You're not psychic? Don't worry - budgeting is still for you.


Reality TV tells me some of you are psychic. I’m extremely jealous; I bet your budgets are beautiful. Being able to look into the future and know exactly what you’re going to want and need – including emergencies – must be amazing. I bet you never overspend. How could you? You already know what’s going to happen, so you must find it easy to allocate exactly the right number of dollars to each of your budget categories.

The rest of us, unfortunately, are doomed to fail when it comes to guessing how many of our dollars to give to each category. Sure, our spending may come within $10, $20, or $50 of our estimate, but if successful budgeting means getting it exactly right – we don’t have a prayer.

What’s that? You don’t think effective budgeting requires perfect foreknowledge of your needs, wants, moods, and emergencies?

A YNAB survey respondent – commenting on a free live class he or she attended in early 2013* – disagrees with you:

Erin states that there has never been a month where she did not have to shift money around to [make her budget work]. This is not recommended by other budgeting gurus. Sure in the first 3-4 months, but not as a rule. The whole idea of a budget is to create funded categories that reflect spending and then learning to stay within the spending assigned to that category. Erin has been at this for a few years so she should have this down a lot better.

Listen, I don’t know which “budgeting gurus” you’re listening to, but they’re not doing you any favors.

Yes, the longer a person budgets, the more closely her categories will reflect her wants, needs, and habits. But life happens. Impulse purchases happen. Emergencies happen. Your budget needs to be able to roll with those punches. Trust me, Erin has this “down” about as well as anybody ever could.

You don’t need inflexible budget categories that label you a “failure” when you exceed the amount you guessed they’d need. You do need a budget that puts all your available dollars in front of you, allowing you to see the impact of overspending on your entire financial picture.

If you overspend in one area, an effective budget lets you grab unspent dollars from other areas to cover the shortfall. It’s just that simple.

If you’re not already budgeting the flexible, realistic YNAB way take a 34-day trial of our software.

*I discovered this comment as I was perusing old YNAB survey responses in an effort to learn more about the community. I can only hope this commenter is still YNABing today, and has discovered the power of Rule 3.