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Four Rules for Less Money Stress

The magic is in the method. Follow these four simple rules and change your relationship with money.

Change Your Money Mindset

The YNAB app doesn’t work because it’s pretty (it is, though) or because it has amazing tech (it does, though). It works because it’s built around Four Rules designed to change your financial future.

Rule One: Give Every Dollar a Job

Spend your money with confidence. You’re the boss. The drill sergeant. The maestro. When you earn money, you prioritize how you’ll use it, and then simply follow your plan.

How It Works

As soon as you get money, you’ll decide what it needs to do—based on whatever is most important to you. Then, instead of deciding to buy something based on your mood, or the big (or small?) pile of money in your checking account, you’ll follow the plan you made.

Rule One In Your Budget

  1. Get some dollars.
  2. Prioritize those dollars (give ’em jobs!).
  3. Follow your plan.
Watch YNAB Rule One

Why It Works

You’ve already mapped out a plan, so instead of stressing over every little (guilt-inducing) spending decision, you’re just following your own instructions. No raise, windfall, or inheritance required. (Though all of those would still be nice.)

Picture this…

  • Life Without Rule One

    Your $500 account balance leads you to believe you’re flush with cash, so you spring for sushi. (And you go big.) But a few days later some bills come due and you don’t have the money. (Because you ate it.) You’re officially stressed.

  • Life With Rule One

    You have $500 in your account and assign every dollar a job by dividing the $500 into various categories. When a friend invites you to sushi, you consult your Eating Out category (with a $10 balance) and suggest your friend come over to your place to split a pizza instead. A few days later, some bills come due–and you just pay them.

More About Rule One

  • How Do I Handle My Savings Account In My Budget?

    When you’re setting up a budget and trying to get specific on your long-term financial goals, you might wonder how to treat your savings account in your budget. Well lucky for you, it’s actually pretty simple to start saving. Here at YNAB, we think about things a little differently—especially how something like your bank account …

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  • 3 Common Money Mistakes

    I think for a lot of us, it can be hard to admit when we’re making obvious money mistakes. There’s a tendency to kind of fib (just a little) to our budgets, especially when things are not going our way. At YNAB, we’re all about reflecting reality in your budget, but sometimes seeing reality in …

    Read Blog Located in: Learn to Budget / Blog

Rule Two: Embrace Your True Expenses

Make your money boring. Did the car break down? No big deal. Are the holidays coming? You’ve got a Santa-sized pile of money stashed away. No credit card necessary. Imagine never (ever) dreading the arrival of a big bill.

How It Works

Take those large, less-frequent expenses (that usually send you into a financial tailspin) and break them into manageable, monthly “bills.” Step off of the Financial Crisis Roller Coaster and enjoy the view from the top of the Carousel of Prosperity Progress!

Rule Two In Your Budget

  1. Find a big, infrequent expense.
  2. Create a target to fund it monthly.
  3. When that expense arrives, just pay it!
Watch YNAB Rule Two

Why It Works

You’re being more realistic about your finances by planning for larger, less frequent expenses while keeping your dreams and goals in sight. By anticipating big expenses and breaking them down into more manageable monthly amounts, you’re making fully informed spending decisions based on immediate needs and future obligations.

Picture this…

  • Life Without Rule Two

    You just bought concert tickets and you can’t wait to go. The very next day, you’re surprised by a $600 bill for your insurance premium. Now you have two choices: sell your concert tickets or rack up more credit card debt to cover the bill…and neither option feels good.

  • Life With Rule Two

    You looked ahead six months ago. You’ve been budgeting $100 every month for the insurance premium. Now it’s due, and you have $600 ready to go. It’s not magic, though it feels that way. So, that chaotic month that would have sent you into complete and utter panic mode was no big deal. Kind of boring, actually.

More About Rule Two

  • Debt Is Not the Only Option.

    ~~~ As the season of spontaneous summer spending comes to a crashing halt, we thought it might be a good refresher (for all of us!) to get back to basics. A little “Budgeting 101” to help us reset and refocus on the “why” and “how” of budgeting, prioritizing, saving, spending—all of it! There may even …

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  • How Can I Set Money Aside for Christmas?

    If your post-holiday credit limit is stretched as tightly as Santa’s waistband on December 26th, then today’s post will probably be about as popular as finding a lump of coal in your stocking. But read up! By this time, next year, you could be a happy, Christmas-debt-free budgeter! January, the First Month of Christmas So, …

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  • How My Family Survived Two Layoffs in One Year

    Getting laid off. Let go. Made redundant. Circumstances that no gainfully employed person wants to face—yet, within just a year’s time, my husband and I experienced the sting of job loss twice. The first time around, my husband worked for a small Canadian company that had recently opened an office in the U.S. Within a …

    Read Blog Located in: Learn to Budget / Blog

Rule Three: Roll With the Punches

In boxing, you move your body in the same direction as your opponent’s punch to lessen the blow. Same rules apply to budgeting. Be flexible and address overspending as it happens.

How It Works

When you overspend in a budget category, just adjust. No guilt necessary. If you plan to take the kids to the beach but it’s pouring down rain, do you still go? Of course not! Circumstances change and plans change with them. Your budget is no different. If you overspend in one category, free up money from another category and move along. Remember, you’re the boss!

Rule Three In Your Budget

  1. Choose a category with overspending.
  2. Move funds from another category to cover it.
  3. Move on with your life—no guilt!
Watch YNAB Rule Three

Why It Works

You don’t need to be perfect! You just need to commit to the process of planning what you’ll spend (Rules One and Two), and then, follow your plan. Oh, that’s right, and then adjust the plan as needed. Rinse and repeat.

Picture this…

  • Life Without Rule Three

    When you overspend, you feel like a failure. Budgets don’t work. This whole idea of trying to “guess” what you will spend, is a complete waste of time. You don’t “need a budget,” you “need a raise.” If you only earned just a bit more money, everything would be fine! (Those last two sentences are dripping with sarcasm.)

  • Life With Rule Three

    You overspend (it happens) and your budget nudges you—in an überfriendly voice—“Whoops! You overspent on Groceries. No worries! Just move over some surplus money from your Travel category. Good to go!” You don’t feel like a failure or tempted to quit. Budgets do work. You’ve just never budgeted like this before.

More About Rule Three

  • How to Make Your Budget More Fun

    Wondering how your budget can be more fun? Do those words together seem like they go together like orange juice and toothpaste? Hold up, we’ll tell you how to inject some spontaneity and joy back into your budget if you find it lacking. Even with Rule Three, Roll With The Punches, sometimes a budget can …

    Read Blog Located in: Learn to Budget / Blog
  • The Rules Are The Magic

    Easily my favorite thing to do at YNAB is to talk to customers about their successes. They say things like… “I can finally answer my internal question of “can I afford this!”  Moving forward, I feel way more confident and secure in my financial life…” “I am now able to drop down to working a …

    Read Blog Located in: Learn to Budget / Blog

Rule Four: Age Your Money

When you are spending money you earned last month, you will have nothing to stress about money-wise. because you have a built-in buffer between earning and spending. The goal is to be spending money that is at least 30 days old. It might not happen overnight, but stick with it—it’s a game-changer!

How It Works

With the help of the other three rules, you’ll be more purposeful about your spending, consistently spend less than you earn, and be more than prepared for the future. Eventually, you’ll be able to cover May’s rent with dollars from April. Your money will be at least 30 days old and you’ll wonder how you ever lived without the Four Rules.

Rule Four In Your Budget

  1. Be purposeful in your spending.
  2. Consistently spend less than you earn.
  3. Watch that Age of Money grow!
Watch YNAB Rule 4

Why It Works

You aren’t stressed, because you’re not living on the financial edge. No more wasting time and energy timing bills to a specific paycheck. When a bill comes, you just pay it. The result? Breathing room. Less focus on today and more on tomorrow means bigger thinking, better decisions, and chiseled abs (it’s possible!).

Picture this…

  • Life Without Rule Four

    John knows the date of his next paycheck well in advance and has a stack of bills he’s timing to go out as soon as the paycheck hits his account—a stressful juggling act. He’s habitually anxious and frantic, and can’t stop thinking about how much he needs a vacation. But who has money for that?

  • Life With Rule Four

    John has at least a month’s worth of expenses budgeted before the month even starts. Lots of money, just sitting around, waiting to do its job. When bills arrive, he pays them—actually, he put them on autopay a couple months ago. He’s habitually happy and content, and can’t stop thinking about the money he plans to invest and next summer’s vacation.

More About Rule Four

  • What Is the Ideal Age of Money?

    Many a YNABer has noticed that little number in the corner of their budget and asked: what is age of money? What should my age of money be? Well, YNAB’s Age of Money tells you how long your dollars have been in your possession before you spend them. If your age of money is 14 …

    Read Blog Located in: Learn to Budget / Blog
  • How Carsen Saved Three Months of Living Expenses

    The Wake-Up Call In early 2016, Carsen Young, now 35 years old, found himself single and broke: “I’d been in a long-term relationship since college…When that changed, I found myself single and living only on my income. I realized that I needed to do something because, though I was getting by ok, I couldn’t get …

    Read Blog Located in: Learn to Budget / Blog

Want to Master the Method?

We’ve got the Rules and the resources! Learn more about taking total control of your finances by reading our book or watching a free video course. (You can even download this printable of the Four Rules to have it handy!)