Sam, 29, is a TV and new media producer living in Los Angeles.
A few years ago, he and a friend, Jenny, took a trip to Vietnam. Along the way, they met several other travelers who, to their astonishment, had actually paused their careers for months to accommodate longer-term adventures. A couple years later (and now a couple!) they decided it was time to plan their own adventure.
Flash-forward to July 2017, and they’re preparing for a 12-month trip around the globe with cash they’ve saved by budgeting with YNAB.
Sam Is a Lot like You and Me
Pausing your career to travel for an entire year might not sound plausible, but stick with me. Sam is an ordinary human, prone to dropping cash on an impulse, just like the rest of us.
“I would always find a reason to NEED a new 150 dollar item. Sometimes it was a stereo, other times a new backpacking pack, but, a few days after they arrived in my apartment, a new The Wirecutter article would reveal that my life was unfulfilled without another new gadget. This got expensive and kept my student loans payments at the minimum. I would get frustrated about this consumption, but I didn’t know how to break the cycle.”
And this was in spite of his budget. Yep, Sam had a budget …
The only problem was, he treated it “more like a goal” and didn’t feel like “going over” was a big deal (even though he’d done his homework!). Sam said, “I was lucky to understand the checklist of financial success right after college … Unfortunately, all those checkboxes require thousands of dollars to mark complete. YNAB showed me the path to completing them.”
Why His Budget Finally Stuck
So, how did Sam finally commit to his budget? Short answer: he finally saw his financial picture from a long-term perspective and how the choices he makes now affect his future.
See, Sam had previously tried budgeting with Mint. He said, “Mint resets their budget tracker at the first of every month. No matter what happened the month before, the little bars go from a judgmental red to a gray that grants you the freedom to spend. This led to 12 cycles a year of spending, [then] realizing I was about to go over, and then feeling guilty and stressed when I missed my goals. I thought this was fine, because my 401K was still (slowly) going up, and I wasn’t racking up credit card debt …
“YNAB broke this monthly cycle by allowing me to see the immediate effects of day-to-day spending and their impacts on my long-term goals. Overspending one month directly impacts the next. Through regular recording, budgeting and reconciling I interacted more regularly with my finances and the overspending became less frequent. If I wanted a new toy, I had to make it work with all my other responsibilities and goals.”
By regularly interacting with his budget, Sam felt more aware, and therefore excited (win!), about his positive results.
“The [YNAB] method and the tool created immediate positive results, which made it easy to keep up with the habit … I’ve paid off my loans, thanks to my increased saving rate, and the other goals seem eventual, rather than aspirational.”
Back to That Trip
When Jenny moved from Chicago to Los Angeles to live with Sam, they knew that traveling—now, not when they’re older—was a must. That’s when he introduced her to YNAB.
“ … it was just as transformative for her as it was for me. YNAB allows us to speak the same language when we talk about money. Finding a cheaper supermarket lowered the grocery line item for both of us and moved us closer to seeing the world.”
Together, they researched costs for their trip by reading travel blogs that broke down expenses for backpackers by country. Using those as rough estimates, they’ve extrapolated a travel budget, adding categories of their own for flights, ongoing expenses in the U.S. (insurance, storage, Spotify, etc.) and one-off costs (moving, vaccinations, gear). If you’re interested in similar pursuits, Sam suggests checking out My Funky Travel.
By imagining their trip, Sam said it was a no-brainer to follow the budget, “ … it was easy to limit spending, when one beer [at home equals] 7 beers in some southeast Asian countries.”
YNAB Frame of Mind
Sam started using YNAB in February 2015. When he first wrote to us, he boldly declared that, second only to starting a relationship with one of his closest friends (Jenny!), “Starting to use YNAB has been the most positive change in my life in the last half decade.
“Since that time, I’ve doubled the amount of money in my retirement accounts. I’ve saved twenty thousand dollars for our round-the-world-trip and even more as a cushion. I also paid off the remains of my student loans. More importantly, I have a tool to continue saving in the years ahead.”
Is a Budget for You?
Whether you’ve got globe-trotting aspirations, or slightly more domestic financial goals, a budget could bring a new sense of peace and stability to your life. Sam says, “[YNAB] allows you to plan towards long-term goals and deal with sudden expenses as they inevitably arise. A parking ticket still causes stress, but it’s not debilitating.”
If you’d like to share your budgeting goal, email me at [email protected]