How Much Time Do You Have?
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He gets paid twice monthly, on the 1st and 15th, and he’s not fully buffered yet (meaning he isn’t able to live on last month’s income).
Rather than budgeting twice per month (one budgeting session for each paycheck), he estimates his expenses for the entire month when he gets his paycheck on the 1st.
By the way, Jesse tells me that 80% of YNAB users get paid other than monthly, so my friend’s situation – and the way he handles it – are normal. Less than ideal, but normal.
Another way of saying “he estimates his expenses for the entire month” is “he budgets money he doesn’t have.”
Which turns his whole budget into Monopoly money. If any of your budget is fake, all of it is fake.
When you break Rule 1, the other three rules break down, and YNAB becomes a simple expense tracker instead of a finely-tuned money happiness machine.
How so? Because Rules 2, 3, and 4 are extensions of Rule 1:
“Estimating” detaches your budget (and spending) from your real account balances (in checking, savings, etc), creating undesirable outcomes:
First of all, don’t feel bad. Feeling guilty about your money is a waste of energy (No shame, no blame – right?).
Second, consider a fresh start with your budget. I don’t know how many times I’ve fresh-started YNAB – could be a dozen or more.
After fresh-starting (which, you might not realize, is an actual feature in the software under the “File” menu), resolve never to budget money you don’t have.
When money enters your life, assign it to those jobs that need to be done before you get paid again. In the unfortunate event you have to use a credit card to get by (we’ve all been there), you’ll be doing so with full awareness.
For those of you paid weekly or twice monthly, use your category names (or the notes feature in YNAB) to estimate your bills and remind yourself of their due dates. (I just made this change myself.)
Bottom line: “Available to Budget” is a sacred number. As long as you treat it accordingly, you’ll be using YNAB to its full potential.
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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