do something fun with it because we never had the opportunity... and there went our money again.
When we finally bought a new computer, I did some research online for banking programs. I looked at the newest version of Quicken, because that's what I had been familiar with, but even looking at the online samples, it looked confusing. I came across YNAB and read some reviews. Everyone commented on how straight forward and easy the program is to use and how it met all your basic requirements for a banking program. So I decided to give it a shot and make the purchase. YNAB is exactly what the reviews stated; straight forward and easy to use and yes, it meets all my basic banking needs.
At this point, Peter and I had been married for two and a half years, and we were talking about starting a family. I was gung-ho for having kids, but stressed about how the finances would play out if we added all the expenses that kids bring into the picture. My in-laws gave us some good advice about starting a family, they said "if you are waiting until you are financially ready, you'll never be ready". I couldn't ease the stress thinking about two car payments: $800/month (insurance on top of that), a student loan: $5,000 left, and two credit cards: $3,500 combined. Peter's income covered all the bills and I was working at a restaurant, making pretty good money, but I never saved it. It was our extra 'fun money'. We decided that we would start trying to get pregnant when the unnecessary bills were paid off: i.e. school loan and credit cards.
With YNAB I set up a tab for every debt account that we had; the school loan, credit card #1, credit card #2, and the cars. We disciplined ourselves to not spend any of the money I made. We acted as if we already had a baby and I wasn't working, living off of Peter's paycheck alone. Any money that came from my paycheck and tips would go straight towards a bill or into savings for a bill payment down the road. It was really amazing to see the amount we owed fall drastically with each month that passed. I focused on one payment at a time. One of our credit cards was a no interest for 12 months and I had 4 months until that was over. I was determined not to have the interest tacked onto that card. That card was about $2,500. I pooled my tips together each week and by Friday I would take all my earnings, and my paycheck (if I got paid that week) and go to the bank to make a deposit and then write a check to make the payment. As much as I would have loved to have the $2,500 extra from my earnings, I knew what had to be done. It felt so good to write our checks for $200 or $300 each week. It felt even better when I entered the payment into YNAB and I watched that account get smaller and smaller each week.
I set goals for when I wanted each bill to be paid off, and since I was able to lay it all out in the program it was really easy to meet those goals. I actually was ahead of schedule. I paid off that credit card in about three months and the other credit card only took a couple of weeks. I was on the fast track and very excited. Summer time is really busy at the restaurant, so I made a decent amount of money in a small amount of time. I paid off the school loan in about four months. That was a huge relief. We received a Will installment from my grandfather, and as much as I would have loved to have that in savings or an investment, we decided to pay off one of our vehicles. Now we are resting on only 1 car payment to our name.
There have been a few things on Peter's "wish list" that he has not been able to get due to our financial situation. Now that virtually everything was paid off, I cut him a deal. I told Peter he could buy some of the things he'd been wanting, if he went through the whole process himself. He'd never managed any of our banking--never even entered anything into YNAB. I set up a tab in YNAB just for him and taught him how to use it. He researched credit card promotions and applied for a card with no interest for 15 months. He made his purchases and is now responsible for importing his transactions, going to the bank to make his card payments, and recording those payments into YNAB. He reconciles his information inputed into YNAB with the online baking and then each month he gets his credit card statements and reconciles them with his YNAB transactions. He learned the whole process and said to me, "This is fun, I'm learning money!" He's also told me he learned that he didn'tt need to buy everything he wanted when he wanted it.
I've been really proud of him learning this whole process. Now he understands the stress caused me in the past. It's been a lot easier to manage our money and watch our spending, now that bills are paid off. We can put money into savings and budget 'fun money' each month, and the best part is we have a little bit of money left over! Nearly five years married, Peter and I have a beautiful baby girl 8 1/2 months old, and are working on a second! Now I'm a stay-at-home mom, raising our daughter. I've really enjoyed using YNAB (and so has Peter!), it has been perfect for our family's needs. I even recommended it to my mom who has been using Quicken for I don't know how many years, and she is loving it, too! Thank you YNAB for a great program and a great learning process.
YNAB is exactly what the reviews stated; straight forward and easy to use