In the two years since we started using YNAB, we’ve paid off our credit card debt and built up an emergency fund. That emergency fund was a lifeline for us because my husband was laid off at the end of 2019. Despite our best efforts, neither of us secured a full-time job in 2020. YNAB helped guide our financial decisions and reminded us of what was most important during this year.
In 2017, we had a triple whammy set of expenses hit at once: two deductibles and a forgotten annual life insurance payment. I remember getting the bill and feeling my stomach drop.
We started using YNAB in 2018, and without it, 2020 would have felt impossible. My family has been blessed with good health, but we’ve been suffering through unemployment for the last year. Thankfully, we started off with a severance package, a tax refund, and unemployment benefits for part of the year.
We cultivated a scarcity mindset, because we weren’t sure when my husband would get a new job, or how much money I would bring in as a freelancer for any given month. Using what YNAB taught us, we were able to prioritize and save money.
Here’s what we did right, and how YNAB helped our family of five during an unforeseen stretch of unemployment:
1. We Did Less, and So Did Our Kids
Our pre-Covid lives with three kids included lots of activities: dance and music classes, sports, and one-off events like trips to the local farmstead, not to mention extra costs associated with school projects or scout activities. In 2019, we spent $1,823 on activities for our children. In 2020? $310 (thanks YNAB reports for those remarkably accurate figures). Some of the things we bought were arts and crafts projects, lots of bubbles and sidewalk chalk, and an occasional new toy or board game.
2. We Didn’t Give Gifts Like We Did in 2019
We used to give gifts without consulting our budget. We spent what seemed appropriate for the occasion instead of what was appropriate for our financial situation. I’ve been fairly transparent with family and friends about our unemployment situation, and it turns out that people generally won’t suggest you spend money that you shouldn’t! In 2019 we spent almost $2,000 on gifts. We really do still love everyone, but this year we’ve spent $631 so far, and honestly, I’m surprised it’s even that high!
3. We Kept Budgeting for Our True Expenses
I have a lot of individual items in my true expenses category — all the annual bills and money I might need if something expensive needs fixing. I hate a surprise renewal bill, no matter the amount, so I have a lot of individual line items in this section of my budget. Even if something costs $30 annually (ahem, Ring video doorbell) I make sure to budget the $2.50 a month that I need for it. The result? I know exactly what’s coming up in the months ahead, and I know which of these true expenses will get the ax if we can’t cover everything.
4. We Paid Off a Credit Card
We’ve made sound financial decisions during this pandemic, but our old habits came with us to 2020, and we had some lingering credit card debt. In 2019 we transferred our last credit card to an interest-free one, which we needed to pay off by August of 2020 to avoid interest. And we did, despite the regular lack of inflows coming in! We’d worked hard to pay off our debts, and I was not going to let us start accumulating interest on this debt again!
5. We Stopped Eating Fast Food
I challenged myself to no-spend months in 2018 and 2019 specifically to avoid the allure of Jimmy John’s sandwiches. The problem was that the results from just one month were never big enough for me to want to continue. In 2020, fast food became an absolute no. It’s been tempting, and we have caved a few times. The numbers truly speak for themselves after nearly a year of not spending in this category. In 2019, we spent $1,047 dining out. In 2020, we spent $245. This is a potential big spending category for us, and one that I don’t want to return to in 2021.
6. We’ve Got Money Set Aside for Taxes
Some states automatically withhold taxes from unemployment benefits. Our state doesn’t. Unfortunately, we’d already started receiving unemployment when I realized this. I was about to panic, but instead, I calculated the amount I should set aside— 13%— and created a new line in my budget. I started a category for future months at the start of 2020, and moving the money was (almost) painless. Now we already have money set aside for April.
7. We’ve Mastered the Art of Rolling With the Punches
We’ve been in this situation for a long time—an entire year—and we’re still in it. To make things work, we borrowed from budget categories that weren’t as necessary as others. We don’t need new clothes right now, or little indulgences like new books.
We asked other people to be flexible with us, too. If we were allowed to, we postponed paying dues for things like church groups and my sorority alumnae association. Sometimes instead of paying dues, we were able to donate our time, or we negotiated an option to pay later.
8. We’re Thankful
I’m proud of our ability to make (and stick to) a budget. I’ve become more aware of what we do have, and I’m thankful. Using YNAB showed us what’s most important in our financial life, and it’s given us the discipline we needed to get through this past year.
Hopefully, 2021 will be more profitable year for us, and for everyone. 2020 was rough, but I’m grateful for the lessons we learned.
Rebecca Schier-Akamelu is a freelance writer and has been published by Motherwell Magazine, A Long Story Short, and has been an avid YNAB user since 2018.