the ugly B word

Today I am going to talk about a dirty topic. The kind of topic that in the past has had me running in the opposite direction with my eyes covers and saying “la la la la” as loud as I can. The horrible topic of . . . budgeting. ARRRRGGGGGGG! But stay tuned to the end as I will have a lovely give away at the end of this post to help you with your budgeting. Contest is now finished. Winner will be announced soon.

And the winner is

Carson W

congratulations!

This past year has been quite tight for our household financially, with both Garry and I choosing to go to university in an attempt to get ourselves out of the minimum wage trap we are currently in. This has meant that we are now surviving on government payments with a small amount of money coming in from casual work.

So far it has been working. We have been able to put food on the table and pay bills which is the main goal, and we have been able to still fuel our coffee addictions which is a relief. But then October came along. And oh boy did it hit us like a ton of bricks. We had so many bills due, which we had not even thought about so had no money set aside for them.

Seeing the situation we were in I decided that I would have to do something about it. I looked for apps on my phone that would help us with budgeting. I had done this before, but had never actually found one I liked. This time I clicked on You Need A Budget. I had looked at it before, but had been turned away by the fact that it said you had to buy the software for the computer to make it work, which cost $60. This seemed like a rather large investment for me, particularly when I didn’t even know if I would like the software. But this time I decided to look into it and discovered that they offer a 34 day free trial. So I downloaded it on the computer, phone and iPad and set it up. Then I fell in love pretty much instantly.

You Need A Budget (or YNAB) is different to other budgeting systems that I have seen. They have 4 rules they want you to follow, and when you think about them they make so much sense. I’m kind of kicking myself for not finding this idea earlier, as we could have been so much further ahead, but as they say, hindsight is a bitch.

The first rule is that rather than estimating your income then forecasting your spending in that month (which doesn’t work for us anyway as I get paid weekly), you enter your income as you receive it, then decide what that money needs to do. You have categories that you put your money into. Its kind of like having invisible envelopes in your bank account that divides your money up. So when you get asked to go out for dinner by a friend you check the balance of your eating out category, rather than your bank balance, to see if you can afford it.

The second rule encourages you to set aside money each month for those horrible expenses that come up and bit us in the butt (like what just happened to us). You work out how much you would need to pay on car insurance, or Christmas gifts, or your annual family holiday, then you set aside money into a category for that expense. Then each month the category will grow, until when the bill or occasion arrives, you have plenty of money to pay for it, and there is no rushing around trying to make up the money. We definitely could have used this idea in our house, if I had a dollar for the number of times we have had major stress due to a big bill arriving I wouldn’t need to budget lol.

Rule three is called role with the punches. Basically it is telling you to be flexible. Go back to that dinner that a friend asked you to go to. You check the eating out category but there is only $10 in there, not enough for a nice dinner at all. But you really want to go, and you can go, if you sacrifice another category. You look at the other categories and you still have $50 in the clothing category, do you really need to buy any more clothes this month? Nah. So you move the money from one category to the other and tada, you now have $60 to spend on dinner, YAY! I think this is my favourite part of this plan. It allows you to still do spontaneous things, you’re not tied into doing exactly what your budget says, you control it, not the other way around, which is what our old budgets would always do.

The fourth rule, the one I think is the hardest, but will be most rewarding when we are finally in a position to do it, is to live on last months income. The YNAB team acknowledge that for most people, this is not an achievable goal in their first month, but they encourage you to put away as much as possible to build a buffer that will be enough to cover a whole month of spending. I really like this idea, and while it is not going to happen to us any time soon, I really want to try for it. I am even thinking of aiming for a two week buffer first so we can feel some achievement.

Another great thing about YNAB is they offer free support in the form of video tutorial, a very active forum, and free online webinars. These have been so vital for me in learning how to get the most out of this software, and I am sure I will keep referring to them for a while until we iron out all the wrinkles in our budget.

My biggest concern with using YNAB was saving up the $60 to buy the software. But luck was on my side. When you attend the free online webinars you get a chance to win a free copy of the software. I won not one, but two copies. I also found out after winning that they offer free access to YNAB for college students around the world for the entirety of their studies, so if you are a student go snap up your free copy now. Seeing as I only need one copy of the software I have decided give away my extra copy to a lucky reader. If you would like to go into the draw comment on this post with your name, email contact and the one thing that you have always wanted to save up for, but never seem to get around to. Entries close in two weeks time (26th of October @ 12 midnight Australian EDT).

And if you just want to get your copy now, you can save $6 on your purchase if you use this link

Happy budgeting.

This post is not sponsored by YNAB, the prize was given to me as a freebie and I am choosing to pass it along to someone else.

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20 thoughts on “the ugly B word

  1. I’d love to win a copy! We are trying to save more for retirement but it seems like the money always goes to something else.

  2. Thanks for this giveaway! We have wanted to save up for those little expenses that always seem to come when you least expect them. I guess so far we don’t seem to EXPECT them so we haven’t been putting enough aside for them 🙂

  3. Pingback: You Need a Budget Software Giveaway - Giveaway Promote

  4. Pingback: Enter to win a copy of You Need A Budget – ends 10/26/14 | Blog Giveaway Directory

  5. I, myself, am a student/mother/wife. I have always wanted to go on a cruise as well deserved vacation for my family. I have always been able to save a little and then “something would come up”. I have been on the trial version and it is going to expire in about 1 1/2 weeks. I want to buy YNAB, but you know, “something has come up” and it will have to wait a few more months. “Life Happens” but we will get through it!
    Thanks, Carla

  6. Thank you for this giveaway! I’m trying to save up enough money to move out of my parents’ house, but I keep having to withdraw from my savings to pay for my credit card bill.

  7. I’m currently trying to save enough to have a buffer in the account. We always seem to be living pay to pay and I really don’t want my family to continue like this.

  8. Thanks for this offer. A luxury item or designer wear. I found there are so many other places I can spend money with like taking my mum on a holiday. So I always go pass it:)

  9. We are trying to save up enough money for the soon-to-come-again surgery of our pet dog, who has bad problems with bladder stones every 1-2 years even though we are already using the special dog food to minimize the problem. Would love to win a copy of YNAB to optimize our spendings.

    • Forgot to add – she wants to go back to school to get her Bachelor’s in Nursing (she’s a nurse but needs a Bachelor’s to qualify for higher paying jobs). Her daughter and grandson are coming to live with her now and she is the breadwinner in the family.

  10. Hi! Thank you for this giveaway.
    I’m trying to save up to visit my dad in Korea. It’s been four years since I last saw him.

  11. I always trying to save up for retirement. My retirement savings always seems to be the first place I raid when I need more money. Thanks for the giveaway

  12. I would love to win. One thing I want to save up for is for a vacation. As a single mom I haven’t been able to afford to take my son on a nice vacation in 5-6yrs now.

  13. I am just getting started on my new journey – Learning how to Budget and not live Paycheck to Paycheck! I am trying to teach myself and , in turn, teach my children so that they never have to live that way either. I am saving (slowly for now) for retirement and for a nice healthy buffer fund! Loved your post!

  14. Thanks for the give away offer! I would love to save a deposit on a new house. We’re stuck in a small one bedroom place at the moment – we would love to have to children one day soon – but need to get out of here first. Hopefully YNAB will help!

  15. I tried the YNAB trial and loved it, so please count me in for the giveaway! I have family I haven’t seen in a loooong time because they live overseas, and I’ve been saving up to visit them– next year I hope!

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