Before I started using YNAB, I went to some extreme lengths to make sure my savings dollars were safe. For instance, I used to hide these dollars in labeled envelopes all over our apartment. I did this for two reasons:
- It allowed me to feel some reassurance and security because each dollar had a specific purpose and couldn’t be spent accidentally on something else.
- In my mind, it seemed logical that if someone broke into our apartment and happened to find one or two envelopes, they most likely wouldn’t be able to find all of them, so at least some of our cash would be safe. *insert eye roll*
When I finally discovered YNAB, you can imagine my relief at putting all those dollars back in the bank and knowing their jobs were secure in my budget. If I overspent somewhere else, I’d have to be held accountable for it. But, I was in control. It was a game changer.
Setting goals and working towards them is probably my favorite thing to do in my budget. I love watching the balances grow over time and knowing that when I finally make that payment it feels like free money because it’s just sitting there waiting to do that very thing (disclosure: it’s not free money, I worked really hard for it, but it feels like it so I’ll take it).
Whether you’re trying to save up for a big purchase or pay down debt, here are a few tricks to help you funnel even more dollars toward your dreams.
Get rid of surpluses right away.
For a long time, if I had extra money in a budget category I’d move it to another category where I thought I might need it. For instance, if I budgeted $100 for utilities but my bill only came to $80, I’d move the extra $20 to my groceries category (because I almost always overspend on groceries). I thought I was doing myself a favor by padding those categories, but I was actually decreasing the feeling of scarcity, meaning I’d still overspend even though I’d given myself extra. Now, as soon as I know I’m going to have a surplus, I immediately move the extra dollars to my student loans category. Then, I make the payment right away, no matter how big or small. Those dollars are gone, scarcity is still alive and well, and I’m one step closer to being debt free. Get those dollars to your highest priority ASAP.
Divide goals into increments.
Big goals are awesome, but they can sometimes feel unreachable. Maybe you’ve seen how many months it’s going to take to save up for that 20% downpayment, or you’ve realized it’s going to take years to finally pay off that card. Instead of throwing in the towel, break up your goal into attainable chunks. When I started paying off my student loans, I started with the smallest. For the first few months I felt amazing because I was able to quickly blow through multiple smaller loans. Pretty soon, however, I was left with the last few big ones. I remember thinking, “I am never going to get there.” Instead of adding the full amount of the loans in all their horrifying glory, I added them to our budget in increments (as Tracking Accounts). When we pay off one increment, we celebrate, then add the next. It keeps our inertia moving and our minds motivated.
Avoid passivity — be intentional.
There are tons of apps out there that will move money from your checking account to your savings account, cent by cent. We’re talking three cents here, six cents there, big stuff. The idea is that you can set it and forget it — all those little cents will eventually add up to something major without you having to lift a finger or have any part in the process. While it may seem like a good deal, you’re removing yourself from the decision-making process. Money is moving without your awareness. Not only is this a struggle to keep track of on a daily basis, it removes you from a position of total control. The key to maintaining a successful budget is to Give Every Dollar a Job. You’re in command and you set the why for each and every cent in your budget. As you decide where those dollars go, you’ll feel more empowered to reach your goals on your terms.
Have a plan for overspending.
No month is perfect, so chances are good you’ll need to move money at some point. Decide which categories are off-limits in this scenario. If saving for a new AC unit is your highest priority (because you live in Texas and summer is coming very quickly), don’t let that category come under consideration when it comes time to move money. Know which categories are up for grabs (maybe it’s clothing, discretionary, or dining out) and which are not. If you budget with a partner, make sure you’re on the same page and then stick to it together.