We started looking at YNAB back in December 2012 during the Steam sales. On a hunch I started checking it out when it went on sale. I was very impressed both with the product and the theory behind the process. I had often wondered if we could handle our money using a buffer system like YNAB but could never figure out how to get from A to B.
We were a typical pre-YNAB family of four living from paycheck to paycheck and highly dependent on our $1000 overdraft line of credit. Regularly we'd spiral out of control and over draft even with the LOC. Money was always a game of who's going to charge the biggest fines for being late and scheduling around those due dates. Once in a while we'd have "extra" money and no bills left. It was like hitting the jackpot until the next month when we'd be bouncing off the overdraft LOC again. I'd be left dumbfounded trying to figure out what happened when it looked like we were finally starting to get ahead.
I decided to give YNAB a try and asked my wife to humor me. Call it one of my crazy projects. If it doesn't work, no harm no foul. I spent a few weeks near the end of December messing around with it and decided to start for real on January 1. I could already see the potential at that point and ended up taking advantage of the sale before it was over. Saving money was part of the game after all.
By the end of January I had managed to recover some of our overdraft protection (it was maxed at that time) and our account never hit bottom once. We had no buffer at all and it was a weekly effort to keep on top of it. My wife wasn't very understanding of the process either at that time. She would spend money and tell me how much and on what so I could record it properly. She was our Quicken guru at the time so knew the general process of accounting for the money. When I'd mention the classes, videos, or ebook though she'd never look into them so didn't always understand why I was doing things the way I was. In spite of that she could see it was starting to show results though. So we continued with it and when I'd say we're running out of Grocery budget, she would try harder to stretch the dollars out for the rest of the month.
I get paid every two weeks. I knew if that if I kept things tight and tried to work with two paychecks a month, those 3 paycheck months would help me get closer to my buffer without a lot of sacrifice on my part. Living on two paychecks was very challenging with our current debts though and there were more expenses on the horizon. We kept our head down, balanced YNAB every other day, and learned to ask the question, "Is this in the budget?"
While I was diving in with both feet, my wife came around slower. After a few months she did finally started asking if something was in the budget before assuming we could do it. Occasionally she'd come out with "We need money for this." (not "DO we have the money?") and I wouldn't have it to allocate. I'd sit down with her and show her the numbers. It'd tell her, "It's easy. I budget every penny each month. Where would you suggest I take the dollars out of so we can put them into this new budget category." It made it very clear that something would have to give and that we could work with.
We don't have many luxuries we indulge in so I insist we keep the ones we have as they're not very expensive. If you don't treat yourself then it just feels laborious and becomes hard to motivate. Instead we found other sources for the money. We've been postponing a few purchases, for example, until her gym membership contract she doesn't use runs out so we could cancel it.
The last few months we've been getting closer to that buffer and it's been exciting. All our big bills (car, mortgage, credit card debt) have been paid on the first of the month since July. August will get the rest of it's buffer on the 2nd. September 1st will be our first month that will start with a full buffer. My wife now treats the budget as the final word regardless of how much might be in the bank at any time. We have not over drafted once since we started in January. Most importantly, every month I look forward to budgeting the next month because it's fun.
There is still much more to do. We have some large debts I've been working on but we are making progress on those. I'm excited to think how much we'll have to work with once those are gone so I'm researching options to pay them off faster without increasing our monthly outflow. I'm looking into consolidating loans at better terms for most of them. Other debts I'm focused on ensuring the majority of my payments go to principle by making sure my payments go in as early as possible (I can do that now) and using the snow ball method.
It's still very tight and there is little to no wiggle room. But we have some buffers for important things. The $250 refundable deposit for our rental car while my car was in the shop for repairs didn't even phase us. I knew I had it covered in a budget line item. They didn't process the refund immediately either (shrug), I'm not worried. It's on it's way now. That felt great!
As long as we stay on track, things could only get better. YNAB has changed our life and I can't wait to write a followup to this post a year from now.