Money isn’t everything. Except that if it feels like money is getting in the way of everything, then it does start to feel like everything is about the money.
Our whole goal at YNAB is to reduce your financial stress. We don’t want you to be thinking about money all the time, in fact, the less you have to think about it the better. We have four simple rules to help you achieve this not-having-to-think-about-money nirvana, and today we’re going to dig into Rule Three: Roll With The Punches.
It’s kind of ridiculous that we even had to make this a rule, because it is fairly obvious, if you want to change your budget, you should change it. But over the years we’ve found that people don’t feel comfortable changing their budgets—there was so much unnecessary guilt—and so we made it an official rule.
If a boxer takes a swing at you, and you move your face in the same direction as the boxer’s punch, it will help lessen the blow. This is the same concept and why we called it “Roll with the Punches.” (Also, because when a big expense surprises you, it can feel like a punch in the gut. We want to avoid that feeling.)
If you set your budget to be $100 yesterday, and today you realize that $100 was insufficient, that doesn’t mean that budgets don’t work. It means that you were unable to predict the future. Go figure. So when you get new information, you make new decisions. This is not a reflection on your budgeting skills, it is just good business.
In all other areas of our lives, we apply this principle without a second thought.
If you plan a beach vacation and it rains, would you say, “Well, kids bundle up because we planned to go to the beach and so, to the beach we will go!” No, of course, you wouldn’t. You’d adjust your plans.
If I’m driving home from work, and my objective is to get home and have dinner with my kids, and I hit a construction zone and have to take a detour. Does it mean that I can’t go home or that I don’t want to go home? Does it mean that commuting doesn’t work or that transportation by car is ineffective? No. It just means, there was some unexpected construction and I had to take a detour. And with that new information, I will make a different plan for tomorrow. It’s just a detour.
It is the same with your budget. Just a detour! You get new information and you adjust your budget. No guilt. No judgement. Just a detour.
If you overspend in one category, you can move money and cover the overspending. Do what you can to make everything green again. Shuffle money around as needed and make it green.
If you are habitually overspending somewhere, then you might need to adjust your budgeting, you might need to be putting more money toward that category. Accept your reality. Or if you don’t like your reality, change it, by taking the steps necessary to adjust your spending. Don’t just say, “Oh, I’ll try to spend less.” Crank up your awareness and think through the ways you’re going to actually spend less. Write it down. Be real about it. I love how this works. You can change your reality.
Or don’t. But you have to choose. Change your reality or embrace your reality, but don’t just bury your head about it.
So, that’s it. Change your budget as you need to—that’s our third rule. It will actually keep you going. Instead of feeling like a failure, you actually feel like a chess grand master, adapting your play to match your opponent’s. Or some brilliant military strategist that’s adapting your tactical plan under enemy fire. Or an undefeated boxer who is fast, nimble and light on your feet. Choose your analogy!
When you have flexibility, you will stick with budgeting. And when you budget consistently you will get ahead. This is how it works and Rule Three is a big part of it.
Adapted from Podcast #211: Rule Three Reloaded, the one in which Jesse talks about bobbing and weaving and rolling with the punches.
Your Next Step
Budgeting is not restrictive. You won’t be spending less, you’ll be spending right. So what do you have to lose? Except all that debt and stress?