New Year’s Day. A day when we awake to fresh possibilities. And quite possibly, the realization that, yes, we really need a budget.
It’s a great moment because it means you’re right there on the edge of taking control of your money and all the ways it impacts your life. (So. Many. Ways.)
The thing is, it doesn’t always feel great immediately. It can be, well, intimidating. Scary. I know I’ve spoken to a lot of new YNAB users who worry, “Can I really do this?”
We hear stories every single day about marriages saved, and debt paid off, and kids sent to college. You can do this. And here’s why — it isn’t that hard.
YNAB isn’t just fantastically beautiful software. (Was that not modest enough? Maybe it’s the New Year giddiness.) We’ve figured out this budgeting thing, and boiled it right down to four simple rules, what we call the “YNAB Method.”
Just four rules: Give Every Dollar a Job, Embrace Your True Expenses, Roll with the Punches, and Age Your Money. Those rules are super-powerful, (and I want you to use them and benefit from them) but they actually aren’t what is on my mind this New Year’s Day.
Nope. Today, I want to focus on one thing: Just Start.
Just Start. (And Then, Keep it Simple!)
Believe it or not, some people aren’t successful with budgeting because they never actually start. They know they need to, they have that “I need a budget” moment. Maybe they even download the software and open it up. But then…
Maybe you’ve been there? Scared you don’t know how to budget. Or worried it isn’t the right time – you aren’t organized enough. Or anxious about having to give up too much. Or feeling like you need more money in the bank before you get started. Or stalled by the pressure to get it perfect. Or, or, or,….
Wrong. Wrong, wrong, and wrong.
You can–and should–start now. As in today.
Here’s the key: A budget is simply a representation of your priorities, applied to your money. Not the money you had last year, not the money you may or may not have next month. The money you have right now.
Look in your checking account right now. How much is there? And what does it need to do between now and the next time more money is going to land in that account?
In our software, your categories are your priorities. Assign your dollars (or your euros, or whatever it is that you have) to those categories. Keep going until you have none left to assign. Don’t go any farther! That’s your plan for right now.
You don’t need to know if you’ve assigned exactly the right number. You can change it later. (Yes, you really can change it later. We believe budgets can and should change.) But with this simple act — by starting — you have just taken control. Those dollars aren’t going to just go and do their own thing now. They’re going to wait for the job you gave them.
Keep it Simple.
You may have noticed I only referenced your checking account. You don’t need to think about your savings account right now. You don’t need to think about your credit card yet. You will, and YNAB will help you make sense of them. But for now, starting is the most important thing. Keep it simple.
You’ve probably put that money in savings because you weren’t going to use it right away, anyway. Your credit card? That’s money you’re able to borrow, not money you actually have. So leave it out for the moment, and just focus on the money you’ve got right now.
Need groceries for the weekend? Take a guess at how much it will cost and budget those dollars. Going out on the town tonight? (Seriously? New Year’s Eve wasn’t enough?) Take a guess at what you’ll spend and budget those dollars.
When you go and actually spend those dollars? Record it in YNAB. Every dollar. Get our mobile app and record it on your phone. Really simple.
See how this feels with one account. Budget your money. Record your spending. Make an adjustment if you need to. Repeat.
You’ll have questions. That’s okay, you haven’t done this before. You can take a class, or reach out to our customer support team, but know that you don’t have to learn it all before you start, or on your first day, or even your first week.
You’ve already done the most important things. You’ve started, and you’re keeping it simple. You’re taking control. It is going to be a good year!