Want to get ahead? Don't use long-term money for short-term consumption.

“Rule 3 makes it too easy for me to overspend. Anytime I want anything (a night out, a new pair of shoes, a new gadget), YNAB lets me rob my other categories – including Rainy Day funds and savings goals. I’m bugeting, but I’m not getting ahead!”

I’ve recently had a few emails expressing some version of this frustration, so I want to offer a couple tips to help you protect your “get ahead” money (Rainy Day categories, savings goals).

1. Look at your budget before you spend.

If you’re robbing your “European Vacation” category to cover your “Entertainment” overspending, it’s probably because you didn’t check you “Entertainment” category balance before agreeing to a night out with friends.

You’re less likely to steal from your bigger goals if you keep your budget in front of you. You’ll spend less time in reactionary “How am I going to cover this?” mode, and more time in “I can’t wait to buy my new Macbook” mode.

Get YNAB on your smart phone and check your category balances before you spend.

2. Only use discretionary dollars to pay back discretionary overspending.

If you overspend in ‘Restaurants,’ pay it back with some combination of ‘Entertainment,’ ‘Clothing,’ ‘Drinks,’ ‘Fun Money,’ or even ‘Groceries.’

Your “get ahead” dollars probably reside in YNAB master categories like “Rainy Day Funds” and “Savings Goals.” Imagine a one-way valve on those master categories: money flows in, but can’t flow back out (except to do the job it was originally assigned).

The other day I was talking to Bryan (a coaching client) and we decided YNAB needs to give some sort of bright flashing warning whenever you’re moving money from a long-term category to short-term category:


Bottom line, when it’s time to cover overspending, repeat this mantra to yourself:

“I get ahead because I don’t use long-term money for short-term consumption.”