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19 Jan 2018

How One Couple Crushed $33k in Debt in 14 Months

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by Shannon Marie

Nearly one year after they were engaged, Brendan, a digital content strategist, and Alisha, an administrative assistant, faced a very disappointing possibility: postponing their wedding.

They realized funds were tighter than they thought during a conversation with Brendan’s parents. Alisha said, “We thought, originally, that we would have a large wedding. But, even with help from our families, we didn’t know how we could do it. We had nearly $15,000 in credit card debt, two car loans, two student loans, monthly bills and whatever other unplanned expense would arise.”

With a ton of debt and no savings, Alisha, now 27 years old, said, “It felt as though we were behind everyone else. People our age were already having kids, pets and buying houses. We felt like we were doing everything right, yet, not getting the results we wanted.”

Something Had to Change.

See, the couple had tried budgeting—at the time, they’d been using software that starts with an ‘M’ and rhymes with ‘hint’—it’s just that it didn’t seem to be helping them (so uncool) …

Alisha said, “We felt defeated by the lack of success in any previous budgeting endeavors. Our ‘financial future’ didn’t feel like it’d be much different than how ‘today’ felt—broke. We were going to need to pay off a lot of debt before we could justify putting money away into savings [for the wedding].”

Then They Found YNAB.

Their outlook changed when Alisha heard about YNAB at work. Brendan said, “A coworker mentioned to Alisha that he had money set aside to buy Christmas gifts for the first time … he explained how it was made possible; YNAB.“

Skeptical, but still intrigued, Alisha and Brendan decided to give YNAB a look. Brendan said, “Both of us started [using] YNAB … and loved it.”

He admits that, “It took us a while to fully change our views on money because we were using Mint at the time. Long story short, after a few stumbles and hurdles we are using YNAB to it’s full potential.”

Understatement of the Year!

Alisha said, “We started a new YNAB budget in May 2016, after opening a joint bank account. From May 2016 to July 2017 we paid off at least $33,031 [in debt]. Before that, we were paying off debts separately, in separate YNAB accounts.”

Once they merged their money and their YNAB accounts, Brendan and Alisha had a clearer view of their financial picture (and their priorities). They wanted to be debt-free, pay for their wedding, and buy their first home. And with YNAB, they feel confident!

So, Why Did YNAB Work?

When we asked Brendan and Alisha why YNAB was different, five themes showed up. Let’s take a look:

1. A New Money Perspective

Alisha said, “YNAB made money exciting. We felt empowered paying off bills.”

She described how Rule One, Give Every Dollar A Job, made budgeting a totally different experience. The couple was used to simply tracking where their money had gone—not thinking ahead.

Alisha said, “YNAB was different than everything else we had tried because it was fun. We enjoy planning where our money will go before we spend it. [Now, our budget is] a planning tool, first, and a tracking tool, second. YNAB truly changed how we see money and the decisions we make.

With that shift in perspective, came a shift in their attitude. Alisha said, “When we start spending outside of our categories, we compare it to stealing from our dreams—the things we really want, like a house, a dog and money to start up Brendan’s business.”

2. A Team Effort

With YNAB, Brendan and Alisha finally started seeing the bigger picture—the one that combined their finances. And they described it as one of the most positive changes in their money story. Alisha said, “Soon, we were truly on the same team regarding our finances and goals for our future.”

Joining forces (and bank accounts) helped them take their efforts to the next level—and made it crystal-clear that credit cards weren’t helping them get the things they really wanted. In fact, the interest was costing them big-time. Alisha said, “We started to see how important and rewarding it felt to pay off a credit card in its entirety, and use cash [instead of credit] to pay for a new washing machine and car repairs.“

Alisha said, “The credit card accrued interest and more unplanned purchases, continuing the deadly debt cycle. YNAB made us feel in control of our future … [we could see that] our wants and dreams were possible, and we stopped using debt to make ends meet.”

3. Convenience & Flexibility

Alisha said,”We stuck with YNAB because it was easy to access and use … [It] helped us plan, and kept us accountable for our spending. A joint income isn’t easy to manage when two people are spending based off of the amount in the bank, rather than the amount [in the budget].”

They stayed on track using the mobile app. Alisha said, “[The budget] held us accountable. We use the app after every transaction. It helps us see how much of a category is getting used by the other person, which in turn helps keep the coffee shop purchases in control, mostly … “

And when the coffee (or entertainment) budget gets a little tight, they enjoy Rule Three, Roll With The Punches. Alisha said, “Having the ability to move extra money from other categories to ‘Dining Out’ for a spur-of-the-moment date night is always a good feeling.”

4. The Snowball Effect

No, not a debt snowball. OK, actually, maybe a debt snowball? (I can’t vouch for whether Brendan and Alisha used that method!) Anyway, I’m talking about the snowball effect of one win leading to the next. See, as Brendan and Alisha paid down their debt, they felt better. Good habits were, literally, paying off—reinforcing their motivation to keep going!

Alisha said, “YNAB makes you feel proud of your small accomplishments. When you can pay a bill this month with money saved last month, it makes you want to replicate that. The momentum … is incredibly addictive.”

She added, “It makes you really aggressive and proactive about your financial goals, which in turn reduces the amount of stress you have.”

5. Community & Real Talk

Since “getting addicted to YNAB” Brendan and Alisha are much more open about money, and they love to share YNAB with their friends and coworkers.

Brendan said, “We’ve found that YNAB takes away the taboo from talking about finances with others. Any chance we get, Alisha and I both share YNAB with our friends. They ask how we can afford certain aspects of our lives. For us it’s simple, we plan with YNAB, and only spend within our means.”

In fact, now all of Brendan’s coworkers use YNAB, and they talk openly about their budgets. They say that, if you want to succeed, surround yourself with people who are working at the same goal, a.k.a, become part of a community of like-minded folks. When you’ve got a shared, similar goal with friends? You’ve got a built-in support network!

Brendan said, “So many individuals our age don’t realize how the actions they take, today, will affect them in the years and decades to come. We only hope that, by sharing our story with our friends and others, they see that it’s possible to make positive changes, and still enjoy life.”

Words of Wisdom

If you’re facing a a big budgeting goal, Brendan and Alisha left us with a few words of wisdom that might help! They said:

Don’t Give Up.

Remember that “Rome wasn’t built in a day!” Alisha said, “You’ll make mistakes, and you’ll learn from them. Every once in a while, you might feel like you’re taking two steps back, so use YNAB to make a plan to go three steps forward the next time.”

Don’t Use Credit!

Brendan said, “A very important saying, that we use on a daily basis, is ‘Cash before credit!’ “

Alisha added, “We had to stop treating our credit cards like disposable income.”

Do Try YNAB. (It’s Free, for 34 Days!)

When Brendan first emailed me, he said “I believe so much in your product that I have signed up everyone in my back office, and—on a daily basis—have coworkers coming up to me with YNAB questions! THANK YOU SO MUCH for everything and also your continued classes.”

What Are You Waiting For?

Attend one of our free, online classes. We’d be happy to answer any of your questions, and who knows? Maybe the next success story on the blog could be about you!

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January 17, 2018 | by Shannon Marie

The Top Four Reasons People Quit Budgeting—and How...

January 8, 2018 | by Lindsey Burgess

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Remember, budgeting is not restrictive. You won’t be spending less, you’ll be spending right. You can do this! Today. Right now. What do you have to lose? Except all that debt and stress. (Ok, so kind of a lot.)

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