The police officer, school teacher, engineer, firefighter, attorney, doctor, professor, designer, manager and rocket scientist all have one thing in common: they’re killing it financially with YNAB.
A close friend told me about YNAB, and I bought my first copy in September 2008. Our finances were in good shape at the time, and I wanted to maximize our resources. My husband was finishing his MBA, at night and on the weekends, and working at his dream job, which he spent several years at different companies to prepare for. We had an infant boy and a 2-year-old girl. Plus I had a part-time, apartment-management job. Things were busy with the kids, and the company I worked for had just purchased another nearby building, which they assigned me to rent and manage. The apartment office was attached to our apartment, and other than a few hours of preschool, I had the children with me all the time.
I kept close tabs on our budget in an Excel spreadsheet where I tracked income and expenses. We had no debt, and we paid off our credit cards every month. I tried to save as much as possible, and I adjusted my spending when things went over budget. We'd built up a buffer of 1 ½ month’s salary, and our emergency fund had the equivalent of 2 ½ months’ income in it. Since our rent was part of my pay, we used my husband’s income to pay for his school. His working professional program was even more expensive than the regular MBA program. Fortunately, my husband’s job paid well, and we decided to set up an investment that would help us save for a down payment on a house. It had some advantages, but we would have to make consistent monthly payments. Things were almost ready to settle down. The baby was getting older, the apartments were mostly rented, and school would be over in a few months.
Right before Christmas 2008, and the day before his last final, my husband called me and said he was getting laid off. It wasn’t going to be easy to find a job, even with years of experience and a new MBA. Unemployment in the Bay Area was very high, and most of our friends and acquaintances were either looking for work or close to people who were. There were stories about a worldwide financial crisis all over the news, and it wasn’t long before we received statements saying our investments were worth only half what they used to be. To add to the stress of all that uncertainty, we lived in one of the most expensive areas of the country, right by San Francisco. The amount of cash we earned from the apartments every month, before taxes, was about the same amount it cost someone to rent a studio apartment in our building. In addition, since our apartment managing company listed my husband as a manager, too, the State of California (EDD) still considered him to be employed. We could not get unemployment benefits during any of the 14 months it took to find work. And we still had to make our down payment contribution every month. We lived very lean.
YNAB kept all my accounts in front of me. I knew what to expect for my expenses. I knew what I had, and I knew how to make it work. Because of our buffer, we were able to anticipate needs and figure things out. Fortunately we had some severance pay. We found small gigs on Craigslist, and I took a part-time administrative assistant job at the local YMCA. Someone also repaid a loan of several thousand dollars. While we were job hunting, we didn’t go into debt, and we never had to use our emergency fund. We were very blessed.
After looking for work for a year, we decided the apartment management situation didn’t give me enough bandwidth to provide our children what they needed, so we gave our notice. We stayed with family for several weeks and loaded everything we owned into a storage unit. Things fell into place, thank goodness, and the job came shortly thereafter. Since February I have been a full-time stay-at-home mom, and I really value being with my children without the distractions I had with my job. I believe my children benefit from having more time with their mom. I also enjoy being my own boss and focusing on what is most important to me. My husband works as a Community Manager with Google.
I’m populating YNAB again after my latest upgrade, and I’m trying to make today’s numbers look like what I actually have. YNAB is very user friendly for setting up and tracking accounts and budget categories, but I need more help with accounting principles. I’m looking at this month, but I paid my rent before the start of the month, and I’m putting money on my credit card that I’ll pay next month. Yikes! Although, I have not done any training, I think even after all this time there is a lot for me to learn, and I hope to participate in the training soon. Plus, it’s free! Since I’m not working anymore, and we now have a rent payment, I decided to listen to a webinar sponsored by YNAB on how to earn extra income. That led to additional savings with a partner website. I have since been working on automating my finances, and YNAB has been a big help. YNAB automatically inputs the regular deposits or transfers I set up for my accounts. While I don’t have much in most of them, it sure seems like I have a lot of accounts to keep track of. After checking and savings, there’s the 401k, credit cards, health savings account, cash, and IRAs. It is so much easier to keep track when they are all in one place. I appreciate the new look and other features of the upgrade, too.
Having separate ledgers for accounts saves me time in keeping things reconciled. I haven’t technically been balancing a check register, but I update my YNAB with changes so my records reflect what is actually going on. Although I really dislike seeing red in any category, sometimes I do go over. I used to spend a lot of time adjusting budgets so it wouldn’t show as much overspending. I can better plan now, and I’m also more content to show some red to remind myself that sometimes I spend more than I planned. One of the things I like most about YNAB is the advantages it gives me with preparation. Because I have cash on hand, I can buy things when they go on sale. I have also saved money by paying for insurance and tuition in advance. Keeping a little extra in savings gives me added freedom, too. I had to transfer my daughter on the 4th day of school this year. Money gave me additional options, and I was able to put her in a great school that was a better fit for her.
Today we still have a buffer and an emergency fund. We’re investing for the future and earning interest. In fact, while we brought in a total of about $90,000 from full-time work during the last 2 years (not including the severance), we saved more than $55,000 for our house down payment. That’s about $2,000 per month! I get excited when I open YNAB because I see a picture of where we are financially. We are getting closer to our goals, and I feel a sense of security knowing we are preparing for retirement and emergencies.
I knew what to expect for my expenses. I knew what I had, and I knew how to make it work.