August completes my sixth calendar month as a budgeter, so I thought it was time for a little reflection on victories won and lessons learned.
Rule Two has reduced major stress in the Butler household. I just made a $1,900 annual payment on our residential lot loan, and all the money was sitting in its category, ready to be spent. This was an especially sweet victory because I didn’t start saving for the bill until March, which meant having to set aside double “payments” during the last six months. Now that monthly category cuts in half and I can apply the surplus to my debt snowball. Same goes for my annual life insurance premium, due next month. Total freed up for the snowball is about $300 per month.
I’ve kept up with every transaction since March 17. After many attempts at consistent YNABing, it feels good to have solidified the budgeting habit. Tracking transactions and analyzing categories allowed me to set up a budget that takes care of our needs and live within our means. I find it hilarious that the current budget is about 40% of what I used to think was “necessary.”
In spite of a 50% reduction in income from 2012 to 2013, I feel less stressed and more optimistic about my finances than ever. Not to say I have no financial stress – my new financial awareness has made me hate my debt more than ever, which is stressful. But the stress of the debt motivates me to be rid of it.
Awareness is my key to financial happiness. Early in the month I got lazy with transaction entry (partly due to moving our cell phone service to Ting and not having the YNAB mobile app set up on the new devices).
After a few days I decided to see how I’d do if I mostly just ignored the budget and caught things up at the end of the month using YNAB’s import feature. It may work for you, but it’s no good for me. It’s only the 22nd of the month, but I’ve blown up the following categories:
In other words, most of my discretionary spending is out of whack, which I attribute to the lack of manual transaction entry and corresponding budget reviews.
Current overspending for the month is $242 across those categories, which means I’m tracking toward about $350 in total overspend, or just under 7% of budget. Disastrous? No. It’s a valuable lesson in the the value of awareness when your budget is tight – but I’d rather have applied a big chunk of that $350 to my debt snowball.
I didn’t sleep very well at night before becoming a budgeter. YNAB has done for me what it does for tens of thousands of others: let me think and worry less about money.
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?