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One Modest Income, Four Big Wins

How a single-income, variable-income family of five is finding financial peace with YNAB.

Last month, we shared Emma’s story, and the title says it all: Debt-Free at Twenty-Three! And it’s a great story. (Who wouldn’t want to be debt-free, globe-trotting and already saving for a comfortable retirement at such a young age?) But what if you’re not? And what if you’re more worried about finding dollars in the first place, nevermind giving them jobs?

If you’re struggling, today’s story is for you (and you, and you—because you’re not alone!). Many of us know how it feels to scrape by, worried about the basics, without any help. If that’s you, a budget might not be a fast-track ticket to decadence, but you know what?

No matter what your circumstances are, a budget can give you more control, more stability, and help you feel freer than you can imagine (at least right now). And that’s what today’s story is all about.

In the Green for 2017!

At the end of Debt-Free at Twenty-Three, I invited readers to email me their budgeting mantras—the words that inspire them to reach their financial goals—and Ann replied. She said, “Mine rhymes but is far more modest [than ‘Debt-Free at Twenty-Three’] … [my mantra is] ‘In the green for 2017.’ ”

It’s catchy, it rhymes. Winner, right? But, more than that, it’s deeply meaningful.

See, until recently, Ann and her husband leaned on credit to help them make ends meet each month. Their family of five lives in Denver and their only income is the modest living that Ann earns through her one-woman business, providing counseling and support services to moderate- and low-income families.

Ann said, “We have a line of credit attached to our checking account and, every month, have dipped into it [but] … Last month, I watched all the videos of the YNAB classes (especially You Can Budget with Variable Income and Budgeting When Broke). [Then] I changed how I use YNAB, and guess what?! We haven’t dipped into the line of credit this month and our money is nine days old.”

Humble Beginnings

That step, from using credit to cover the bills to actually aging your dollars? Well, that’s a huge step, especially when you’ve faced hardship.

Ann said, “I had a major medical crisis a few years ago, and we ended up in poverty. When I couldn’t work at all, we ran through our savings and maxed out our credit cards … Then, just as I was getting back on my feet, my husband was diagnosed with cancer, and I was sent by ambulance from my doctor’s office. We’re still paying off the medical bills from that summer!”

The family “limped along” during those harder days until Ann was able to work, again. And, as the money started to come in, she knew they needed a plan. Ann said, “ … it became super obvious that we needed a better budgeting method.”

Enter YNAB

The family had tried budgeting in the past, but nothing stuck. After unsuccessfully trying pen and paper, a spreadsheet, the envelope budgeting system, and an app that simulated the envelope system, Ann discovered YNAB.

She said, “I found YNAB when I was desperately hunting for a different budgeting option that was flexible enough to use with my variable income … YNAB was the first system that allowed us to make changes to our budget in real time as things happened, allocate money for things we knew were coming, and know for sure it was all correct.”

Better Habits, Brighter Days

Even though they still have a way to go, Ann has already scored some big wins. The four that stood out most clearly from her interview are completely attainable, even if you’re struggling …

1. Togetherness

Before YNAB, Ann operated in scarcity mode—instead of giving her dollars jobs, she became paralzyed, afraid to spend even a penny. She said that her husband, on the other hand, “ … might spend $15 on junk food at a gas station because he ‘needed’ something to eat.”

And neither extreme was actually helping them fix their money problems!

Now, with a budget in place, their “polar opposite” approaches to money are a non-issue—they just follow the plan! Ann said, “ … [now we] work together instead of fighting about money … [if] we have $30 left for groceries, he is able to prioritize what we need rather than what we “need”. [Because I’ve started to spend] money on myself, I’m less bitter when he spends money that I may not agree with.”

She points out that, with the actual numbers in hand, it’s much easier to agree on priorities, too. Ann said, “We can look at the … budget instead of [arguing] about whether or not we have the money for something. [Asking] ‘Where do you want to pull [money] from in order to do that?’ is a much better conversation!”

2. Financial Control and Peace

More than just helping them manage their bills on a variable income, YNAB has helped Ann’s family find their path to financial freedom. She said, “It’s hard to face the reality of your situation when your situation is bad. But the situation is still there, even if you try to ignore it.”

Now they give every dollar a job, and they’re dealing with their debts. Ann said, “ … I know where we stand financially … [so now] I can tackle it, a little at a time.”

Slow and steady is a far-cry from click-bait, but it’s where many of us can find success. And, if you let it, it feels pretty great to have a plan. Ann says, “I don’t feel that sick knot in the pit of my stomach anymore!”

3. Freedom

Following the Four Rules has helped Ann and her family identify their true priorities—and that includes an enjoyable life. Ann said, “Before, spending money always felt like jumping off the high dive … I’d just close my eyes, plug my nose, and jump.

“Now I make conscious decisions … We’re chipping away at debt but it’s also a priority to make sure our kids have opportunities that we didn’t have, so we’ve made sure to budget in things like ballet and music lessons. I’ve even done some things for myself like getting a hair cut I love—I would have never done that before!”

4. Steady Progress

A year ago, Ann’s family overspent each month by at least $1,000. This month, they’ve stayed on budget (“in the green!”). Ann said, “We’ve also paid down about $500 of our credit card debt in the last year (with thousands more to go, but it’s a start!), paid off most of our medical bills, and significantly improved our quality of life.”

She acknowledges that it’s not easy: “I sometimes get discouraged by all the [budgeting success] stories about paying off huge sums of money or going on fun trips … [but] my story really is proof that YNAB is for everyone! It helped us get on our feet after all my medical stuff, and now it’s helping us with our new goals.”

A Little Hope, a Lot of Happiness

There was a time when Ann worried about even the smallest splurge. She says, “I remember one time, crying in remorse over a magazine I bought on a whim at the grocery store when it wasn’t in the budget … I couldn’t spend the rest of my life not even being able to buy a magazine.”

With YNAB, money worries no longer eat away at her. In fact, to Ann’s surprise, she and her husband have shifted their focus away from their debt, even if just slightly.

She says, “Initially, I wanted to just pay off all our debt as fast as we could. But I realized that we could have everything paid off by the time the kids left home … [but we’d have to] deny them so many of the experiences we wanted for them. So we’re paying off debt over a longer period of time.’

What’s Your Budgeting Mantra?

For now, Ann’s focus is “to never see our checking account in the red again.”

And that’s why her mantra is … “In the green for 2017!”

How about you? What would you like to accomplish, financially? Set a goal and write yourself a mantra. If you do, I’d love to hear it! Email me at shannonmarie@youneedabudget.com.

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One Modest Income, Four Big Wins