This week, a new budgeter popped into the YNAB forums with a question: How do you fight the urge to charge unbudgeted purchases to your credit card?
Before YNAB, I would have said willpower: Go for a walk, have a healthy snack or clean out your sock drawer until the mood passes. These are all workable approaches, but now that I have YNAB I realize there’s a tool that’s arguably more effective: awareness.
YNAB has an uncanny ability to remind you of your priorities. Sometimes that’s all it takes to keep you from spending. No willpower required.
Let’s take Penelope, a fictional YNAB user I just made up. She has had a long day at work and is too tired to cook. Tonight, she wants Chinese takeout.
But poor Penelope doesn’t have any money left in her Restaurant/Takeout category — she spent the last of it on pizza just last night. (Penelope is having a rough week at work.)
What should she do?
In the past, she’d put dinner on the credit card and forget about it until the statement arrived, when she’d kick herself for giving in to temptation.
But now Penelope has YNAB.
So before she calls the Panda Palace, she quickly checks the budget to see if any money has magically appeared in the Restaurant/Takeout category. (Spoiler alert: It hasn’t.) She then contemplates taking the funds from her other categories.
She goes down the list: Travel, New Sofa, Entertainment, etc. (Penelope, like you, knows fixed expenses like Rent and Insurance are off limits.)
She refuses to take money from Travel; she is saving up for her college roommate’s wedding in Hawaii and it is her highest priority. She similarly rejects several other categories, finally settling on the only one she might be willing to raid: Entertainment. She has $22 in there, but she was planning to go see “Captain America” this weekend.
Coming to a decision, she says either (1) I’ll wait for the movie to come out on video. Kung Pao Chicken it is. Or (2) I was really looking forward to this. Guess I’ll settle for a bowl of Cap’n Crunch and call it a night. (Of course, she still has the option to put dinner on her credit card and worry about the consequences later — but after a look at her budget, that idea has lost its appeal.)
So, does she end up ordering out or not?
Well, Penelope is fictional, so we’ll never know. But it doesn’t matter. The point is that she curbed her impulse — not through the power of her will, but through the power of her budget.
Going forward, Penelope may notice her priorities changing. She might start budgeting more for takeout. Or, uncomfortable with the pressure that puts on other categories, she might start planning meals ahead to make weeknight cooking easier. Regardless, YNAB is helping her think before she spends.
Penelope is setting a great example. Not bad for someone who doesn’t really exist.