YNAB System BONUS – Jesse Mecham

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Over the years, we’ve had different taglines and messaging, our marketing has tried to describe YNAB many different ways. But hands down, my favorite is this: You’ve never budgeted like this.

I love it because it communicates hope and possibility. And I love it because it is true. A lot of people have tried to manage their money many different ways and nothing ever works—until YNAB. Here’s why:

Real Money, In Real Time

Most budgets are backward. You start by projecting or guessing what your income will be, then plan how to spend that money. The farther out you go with this exercise, though, the less accurate your guesses–about your income or your expenses–are going to be. (Go ahead, I dare you to try and perfectly predict your expenses even for a week). The result? You are always in the dark, guessing, and waiting for the other shoe to drop.

With YNAB, you only budget money you have right now. It’s an allocation system, rather than a forecasting system. Therefore, you are on solid ground, fully aware of what you have and where you are going.

When you only budget money you already have, you can have complete, perfect confidence in the plan you just made. It doesn’t depend on anything that may or may not happen. Is your bonus really going to be that big? Is your brother-in-law really going to pay you back? Confidence—whether you knew it or not—is why you need a budget.

Change Is The Only Constant

If it is impossible to perfectly predict your expenses, a budget needs to be nimble and adaptable, right? Except most budgeting systems are decidedly “set it and forget it.” You make a budget at the beginning of the month, set it in stone, valiantly try to bend the fates and laws of the universe to make the month turn out exactly like the numbers you guessed, er, projected. Oh, and then beat yourself up and feel guilty when it doesn’t.

Not a winning strategy.

A YNAB budget turns the whole exercise on its head with one simple idea: You can and should change your budget. When your plans change, you change your budget to follow suit. It’s just like anything else. I planned to have a solid four hours of writing yesterday until my son’s school called to say that he was sick and I needed to come pick him up. It happens in your life, and it happens in your budget.

This doesn’t mean a YNAB budget won’t hold you accountable. Since you’re only working with real money you already have, the bottom line is the bottom line. You’re just acknowledging that you didn’t have a crystal ball when you first allocated those dollars. Changing your budget keeps you nimble, keeps you budgeting, and as a result, you aren’t nearly as stressed about money. Like I said, you’ve never budgeted like this…

Your Future Self Will Thank You

Most budgets are built on fiction—pretending to predict possible future income and expenses. They are strict and rigid and make you feel badly when you guess wrong (so, all the time). A YNAB budget, on the other hand, prepares you for the future in two specific ways:

1. Just because you can’t perfectly predict your expenses doesn’t mean you can’t budget for them. Those student loans in a grace period are eventually coming due. Your family will eventually want to go on vacation. Your car will break down. Even if you don’t know exactly what these things will cost, treating them like a monthly expense, and putting money aside every month, (you know, with that real money you have), ensures money will be there when you need it. No stressing or credit cards required.
2. A YNAB budget encourages you–and teaches you how to–get at least one month ahead of your expenses. You gradually defer more and more of this month’s paychecks to fund next month’s expenses until–one magical day you are spending money today that you earned at least 30 days ago. And poof! Your stress is gone. When a bill comes, you just pay it. No big deal. You have the luxury of time to deal with the unexpected and is amazing.

It’s Different Because It Works

Budgeting with YNAB works. Don’t waste any more time on rigid budgets that deal in pretend money and make you feel guilty. Budgeting isn’t about guilt or shame or regret, it is about knowing what you want and making informed decisions to get you there.

You know what you want. Now prepare for the possibility that budgeting with YNAB could get you there.