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Why is Budgeting Important?

Wondering why budgeting is important? Budgeting seems kind of stuffy.

Risk-taker. Adventurous. Spontaneous. These are not words we typically associate with budgeting, right?  No, budgeters are responsible. Budgeters are planners. Budgeters are homebodies—maybe even a little … boring, right?

Budgeting won’t make you boring. In fact, taking control of your money will let you have more fun and take more risks. And I’m not talking about “take on a lot of debt” kind of risk. And I definitely don’t mean “work so much you risk your health” kind of risk. I’m talking about the kind of risk that frees you to try new and exciting things.

Why is Budgeting Important: Think Freedom

Let me give you an example—my example. Having a budget let me make a risky career move that led to a job I absolutely love—working as the community manager at YNAB, which partly involves writing blogs like the one you’re reading right now!

A Career Crisis

Let me take you back to the distant past, to a different world, to a year that was weird for most of us and even more weird for me—2016. I was working in a library cataloging books and helping people with research. For some, that would be a dream job. But, for me, well, it was … fine. I certainly liked the people I worked with, but it wasn’t my life’s ambition. And, unless I went to grad school (again!) and racked up a lot of debt that I knew I couldn’t afford on a librarian’s salary, there wasn’t much further I could go in my career. I was in the midst of a full-blown career crisis, and I had been for a long time.

A Search and Opportunity

What I did love was helping people on Reddit with personal finance questions, especially the YNAB subreddit, where I spent far too much of my time discussing spending habits and financial goals. So in January when my wife asked me what I’d want to do for a living if I could do anything, I answered, “Well, what I’d really like to do is teach for YNAB.”

But, of course, I knew that would never happen (ha!), so that set me off on a journey to explore career options in the finance industry. I talked to a lot of financial planning coaches who told me the work was rewarding but didn’t really pay the bills. I talked to a lot of financial advisers that said you could be really successful … if you were a fantastic salesman (not me!). So I was feeling a little defeated in September when, all of a sudden, the heavens opened and YNAB needed a new teacher. I applied and, somehow, I got a job offer. (Best day of my life? Definitely in the top 10.)

A Risky Move

But here comes the risky part. My job at the library was full time. And had benefits. This new job at YNAB was part-time, which meant no benefits. I also didn’t mention that we had just had our second kid earlier that year with plans to have more! YNAB paid a lot more per hour than my library job, but I would be stepping into the unknown when it came to my financial situation.

And here’s the deal. If I didn’t have a budget, I am pretty sure I would have said no to YNAB. I may not have even applied. I would have said no to a job that brought me fulfillment and joy and that led to a full-time (and benefitted) job at the best dang company in the world. I would have said no to a once-in-a-lifetime opportunity all because I’d be too scared to take a risk with money.

Here’s Why I Wasn’t Scared

I’ve been thinking a lot about why I felt totally peaceful about taking this leap of faith. I knew budgeting opened the door, but what about my financial life made me feel okay taking this risk? Really, it’s two things:

First, the Obvious

It makes it a lot easier to take a financial risk if you have some money in the bank. And because I was a budgeter (and because I’m very fortunate), I did save money. My wife and I decided to create a budget with YNAB back in 2013, and even though we’d had two babies, weathered some financial storms and unexpected expenses, and bought a house in that time, we still saved an emergency fund and started living on last month’s income, too. So even if I jumped into this new adventure and totally failed, I knew we had a safety net we could rely on.

Scarcity Brings Clarity

If you’re a big enough YNAB nerd to dig deep into the YNAB lore, you’ll know that Jesse started selling YNAB (then an Excel spreadsheet) to fill a $350 shortfall in his family’s budget, a gap that could easily have been filled by a reasonable student loan. But since committing to debt payments was a non-negotiable for him, he turned to a side gig that ended up becoming something much, much more. Forcing himself to face the scarcity of his money led to Jesse finding a more creative solution, and thank goodness he did.

My story is similar. All that time while I worked at the library, I had a side job teaching for an online high school. I took that job to help us save a 20 percent down payment on our house, a goal that felt as insurmountable as it felt important to me and my wife. Well, even after we achieved that goal, I kept the side job because I liked it, and it’s nice to have some extra money.

When I quit my full-time job to work part-time with YNAB, that side job became a much more important source of income. If I didn’t have it, I might not have made the leap. Rather than taking on extra work, I could have borrowed that extra 20 percent on the house. It wouldn’t have been a big deal. But having a budget made me believe I could achieve that big goal, thus the side gig I would not have taken otherwise. I didn’t know it at the time, but embracing scarcity led to new long term opportunities down the line.

Money Confidence

Three years of budgeting had given me confidence ... And it was confidence that let me take a leap into a new and exciting career ...

Having money saved and a side job helped, but there was something else that made me feel good about taking a risky career move. Three years of budgeting had given me confidence. I had real and lasting peace about money, and I knew I had a solid spending plan and the skills to handle some financial hard times.

Even if we didn’t have some money set aside to handle a somewhat risky career move, I would still be confident in the knowledge that I could make it work by leaning on my budgeting skills. And it was that confidence that let me make a leap into a new and exciting career with YNAB.

So what about you? What doors has budgeting opened in your life? Maybe you jumped into a new career like me, or maybe you got to do something fun! Share your stories with us on Instagram, Facebook, and Twitter. We’d love to hear them!

Ready to start a new adventure that involves budgeting? Try YNAB for free for 34 days.

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