There are many things to love about helping people learn YNAB in a live workshop (which we do 100+ times a week). We get to chat with people of all backgrounds and financial circumstances. We get to help people build better financial futures for themselves and their families. And every time we see the words ‘Aha! Lightbulb moment!’ in the chat window, we know a life is about to be changed. We also love being asked and being able to answer questions about how we handle particular aspects of budgeting in our own lives, and if you’ve been to a workshop you’ll know we’re happy to share.
My fellow YNAB teachers and I all have our own YNAB journeys and we love answering questions about how we handle particular aspects of budgeting in our own lives.
I was recently asked how I handle savings, and after digging a little deeper, (in our workshops, attendees can ask questions and chat live with the teachers) the question became a little more specific:
“Dave, do you have lots of distinct, named savings categories like ‘New TV’, ‘New Kitchen Window’ that you hide once you’ve spent the money? Or do you have one category called ‘For the Home’, so you can report on that spending and see averages on spending ‘For the Home’ all in one place?”
The answer to both is yes.
Welcome To The Wish Farm!
After spending six years using YNAB to aggressively pay down debt, my wife and I both love the idea of saving very purposefully. We save for very specific, individual, named things. It provides clarity and a shared vision of what our limited funds are actually going to do for us. In fact, we have a category group called ‘Wish List’ where we list all the things currently competing for our money:
The (S), (M), and (L) are for Small, Medium, and ‘Look How Much That Costs!!’ (or Large, if you prefer).
You many wonder why ‘Next Computer’ and ‘Next Car’ aren’t on the list? Well, they’re safely tucked away among our True Expenses categories. They are not optional items for us, they are inevitable, so we save for them differently. We budget for those things before we get to even think about the Wish List.
The Home Of Unfunded Dreams…
Speaking of budgeting (as I often do), you’ll notice there’s no money budgeted to these items, and no YNAB goals are set. Correct! This is the Wish List. This is the home of unfunded ideas. There’s no way I can budget for all of them simultaneously, so what to do?
If you guessed prioritize—you are correct! Prioritize, prioritize, prioritize.
Until They Get What They Need To Grow…
The Wish Farm is where dreams do come true. It’s a small place, it only has room for three wishes at a time. Like seeds, wishes are planted and watered until they’re ready for harvest:
Step One: We Plant
Only one wish of each size can fit into The Wish Farm at any given time. To be considered, a wish must have been researched enough to attach a dollar amount, by way of a YNAB goal. (In this household, final decisions on what wish should be focused on next have been decided by games of Backgammon).
Step Two: We Water
Water the wishes when you can, by budgeting money that you have. They won’t survive if you rely on the rain that you think is coming next week.
Step Three: We Harvest
Spend the money, you’ve (literally) earned it!
And the cool thing is, unlike with seeds, you get to change your mind about what you will harvest right up until the very second you pull it out of the ground (aka spend the money). Are we sure this is still our number one small priority?
(Can you imagine? Oh great, *more* zucchini, I’ll just turn those last few plants into cabbages before I harvest them.)
Not only that, but plans change. This very day my YNAB Christmas present arrived via Canada Post’s highly efficient, effective, and not-in-any-way-super-frustratingly-slow dog-sled parcel delivery service. To my delight, within the carefully-wrapped box was a cast iron outdoor campfire pot! And there was me already $54.23 (see above!) of the way toward getting one!
One (lost) game of backgammon later:
Step Four: Wish Granted
One final thought on harvesting to finish off the question. When the time comes, I won’t be recording the spending on New Blackout Blinds to the ‘New Blackouts Blinds’ category and then hiding it.
Ultimately, that spending is on ‘Home Improvement’. That’s where I want to capture it for averages and reports. No problem. On the day we spend the money, we move the money to the ‘Home Improvement’ category in True Expenses and record the spending there.
And We Keep On Wishing…
Budgeting is so much fun! When a wish is granted, we delete that category, discuss reshuffled priorities, and play another game of Backgammon.
Here’s to hoping I get the chance to chat with some of you in the hundreds of workshops we have planned for the new year. Just mention solar-powered water heaters for chickens, and I’ll be sure to say hello.
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?