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Tis the Season for Budgets

As a “money guy”, people assume that I am good with my finances. However, like many people, I sometime struggle with budgets. Or perhaps it’s better to say that I struggle with the conflict between the income that I have compared to the desires that I have to spend that income,

I’ve always had budgets. I set them up each year based on my previous years’ expenses. I adjust them for monthly variations….anticipated extra costs and revenues…. then I calmly tuck them into my virtual drawer on the computer. At the end of the month, I compare my actual spending to what was budgeted…or maybe every two or three months… If I overspend, I curse my overindulgence and vow to be better next month.  I’ve been doing this for years and I have finally come to admit to myself that this just doesn’t work for me any longer.

So, we (Tania and I) are trying something different. It’s a little program called You Need A Budget (YNAB).  There are a lot of reviews online for budgeting software and, in particular, comparisons between YNAB and Mint, Quicken, or others. The list some of the shortcomings of the various programs, the strengths, pros and cons, etc. However, in my experience, YNAB offers something that many of these other programs don’t.

YNAB forces me to be accountable before I spend the money. It forces me to actively think about the purchase I intend to make, and where it fits in with my budget. YNAB forces me to look forward and plan rather than, as most of my budget experience has proven, look back and regret.

YNAB has changed my spending patterns. It follows 4 simple rules:

1. Give Every Dollar a Job

2. Save for a Rainy Day

3. Roll with the Punches

4. Live on last Month’s Income

Check here –> for more details on the methodology.

Each payday, Tania takes our money amount and allocates it to a variety of purposes. She sets up amounts for groceries, play money, rent, utilities, savings, loan payments, vacations, etc. Every cent is allocated from our pay cheques. These allocations are then updated to our Smart Phones.

Then, whenever we purchase something, we look at how much money is left in the category, then really decide if it is a necessary expense. If it is, then we add the transaction. The total is then adjusted and updated to each of our Smart Phones. So now, we are working as a team with our spending, and we are accountable to each other every time we spend.  If something unexpected comes up, we have to shift money from different categories to pay for it. For us, it is a totally different way to look at spending. And, for us, it is absolutely working towards helping us achieve our financial goals.

This program may not be for everyone, but it is certainly worth giving a try. Here is the link

Happy Holidays!


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