January has a way of inspiring us to stop and evaluate where we are in life versus where we’d like to be. In reality, it’s something we should check in on regularly, but the passing time marked by a new year seems to be a good source of motivation to make some major changes—or try to, at least.

In my experience, the traditional idea of budgeting and New Year’s resolutions share a common theme: it’s something you want to do, it’s something you mean to do, it’s something you start to do—but that transition from an exciting new plan to a well-established habit is a hard hurdle to clear. 

Here’s why: changing your life involves more than a new planner, a new app, or a new to-do list (and I say that as someone who is a big fan of all three of those things.) Making any significant change to your routine or mindset requires a multi-faceted approach that includes self-awareness, accountability, and a system.

The planner, app, or to-do list is simply a tool. You need a clear understanding of what you’re building, why, and how before that tool can be used effectively. 

The following habit-building tips along with our free budget planner printable (keep reading to find it!) can help you organize your life, your finances, and your feelings about both. 

5 Truths I’ve Learned About Budgeting

I’ve been budgeting for four years, with some less-than-successful starts and stops before then. Here’s what I’ve learned during my misadventures in money management: 

Facing my messy financial situation was the hardest part. 

Making any significant change can feel overwhelming at first, and facing your personal finances is no different. I think a lot of beginner budgeters sit down to make a budget plan and experience some unexpected feelings of dread after making a list of their monthly income, monthly bills, credit card balances, and regular expenses. Getting that big budget overview is important, but it can really take the wind out of your motivational sails! However, sticking your head in the sand doesn’t work either. 

The thing that a lot of people fail to realize is how connected money and emotions are. Our spending is often influenced by our stress levels or mood, and our stress levels or mood are often impacted by our bank account balance—it’s quite a cycle. Exploring your spending habits and your experiences with money can help you change your relationship with it, which is why YNAB’s DIY Budget Planner printable workbook has a journaling section that addresses finances and feelings along with a budget planner template that helps organize and estimate your monthly expenses. 

Putting it all down on paper and thinking about how you got where you are can offer clarity and context about where you’re going (and how to get there!) 

Working on paying down loan balances? Learn how YNAB’s Loan Planner feature acts as a handy debt tracker.

No month is a “normal” month.

It’s tempting to wait for a “normal” month to start budgeting—a month without some sort of irregular expense like a weekend trip or renewing your car registration. Or to feel disheartened after you’ve built your ideal monthly budget only to have it all messed up by a large, unexpected bill payment at the end of the month, leading you to decide that this  just isn’t the time to try to start a household budget.

I’ve got good news and bad news, depending on how you look at it: there’s no such thing as a “normal” month. Think of your budget as a work of art sculpted out of Play-doh instead of marble. You can—and should—change it as needed. That’s why Rule Three of the YNAB Method is to Roll With the Punches. 

Budgets that don’t bend break, so build in some flexibility for long-term success. 

Learn more about creating a budget template. 

Starting small but staying consistent makes all the difference. 

The reason a lot of New Year’s resolutions—or any major changes—fail to stick is that we get extra motivated and try to “fix” everything at once. Good intentions, but hard to achieve and maintain!

Start small instead. Here’s what’s helped me: 

• Habit stacking:  I learned about habit stacking from James Clear, and it’s made it so much easier to build new habits! The basic formula is: After [current habit], I will [new habit]. Putting on sunscreen every morning is a habit that I’ve already established, so I started checking and updating my budget right afterwards. Giving a new habit a designated spot in my already-existing schedule helps build consistency. I also use our free printable habit tracker to visualize my progress. 
• YNAB widgets: I freshened up my phone screen to improve my focus in the new year and gave my YNAB widget prime real estate. Currently I have the 🥑 Groceries, 🍟Dining Out, and 💄Ash’s Fun Money categories stacked for easy access and to keep my spending on track. It’s a small step but it keeps my budget front and center.
• One word: Writer Susannah Conway doesn’t believe in New Year’s resolutions. Instead, she chooses a word that acts as her guiding light throughout the year. She offers her insight and many word-of-the-year ideas in this exercise. This concept is also helpful for loosely defining your financial goals. This is something new that I’m trying, but it makes sense!

Learn more helpful budgeting tips for establishing a habit. 

I’m still a spender, but I’ve learned the power of aligning my spending with my priorities. 

I like to shop! I’ve gone through phases of feeling guilt, shame, or regret about it, but I’ve found a way to embrace that reality. In the past, my budget worked as a glorified expense tracker—I wasn’t intentional about my spending decisions. Getting clear about what’s important to me (and budgeting accordingly) made it easier to align my spending with what actually matters instead of making random purchases for that temporary dopamine boost. 

One of my big budgeting goals for this year is less impulse shopping, more quality purchases, so I’m recommitting to the wish list! If there are clothes, beauty products, or stationery items I want, they are going on the wish list for at least 48 hours before I click “complete order.” It’s amazing to see how often I lose interest in whatever is sitting in my Amazon cart by then!

All of this has made it easier to save money for things I’m actually excited about.

There is freedom in creating a plan for your money. 

A lot of people (I was one of them!) think of budgeting as being restrictive. Who wants to commit to a new system that makes life less fun? No one. 

But when I started priority-based budgeting and got realistic about my savings goals, I realized how much peace of mind there is in being organized about my finances. Sticking to a weekly budget amount for buying myself little treats is worth it to see the amount of money in my  savings account grow. 

Another unexpected benefit? Communicating about our household budget and financial goals has been so good for my relationship! Before YNAB, money talks filled me with dread. Not only would I have overspent the budget, I would forget it even existed at some point during the month. Now that I have a YNAB budget that’s built around things that matter to me, I love looking at the budget and seeing different categories fill up.

YNAB recently released a new “Money Night, Done Right!” worksheet. If you are looking for a way to structure your next family budget date with your partner, it’s fantastic. We’ve already used it once, and I’m looking forward to our next money night. Working towards financial freedom together is fun!

Learn more about how YNAB makes it easier to budget together! You can download the date night printable at the bottom of the page.

How YNAB Helped 

As someone who loves systems, routines, and apps, I’ve tried a bunch of budgeting methods over the years. A budget spreadsheet on Excel, various budget apps, a bill tracker, a simple budget scribbled in a notebook, printable monthly budget planners, etc.—I’ve tried it all. 

YNAB is a zero-based budget, where you assign every dollar to a specific job to be done, which makes it easy to make sure your spending is intentional and reflects your priorities. More importantly, the YNAB Method acts as a decision-making framework for spending and saving—the app is the tool, but the Method is the blueprint. This difference is what made it easy to turn this new habit into a way of life. 

Learn more about the Four Rules of YNAB. 

Free Printable Budget Planner 

If you’re ready to start a personal budget of your own, you should give YNAB’s free 34-day trial a try—there’s no credit card required to sign up, so no sneaky payments if you fall off of the budgeting bandwagon and forget to cancel.

But if you want to get a big picture perspective of your current financial state, your relationship with money, and the goals you want to achieve, I highly recommend starting off by downloading YNAB’s free DIY Budget Planner printable workbook. It comes with a short, friendly five-part email series that helps you learn more about your finances and feelings. 

I recommend printing out the DIY Budget Planner printable workbook and compiling a budget binder where you can keep track of your financial information in one place (or maybe that’s just an excuse to buy cute office supplies? Whatever it takes to help you get a good start!)  

Follow me on TikTok at @TheOrganizedWallet for more tips and tricks to organize your home, finances, and life and good luck with whatever habits you’re building this year!

The post Habit-Building: Budget Planner Printable & Beyond appeared first on You Need A Budget.

Prefer to watch instead of read? Watch this video on setting up credit cards in YNAB.

Let’s say you have a -$2,400 balance on a Visa card. While you might not be able to pay it off right now, you do know you can make a payment of $300 each month to chip away at that balance.

When you set this up in your YNAB budget, you’ll see a new account listed with a negative balance of -$2,400 showing up in red text. Plus, you’ll also get a Credit Card Payment category added to your budget itself with a monthly target amount of $300. See what that looks like in the video below:

See how these new budgeters set up credit cards in their YNAB budget.

What Happens When I Buy Things With My Credit Card?

When you spend money on a credit card, you create a little bit of debt. Did you buy that gum? Well, sort of, but you haven’t actually spent any of your money. The credit card bought the gum for you and eventually you will pay them back. That’s debt. 

The important thing is that you reserve the money to pay off that debt, and that is what your YNAB budget is designed to do. Here’s how it works, using that gum (yes, silly) as an example:

1. When you add a credit card to YNAB, a Credit Card Payments Category is automatically created.
2. Assign some money to your groceries category (using money you already have!).
3. When you swipe your credit card to pay for the gum, enter a spending transaction for groceries in your credit card account. When you do this, the money to cover the gum purchase will move from that Groceries category to your credit card payments category. Automatically.

Now, your money sits there in the Credit Card Payment Category. Twiddling its thumbs. And that’s a good thing, because in this world nothing is certain, except death and taxes…and your credit card bill. Here’s how to do that last one in YNAB:

But What About Credit Card Interest?

Now, some of you may be asking, “OK, I get that, but my credit card company charges interest. How do I handle that?”

Interest is the fee that your credit card company charges you for extra time to pay off debt. Pretty much the only good thing about interest, is that it might motivate you to pay off your debt faster to avoid the extra charge.

As with any expense, you need to budget for interest payments. To do this, set up an “Interest” category in YNAB. If you don’t know exactly how much the interest will be, budget a little more than you expect.

Then, when interest hits your credit card balance, record it in your credit card account, just like any other expense. Instead of buying groceries (or something fun), you’re buying more time to pay off your debt.

Eyes on the Prize

The faster you pay off your credit card, the less interest you’ll pay, so be aggressive! YNAB is designed to help, that’s why our software handles credit cards this way—we want to help you focus on budgeting your cash, and avoid going further into debt, so that you can finally be debt-free!

Want More Help With Using Credit Cards in YNAB?

Our wonderful teachers offer free, live classes and have workshops specifically to master your credit cards and create a debt paydown plan.

Browse Workshops

The post How to Do Credit Cards in YNAB appeared first on You Need A Budget.

Don’t hold me back, Routine! Stop trying to tie me down, Routine! I’m sorry, Routine, I just want to keep my options open, OK?

But it never takes too long before I come crawling back…. Routine, I’m sorry—I’ll never stray again! You complete me! I need you in my life! Take me back!

We need routine. It frees up brainpower, it lets us go on autopilot. Routine allows us to be more productive, more organized, and more centered. With routine, we get the space and freedom that we craved all along.

The Start of the Budget Routine

I’ve been using YNAB, a budgeting system and a way for tracking your spending for ten years now. But it wasn’t until a few years ago that I applied this hard-earned wisdom about routine to my budget. Here’s what it looked like using this budgeting app before and after:

Before/No Routine: Late nights catching up on old transactions and printing out my statements from my bank accounts to do the dreaded reconciliation = BAD.

After/Routine: Make minor updates on my daily spendings that takes no more than five minutes a day, no need to dread a ginormous catch-up = GOOD.

It was a radical transformation once I settled into my budgeting routine. I saved time, saved stress, and felt like I was more in control than ever.

Here’s how I’ve optimized my money management routine:

Daily Budget Routine (Five Minutes or Less)

• Every morning (okay, almost every morning) I open the YNAB app and my online bank app to compare balances and add any missing transactions. Usually I do this while brushing my teeth (really!), but a couple of times a week I make it official and reconcile my monthly expenses on my computer instead.
• I also check the budget for red or orange and move money to cover unexpected variable expenses, increases to fixed expenses, or just plain overspending. I make adjustments as necessary (and adjusting my zero-based budget isn’t just expected with YNAB, it’s encouraged!). 
• During the day, I enter purchases on my phone as I make them. Usually. 

Once-a-Week Budget Routine (About Ten Minutes)

For me, this once-a-week check of my spending habits usually happens on Sunday while I plan my week. I’m sitting on my laptop doing it while I watch TV with my family. Here’s what I do:

• Reconcile accounts: If I haven’t actually fired up my computer all week, this is when I open it up and reconcile (which means I match my budget to my bank account and make sure they match). Did I mention reconciliation is super important?
• Match credit card balance: I visually match my Credit Card payment category in my budget and the account balance to make sure that I’m still a paid-in-full credit card user. This means I pretty much just use my credit card like a debit card and never carry a balance month to month (this is an underrated habit if you want to save money).
• Clear out transactions: I look at all my accounts in my budget and sort by cleared—I investigate any uncleared transactions that are older than a few days. 
  • Do I need to deposit any outstanding checks? 
  • Are they duplicates that need to be deleted?

Once a Month Budget Routine (About 20 Minutes)

I have a calendar item that repeats monthly on my calendar app to do this monthly check. I’ll start thinking about it naturally toward the end of the month when I’m wondering what I can buy next month and how I’m tracking on my financial goals. It often gets shuffled around to fall on the weekend before the month rolls over or when I get paid, but sometimes I get behind and it waits until a few days into the month. Here’s what I do:

• Check my Next Month’s Money Category: We’re living a month ahead with our money, and I use a holding category in the current month that houses all money earned that month. I do a quick check against my checking account to make sure all the paychecks that month are accounted for.

• Budget the money for next month: My favorite day of the budgeting month! I act like my own little financial advisor, but instead of trying to decide what I want my money to be doing decades from now, I’m honing in on what I want my money to do for this month. Money I earned this month moves from my Next Month’s Money category to the Ready to Assign, click forward to next month, and then budget all of next month. I use the Auto Assign buttons with some manual adjustments to fund my targets, keeping in mind any special events or purchases I’m planning next month.

• Tracking Accounts: I reconcile investment accounts to the current balance and check out my Net Worth report. Usually I’m trying to meet an annual Net Worth goal, so this is when I celebrate progress toward that goal!
• Then just lather, rinse, and repeat!

Making Your Budget Routine Stick

It’s worth mentioning, that part of the reason I’m able to budget so quickly is that, over the years using YNAB, I’ve simplified my accounts so they no longer feel overwhelming and unwieldy. 

Simplifying means having fewer accounts and fewer pieces in the air—which means reconciliation goes much faster. I never have extra transfer transactions to worry about, and my daily routine takes less than five minutes.

Another thing that has helped tremendously is YNAB’s Rule Four: Age Your Money. Aging your money means that all your income this month just sits around until the end of the month (or even longer!) so you can budget only once a month. It took me a while to get there—but, boy was it ever worth it!

The biggest hurdle is making the routine…well…routine. To help a shiny new habit like this stick, set an alarm for the daily check and calendar events for the weekly and monthly checks. 

Before long you’ll be doing your budget routine with your eyes closed. Well, wait, no, we wouldn’t recommend the eyes closed piece. Keep your eyes open for that one. Happy budgeting!

Still using pen and paper for your money management? Create a budget with YNAB and you’ll have an organized and convenient setup to make your budgeting habit more likely to stick!

Try YNAB for Free

The post The Five-Minute Budget Routine appeared first on You Need A Budget.

And it seems like making budget decisions that reflect what you want would be the easy part, right? It’s what you want! But getting to the heart of the matter isn’t always as simple as it seems; sometimes aligning your spending with your values requires digging deep and pushing hard on the why. 

How to Start Priority-Based Budgeting 

Sometimes a priority is hiding in plain sight. 

I have a friend who, like me, has a lot of kids, and they loved going to the movie theater. Their family just really enjoyed the whole experience—the popcorn, the sodas in those little carriers, the anticipation of the previews. This was their thing and they loved it.

But, boy, was it ever expensive! They were spending a ton of money, and it started to bother him. So, I asked him to tell me about the movies—that experience. 

Well, he outlined the popcorn and the carriers and the food and they loved the smell and they loved the anticipation. I asked why.

“We like being together. We like having the experience together. We’re all laughing together.” 

I said, “Well why?” 

“Yeah, it’s just a great family experience, where we’re all bonding and we can talk about the movie later on. The next day we’re eating dinner, I remember this part. That was so funny or this was interesting.”

I asked why again. 

“I guess just because we are bonding and making connections.”

Learn more about budgeting for what you love by watching, “How Do I Budget for My Hobbies?” 

Examine The “Whys” Behind Your Priorities

And then I could stop asking why because we’d uncovered the root. Did they love going to the movies? Yes. But the movies themselves were not what they valued most; it was the shared experiences, together as a family.

We brainstormed some ways they could achieve this same sense of bonding and connection without spending so much money. 

You might have different “whys” behind your own budget-busting expense, and that’s great! No judgment, just, “Why? Why? Why? Why? Why?” The exercise is just that, asking why until you are sure you’ve hit the heart of what matters most to you. It’s an essential part of the budget process—or should be. 

I want you to do this with each of your categories. Ask yourself why five times. Yes, five times! 

Why do I spend my money here? Answer it, ask why again. Answer it, ask why again and so forth. Do it five times and you’ll get to the core. You might be surprised at what you discover. 

Once you’ve got your answer, look at your budget, your categories, your spending, and your life with a fresh perspective. Are your dollars doing the jobs that matter most to you? Does your spending reflect your values? Is what you think you spend money on for enjoyment actually the thing that you enjoy?

Priority-based budgeting is all about examining your spending through the lens of the life that you want to live, and can become a roadmap to making sure you stay on the most fulfilling path. 

Create your own priority-based budget with YNAB. Try it for free for 34 days!

Try YNAB for Free

The post Get On Board With Priority-Based Budgeting appeared first on You Need A Budget.

Picture this: ten bills with the same due dates and instead of wallowing in despair, you just pay them—without panicking over the arrival of your next paycheck. The money has been sitting right there in your checking account for a month (or longer!). Sounds like a personal finance paradise, doesn’t it? 

But how can an ordinary person, with an ordinary salary, get so far ahead of their expenses that an entire month’s worth of new paychecks simply lay, unused, on top of the pile? 

The answer is bit by bit, month by month, and budgeting. Get creative, find ways to spend less, new ways to earn more, and watch your money grow (old). Here are some ideas on how to reach that blissful state of being a full month ahead with your bills, car insurance, debt payments, savings goals, and stay there. 

Kiss living paycheck to paycheck goodbye once and for all and start achieving your financial goals..

How to Get One Month Ahead of Your Bills

So the goal is to use last month’s income to pay next month’s bills—we’re basically trying to age our money. Unfortunately, you can’t simply take your dollars to the beach, sans sunscreen, and let the sun work its age-accelerating magic. 

You’re stuck waiting on the sands of time to get the job done. Luckily, there are unlimited ways to ramp up your savings as you wait for those gainful granules to fall. And here are ten strategies to put to use to get a month ahead on bills: 

1. Sell Stuff You Don’t Use

Just the other day I had an old pair of skis collecting dust in the garage. A few quick clicks and a Facebook Marketplace listing later, I had $50 of cold, hard cash.

You know how the old saying goes: one person’s trash is another person’s treasure. Sites like Facebook Marketplace, Poshmark, and Ebay make it easy to beef up your bank account by earning extra money and turning a basement of clutter into a gold mine.

2. Cancel, Cancel, Cancel

This one’s obvious, but it gets really good if you can be merciless. You can dramatically minimize your monthly bills with a few keen evaluations of the subscriptions you actually need and want. No use to pay bills for things you don’t need. Here are some examples:

• Cut down on your streaming subscriptions (Do you really need all seven?)
• Cancel an audiobook streaming service (Check your library for a free alternative, or many podcasts are free!)
• Switch from a paid service to a similar, freemium service (or downgrading your account for more cost-friendly pricing)
• Cancel a gym membership (Exercise can be free!)
• Cut ties with the monthly box membership that sends you more stuff than you could possibly need in a month. (And cut back on clutter!)
• Cancel annual subscriptions, too. (Do you really need the short delivery window Amazon Prime membership offers? Can you cancel AAA if your car insurance offers roadside assistance?)

3. Try the More Money Challenge

Sometimes we just need to hit the reset button with our spending. Maybe it was an out-of-control online shopping binge, or just a credit card-induced hangover from holiday spending. Swing the pendulum the other way with the help of an intense, all-out savings challenge! For 30 days, follow three simple rules to save some extra cash fast:

1. Track your spending (every dollar)
2. Only buy essentials (you decide what’s an essential)
3. No eating out (say what now?)

After 30 days of this intense sprinting, the average participant of YNAB’s More Money Challenge had over $1,000. 

Just think: in just over a month from now you could make some serious progress on your month-ahead goals with a little elbow grease and motivation from this challenge.

Learn more about the challenge.

4. Cook Your Own Meals

The degree of difficulty for this one depends on your lifestyle, but it packs a punch! Do some research for budget-friendly recipes, and you’ll really feel the difference. 

Bonus: cooking at home can help you minimize your spending and your waistline.

Cut food costs down even further with our free, printable grocery planner templates. 

5. Get Cheap, Real Cheap

I know some folks are very loyal to their favorite brands, but think about it. Would you rather wash cash down the drain via beauty products, or save that money and enjoy financial peace a decade early? 

Now, I’m not about to start throwing out brands or categories only to deeply offend, but I will challenge you to try generic on things you don’t actually care that much about.

For me, that means a lot of my grocery staples come in the form of the grocery store brand, I’ve yet to splurge on a $90 bottle of moisturizer (the $16 version seems to be working just fine), I get books from the library rather than buying, and for big ticket items I try to rent or buy used before purchasing. 

On their own, each of these little scootches toward frugalness add up to $1 here, $10 there. But once you start stacking these on top of each other, you might see savings of hundreds of dollars each month! Your savings account will thank you. Heck, it might even hug you, if it could.

6. Keep the Car and Fix It

The cheapest car is usually the one you’re driving right now. It is oh-so-tempting to sail into a different car with a low monthly payment and no money down once the $1,000 maintenance bills start showing up. 

But here’s the thing, paying to fix your old car (especially if you own it outright or are about to) keeps more money in your pocket than adding a car payment for a depreciating car that is a nice-to-have but not a need-to-have to your list of monthly expenses.

I drive a car that was made the same year that frosted tips and Motorola phones were all the rage. It’s old. A few months ago I paid $800 to fix something. What I fixed, I don’t know. My husband does though and apparently it was a fair price. But we own it outright. In the next year or two it will likely require another $1K-$2K of repairs. 

Things like these mental hacks are one of the best-kept secrets of being debt free or paying off debt faster. What if—instead of fixing—I decided it was time to get a new-to-me car with a $350/month payment. After a single year of ownership, that new-to-me car has gobbled up $4,200 of my hard-earned cash. After two years, $8,400.

If I would’ve just kept my old car and kept repairing it for about $1,000 a year, I’d have saved $6,400 from that decision alone! That’s enough for many folks to be a month ahead on bills (or more!).

7. Just Use Less

Turn down the heat, turn up the AC, drive less or get off of your phone! Look at your bills that fluctuate with use, and see what you can do to minimize your usage. Once we started meal planning and using up more food that was already in our pantry, we saw our grocery bill drop by over $100 a month! Of course, that won’t be possible for everyone, but what other bill could you affect with a behavior change?

8. Minimize Gift Purchases

People that love you will understand if you can’t participate in this year’s gift exchange. They want to see your face, and enjoy your company—that’s what really matters! So opt-out, or try something more economical.

Another idea that I came across, last year, was totally free: trading ‘grateful fors’. That family’s gathering sounded so fun, I might try it myself! Here’s how it works: Everyone writes down the top three things that they were grateful for that year. Then they go around the room sharing their memories. For a modest price increase, you could add hot cocoa, too. Sounds merry and bright to me.

Finally, you can gift experiences! A day hiking with Dad. An afternoon watching the entirety of a favorite movie series with your sister. If you thoughtfully customize this one for the recipient, it might just be their favorite gift from you yet.

9. Save Your Surges!

When you get money from tax returns, bonus checks, gifts from grandparents and, yes, even that extra paycheck in longer months? Treat them like fine cheese, and age them! These infrequent surges are much easier to bank, because they’re not part of your regular monthly income.

10. Hustle!

If you can find a way to add more income to your life with a side hustle, you’ll age your money at warp speed! Get a seasonal or part-time job—be strategic and pick an industry that you’d enjoy when you’re not at your full-time job.

Or offer your professional talents as a freelancer (just make sure you’re not violating anything in your employee contract). For motivation, check out this Heard it From Hannah video and get inspired.

How to Track Your Progress

You can make more money, you can spend less, but what will help tremendously in this process is a system to measure your progress. And we wholeheartedly suggest you need a budget if you don’t already have one. We’re on-brand, what can we say?

A zero-based budget will help you see exactly how much you need every month: everything from your monthly bills to your yearly car insurance and holiday spending. Plus, it helps earmark things like your emergency fund or savings goals to protect that cash too. 

With your monthly baseline, say it’s $3,500/month—you’ll know that you need to have $3,500 every month. If you make $4,000/month, you’ll know that in just seven months you’ll be there in glorious month-ahead land without too many difficulties. 

If you’re not currently using a zero-based budget, try YNAB for free! Use it to find your monthly number and then track your progress to breaking the paycheck to paycheck cycle. It’s only a matter of time before you’re out!

Remember, This Is Temporary.

As with most things in life, the speed at which you age your cash will vary. And remember, none of these suggestions has to be your new normal! Streamline your lifestyle for a tolerable amount of time, save up some dollars, and then adjust. You might find that you really don’t mind spending less in some areas, and keep some of your new money management habits, too!

For more help getting a month ahead, drop into one of our free, interactive sessions about cutting spending or saving money on groceries. It’s a place to ask questions and our teachers are wildly brilliant, relatable, and here to help.

Ready to change your financial situation for good? Try YNAB for 34 days—no credit card required. Create a monthly budget, set savings goals, make a debt paydown plan, and get a big picture perspective of your finances.

Try YNAB for Free

The post 10 Ways to Get a Month Ahead on Bills appeared first on You Need A Budget.

You decided you needed to make some sort of financial plan. You listed out your expected income and expenses. It took some digging, but it felt good. Then you kept track of what you spent by checking your bank account more often. When life didn’t go as planned, the budget couldn’t keep up. It felt like a big letdown—a new source of financial anxiety, even. You then decided budgeting just isn’t for you. Or maybe you’ll try this whole “responsible money management” thing again in a few months when life “calms down” and you feel more in control. 

But it’s not your fault that your budget didn’t work. It’s because you were using a flawed system. In that budget, there was no way to decide what was more important, no guarantee the month would go (and pay out) as planned, and there was zero room for flexibility. As soon as life didn’t line up with your predictions, that monthly budget failed in one giant womp-womp bummerfest.

And now for some good news: there is a budgeting system that works. This system has helped hundreds of thousands of people gain control of their money and experience less financial stress. These are normal people who had credit card debt, student loan payments, who order dessert in restaurants, and buy things at Target they weren’t planning on buying. It’s the same budgeting method that can help you too.

How Financial Health Affects Stress

Stress levels and financial health are undeniably linked, however, it’s not just financial problems that cause stress—it’s often money in general. Whether it’s shame about spending, anxiety over an emergency fund, or just the constant burden of doing mental math every time you pull out your debit card, feeling a lack of control around personal finances is a significant stressor and can have a negative impact on more than just your sense of well-being—it can affect your physical health, as well. 

A 2022 survey by Bankrate states that 56% of Americans can’t cover a $1000 emergency with savings, and the American Psychological Association (APA) report titled Stress in America 2022 reveals that money is a significant source of stress, with 57% of respondents reporting feeling concern about paying for things in the present, such as rent and groceries. It’s safe to say that financial issues weigh heavily on a lot of us. 

So, how can you find peace of mind?

Learn more about the connection between money and mental health. 

How to Stress Less About Money 

Budgeting isn’t often classified as self-care, but it should be. Financial stability has a ripple effect of benefits that reach so many different areas of life. And it isn’t as difficult as it seems. 

Improving your financial situation starts with a few simple rules: Four to be exact.

What are YNAB’s Four Rules?

1. Give Every Dollar a Job
2. Embrace Your True Expenses
3. Roll With the Punches
4. Age Your Money

Rule One: Give Every Dollar a Job

Watch the Rule One video.

In Rule One, every dollar you bring in gets a specific job (and we only give jobs to the dollars you currently have). Maybe some dollars get the job of paying for electricity, or maybe their lofty calling is paying for this month’s groceries. You want the unemployment rate for your dollars to be 0%, so give each one a job. Assign every dollar you have to a job based on order of importance or priority. You get to choose. You’re the boss.

Rule Two: Embrace Your True Expenses

Watch the Rule Two video.

With Rule Two, no more getting walloped on the side of the head with the twice-a-year car insurance, the three-times-a-year water bill, the yearly Amazon prime fee. Rule Two teaches you how to bake these non-monthly expenses into neat-and-tidy monthly payments. You save for these irregular budget busters equally all year, turning those unexpected choking hazards into a smoother monthly consistency.

Rule Three: Roll With The Punches

Watch the Rule Three video.

Rigid budgets break. They break on paper, they break your heart, they break your budgeting willpower.

So with Rule 3, we future-proof the ol’ budget.When you overspend on groceries (note we said when...not if)—just move money from another category that’s less important. Our community calls this WAMing the money, which stands for Whack-a-Mole(ing). Picture that arcade game: a mole pops up one place, then disappears below the surface and pops up another place. That’s your money, just reappearing in a different spot where it’s needed more. Go to town and WAM away.

Rule Four: Age Your Money

Watch the Rule Four video.

If you’re here to break the paycheck to paycheck cycle, this rule is gonna be HUGE. Like life-changing, stress-busting, happy-dancing, blood pressure-lowering-ly, mental health-improving-ly huge. 

Think of it like this: with Rule Four, you use last month’s money to pay this month’s expenses. You’re using “old” money instead of “new” money. We’ve got a handy little calculated “official age” in the YNAB app. While we don’t have a “right” number, we will say once it hits 30 days you will be living on last month’s money, and that’s something worth celebrating. Side effects of following Rule Four: forgetting it’s payday, not being afraid of the bills in the mailbox, and telling all your friends about this budgeting app magic.

When people put YNAB’s Four Rules into practice, the average person saves $600 in the first two months, and $6,000 in the first year.

Without further ado, let’s get you set up for budgeting success.

Video Course: YNAB’s Four Rules for Less Money Stress

24 Videos | Total Run Time: 58:25

Learn more about the Four Rules and the mindset that’ll get you in control of your finances in this free video course.

Watch the 4 Rules for Less Money Stress video here.

What you’ll learn:

• How to break the paycheck to paycheck cycle
• Why your budget failed in the past
• How to make a plan for your money
• How to smooth out your monthly expenses
• What your money needs to do next
• When to prepare for unexpected expenses
• How to spend money on what’s actually important to you

Follow this method and you’ll break the paycheck to paycheck cycle, reduce stress, get out of debt, save money, meet your financial goals, and gain total control of your money.

At their heart, these rules—and this method—aren’t really about money. They’re about creating the life you want. A life where you spend more time living and less time feeling stressed about money. 

If you’re inspired to get started on a new and improved life with less money stress, sign up for our free Change Your Money Mindset email series. It’s five short, friendly emails that come with a free downloadable DIY Budget Planner workbook that helps you organize and explore your finances and your feelings.

Ready to learn how to stress less about money with a system that will help you manage your financial future? Try YNAB for free for 34 days. No credit card or commitment required!

Try YNAB for Free

The post How to Stress Less About Money: 4 Simple Rules appeared first on You Need A Budget.

Sometimes it feels like one late-night snack run, one spunky grocery shopping adventure, one unexpected expense completely derails your budgeting progress. Thanks a lot, Flaming Hot Cheetos. You ruined everything. 

Good news: we have collected six budgeting tips to teach you how to stick to a budget so that you can save money and create a plan to meet your financial goals. A plan that will actually work this time. These habits don’t take long to implement (mere minutes per day), they’ll help you stay on track, and these habits pay off—quite literally. You’ll be a master of money management in no time. 

Before we get too far, we want to lay out a few common budgeting pitfalls right out of the gate. If any of these sound familiar, your budget will never work, no matter how hard you try. 

• Did you create a monthly budget that’s basically just a list of monthly expenses with static amounts that don’t change? Eek, it’s no wonder it’s hard! There is no such thing as a normal month!
• Is your budget planned with money you’ll get later this month, rather than the money you have right now? That’s totally a natural reflex, but you’ll never have a firm grip on your current financial reality with money that doesn’t exist in your account yet.
• Is your existing budget just tracking expenditures and has yet to change any of your spending habits? We’ve all been guilty of this at one point or another, but stick around if you really want to improve or optimize the plan for your personal finances. 

If these sound familiar, there might be something wrong with your entire budgeting setup. And hey, don’t feel bad about that—no one ever teaches us how to budget. But we have a proven system that works. Fix the problem now to finally reach those financial goals you’ve been dreaming of.

If you made it past the ringer, or even if you’re just hooked enough and want to keep reading, let’s talk about the best tricks and tips for how to stick  to a budget. 

How to Stick to a Budget 

Habit One: Assign Money When It Arrives

When a paycheck, birthday check, or any money at all arrives, that’s the moment it should be entered in your budget. Not before, and not too long after. Not only does this make paydays even more magical, this gets you in the right (but sometimes foreign) mindset to only budget the money you have.

In YNAB, if you’re someone who has accounts linked to your budget and your paychecks get deposited automatically to your bank account, this can be pretty automated. Whew—a habit you don’t even have to remember to do? Sign me up. 

Habit Two: Budget to Zero

Right after money comes in, you want to give every one of those dollars a job. Give them an assignment in your budget, a task. You are the boss! The question to ask is always, “What does this money need to do before more money arrives?”

”

Learn YNAB’s first rule to less financial stress: Give Every Dollar a Job

And when we say budget to zero, we mean budget to zero. ‘Tis the joy and power of a zero-based budget: and the key to financial clarity. Leave no dollar without a job, and no dollars hanging out in the Ready to Assign header in your YNAB budget. Employ them all!

Habit Three: Check the Budget Before Spending

Want a new t-shirt? Well, how much is in your clothing category? $90? Ok, that’ll get you a t-shirt! A downright supple t-shirt at that! (Welcome to YNAB rich, my friend). This goes for going to the grocery store—check your budget before you make that grocery list. The coffeeshop—don’t reach for that debit card until you’ve checked your budget. You get the idea.

Some days you’ll get a resounding YES to spending money, and other times you’ll get a NOT YET in response, and still others you’ll realize that a new pair of jeans just wasn’t quite as important as your passing urge would have you believe.  Think of your budget as an ever-present accountability partner who politely helps you evaluate those oh-so-tempting impulse purchases. It’s a great habit to just check your overall budget daily. Anchoring this habit to an existing habit is a good way to build it in. Some people do it when they are having their morning coffee, some people do it before they turn in for bed.

I flip through my transactions while eating a piece of toast for breakfast—it’s a good time, I’m living a wild life over here.

Daily check-ins keep the budget top of mind—and more importantly, it keeps the budget based on my priorities right in front of me.

Want an easy way to check your most used categories? iOS users can add widgets to their home screen for an at-a-glance view of things like grocery spending, fun money, or eating out.

Habit Four: Enter Day-to-Day Spending on Your Phone

We all have certain categories that we spend from on a day-to-day basis: groceries, gas, dining out, etc.  It’s best to get into the habit of entering these transactions right when they happen—at the point of sale. Start the gas transaction while the car is filling up with gas.  Don’t drive away from the grocery store until you’ve entered the transaction.

We’re not saying you should enter all your spending (though if you’re just getting started—Dave, our bootcamp teacher, recommends you do this manually just for a week while you’re learning the app), this is less intimidating. But it’s the day-to-day categories (not the monthly bills) that get people in trouble.

If you can use Direct Import in YNAB, it’s pretty handy to have it act as a failsafe, a soft landing in case you miss any transactions, and then you don’t need to remember the due date for the electric bill. So long as the amount is the same, and the date is within ten days, anything they enter themselves will match up when it imports, so you don’t have to worry about duplicates. 

Habit Five: Reconcile Frequently

Reconciliation in your budget is the act of making sure your budget matches your bank account and credit card. If the account balances aren’t right, there’s no chance the budget is right. Reconciliation is like laundry and dishes: the longer you put it off the more there is to do.  Frequent—even daily reconciliation is a terrific habit that will prevent a feeling of being overwhelmed down the road.

After reconciling your checking account, savings account, and credit card accounts, check the budget for overspending. Think of that as the closing task on the habits. Start in the accounts, end with the budget. That way, everything is up to date and accurate like an accountant closing end-of-year books. Unless they work at Enron, in that case all bets are off.

Habit Six: Give Yourself Permission to Change the Budget 

Budgeting is the process of prioritizing and reprioritizing.  It’s not a “set it and forget it” long-term plan. You’ll move money from one category to another to cover overspending—there’s not a month that goes by without me doing this at least 11 times. Call it robbing Peter to Pay Paul. Or my personal favorite, WAMing (Whack-a-Moling— like the arcade game where a mole moves from one hole to another).

Make changes to your budget, your categories, your targets whenever you need to or even when you just want to (increase fun money by $10? Ok!). Allowing yourself some wiggle room for those nights where you just HAVE to pick up take out will actually help you stick with budgeting for the long haul.

In the early days of budgeting, you might still be figuring out what your priorities are. When you make a change to your budget, it’s because you’re thinking, learning and adjusting. You’ll find your groove with time and practice. Getting it right the first time is nowhere near as important as developing the habit of tweaking and refining.

How to Stick to a Budget: One Day at a Time

These tips for sticking to a budget are simple, but we didn’t say they would be easy. Take it one step at a time, stack them on existing habits, and do whatever you can to make your budget top of mind in your day-to-day life. Soon you’ll be saving money and improving your financial situation with ease! 

Looking for more motivation and tips for sticking to a budget plan? Download our free DIY Budget Planner workbook to get a big picture perspective of your finances, goals, and feelings about money. It comes with five short, friendly emails that will help change your money mindset. 

Ready to create a budget you can stick to? Achieve your savings goals, build an emergency fund, eliminate credit card debt, and more! Try YNAB for free for 34 days. No credit card or commitment required!

Try YNAB for Free

The post How to Stick to a Budget: Proven Budgeting Habits appeared first on You Need A Budget.

We’ve got a grab bag of ideas for bank accounts of all shapes and sizes.

20 Financial New Year’s Resolutions 

1. Save money by participating in a money challenge

Looking for a financial challenge this January? Try the More Money Challenge to slim and trim your spending and get your finances in shape. There are only three rules, and you do them every day for 30 days:

1. Track your spending, every dollar.
2. Only buy essentials (You decide what counts as an essential.)
3. No eating out. No exceptions.

At the end of the 30 days, you’ll have a little nest egg saved (on average, people save $1,000) and you apply that to the savings goal you set at the beginning—perhaps it’s to pay off debt, save an emergency fund, or maybe it’s something fun like buying that big thing you’ve always wanted and paying for it in cash.

Alternate option: Try out the 100 Envelope Challenge, which lasts a year. Learn more and download a free printable. 

2. Pay off your credit card debt.

Debt isn’t free, and you’ve had enough of the expensive credit card variety. Do a full roundhouse kick on that debt balance this year as your New Year’s resolution.

Not sure where to start? Check out this free video course that’s full of lightbulb moments of why paying off debt has been so hard, and it’ll give you a new mindset that will make it easier to get out of debt fast (and stay out for good). Your credit score (and your savings account) will thank you!

3. Break a vice.

We’ve got a great recipe for this one: pick that vice (for some, Starbucks iced chai, for others smoking), break it out as a category in your budget and assign zero dollars to it. That means every time you want your vice, you’ve got to take money from things that might matter more. We’re not saying don’t buy it: we’re saying defund it. There’s an important mental clarity dance that will help you save more money and break that bad habit for good.

4. Pay off your car loan. 

Get one step closer to that debt-free life with a paid-off car. The average used car payment costs $381/month (and new cars cost $530/month). Imagine all the other things that money could buy instead. Need some inspiration? Success stories abound for paying off double-digit debt in a short period of time.

Get some accountability by using YNAB’s loan planner tool for extra motivation.

5. Break the paycheck to paycheck cycle.  

Make your 2023 New Year’s resolution to finally break the paycheck to paycheck cycle! You can, you really can. Learn how to get a month ahead with your money and feel that cycle of stress just wash away. Getting ahead of your monthly expenses is considered self-care; it’s not just your financial health that will improve—the wellness benefits of eliminating that source of stress are abundant! 

6. Fund a new computer/phone before your old one dies. 

Just picture the feeling when your phone does a triple backflip into the toilet (not even a splash! Perfect 10!) and then realize you already have a pile of money waiting to fund a new one. Just add a category to your budget for “New Technology” and start funding it. $50-$100 a month will get you ready for a new phone or laptop by the end of the year. Technology will break, and you can be ready for it with cold, hard cash.

7. Build wealth.

You make decent money but it never seems to accumulate. Get your finances organized and optimized with a wealth-building tool like YNAB and watch your net worth climb. For Ivan, a software engineer in Silicon Valley, he’s been able to painlessly trim 20% off his monthly spending and easily track his FIRE progress.

Those with large incomes might find their salaries become even more powerful with the intentionality and analysis of a budget. 

-Ivan, Software Engineer in Silicon Valley

You’ll have the data all in one place for making informed financial decisions, you’ll know exactly where your money goes, and you’ll supercharge your hard-earned dollars to get what you want out of life. Start your free 34-day trial of YNAB (no credit card required).

8. Get a big picture perspective of your finances. 

Money and emotions are more closely linked than we realize. It might seem easier to hide your head in the sand to avoid taking a good, long look at your spending habits, but getting clear about your current financial situation, your priorities, and your short-term and long-term goals can set you up for a lifetime of less stress and is the first step to true financial literacy.

Sign up for our Change Your Money Mindset email series (just five short, friendly emails!) and get our free DIY Budget Planner workbook to help you organize your finances and optimize your life. 

9. Save $1,000 for a rainy day. 

Statistics are scary when 60% of Americans can’t pull together $1,000 from savings in case of an emergency. Get on the brighter side of that statistic by pulling together a buffer for when the unexpected hits (because it surely will). Get started by checking out our comprehensive guide on how to save more. 

Want to build this nest egg and have it done in just over a month? The average person doing the More Money Challenge saves $1,000 or more.

10. Get the full employer match for your 401k. 

If you’ve got extra money sitting around, put it to use by upping your retirement contribution. Employers will often match 3-5% of your contributions. If you’re hovering around the low end of that number, bump it up for the full match. For a greater challenge, see if you can push yourself up to a full 15% retirement savings rate. Any additional funds can help! Set it up on auto-deduct and watch the balance grow.

11. Cut your student loan payment term in half. 

If you’re on a ten-year repayment plan and have a little extra wiggle room (or extra motivation) in your budget, consider crunching it down to five years. This doesn’t necessarily have to include any refinancing, it just means increasing your monthly payment and a sprint to the finish line, especially while federal loans are still on pause from interest.

12. Pay for someone else’s groceries. 

Spice up your money life with an extra heap of generosity this year. We heard the heart-warming story last year of one woman who paid for another person’s groceries at the grocery store  when she realized their card had been declined. What makes the story even more incredible is that she used to be that girl. Read the rest of her turnaround story.

When opportunity strikes, don’t miss your chance.

13. Don’t eat out for a month. 

Are you up for the challenge? Eating out is a perennial thief of hard-earned dollars and can be a good reset after a busy (and treat-filled) December. Try to go without spending any money on food or drink outside the home for one whole month. May the odds be ever in your favor.

14. Pay for your dream vacation in cash.

Wine-tasting in Italy, whale-watching in Alaska, the Great American Road Trip—we can dream of these in the not-so-distant future, right? Start turning that hope to reality by saving up for it in cash. Maybe you start a side hustle or find extra money in the budget by canceling streaming services; pick a goal worth the sacrifice!  It’s easy to set aside dollars and keep track of your progress in your budget! Happy travels!

15. Open a Roth IRA. 

If you’ve been doing the 401k thing and have heard of this Roth IRA jazz, maybe it’s the year you check it out. Some financial advisors recommend a 401k AND an individual retirement account as part of a comprehensive financial plan (especially if you’re an avocado-toast-eating millennial or woke gen-z’er with compound interest on your side). This gives you greater flexibility in your golden years (having both lets you choose from a taxed or tax-free pot of money).

What’s the difference between a Roth IRA and a Traditional IRA?

16. Give more away. 

To quote a country song, “never seen a hearse with a trailer hitch.” You just can’t take it with you! Maybe this is the year you start siphoning money off to that animal shelter, that literacy program, that community garden. Find a cause worth spreading and support them. Dollars can be a remarkable (and rewarding) support structure.

17. Rollover your old 401k. 

Take that old 401k from a prior job and consolidate. This will involve some phone calls or emails with the holding institution and new one, but you’ll feel great once it’s done. The biggest benefit: simplicity. Read more about how to do a rollover here.

18. Do a debt sprint. 

You don’t have an amount in mind, you just know you want to start crushing it. Check out this framework of how to pay off $26,000 in debt on a $35,000 per year income. Plus, don’t miss our debt bootcamp to get all the support and resources you need to race to the finish line.

19. Grant some of your wishes. 

Maybe you’ve been wanting a dutch oven for a long time, or a new pair of Wicked Good slippers. This is your year. Set up a category group for all these wishes, and whenever you are assigning dollars jobs, see if any are up for the task. Learn more about setting up a Wish List in YNAB or watch the video below.

20. Pay off zero percent interest loans. 

Just because they’re zero percent doesn’t mean they won’t mess with your money mind. If you’ve got an impending end to your 0% APR perk this year, hustle to pay it off before that date hits. Read this story of a nightmare year of zero percent interest for further inspiration. 

How to Make Your New Year’s Resolutions About Money Stick

If you’ve done this song and dance before you know the feeling come January 31—or January 3—when the wind goes out of your sails. Whoooooosh.

Here’s how to make this New Year’s money resolution stick. It’s all about tricking yourself.

Do it with a friend.

Yep, talking about money goals can be squirmy but sometimes you’ve gotta tell another living soul the very thing you want to do, in hopes that their iron will sharpen your own.

Take yourself out of the equation.

One of the greatest technological advancements of the century in the world of personal finance: automatic transfers and payments. If you’re trying to up your student loan payment, your mortgage payment, your retirement contribution, your savings rate, success is just a few clicks away with an automatic transfer from one account to another.

This one is quick: it doesn’t take more than a few minutes to do, then the hard work of saving is already done for you!

Shorten it. Sometimes, by a lot.

Maybe you wanted to pay off $800 a month on your student loans for the whole year. We love the tenacity. But by now maybe you know you’ll get to the end of the month, miss your goal by $200, and throw in the towel. It was too exhausting.

Instead, what if you just did $400 by January 15? 

Here’s what we love about this approach: you’re going to get to Jan 15 and hot dang, you’ve paid off $450! Then January 16 comes and you say—you know what, I can do that again. And you pay off another $400. Shortening your goals might be the wind in your sails you need to keep going, and you might get to the very same spot with more of your mental energy intact.

Write it down.

Ugh, I know this one feels so lame. But it’s SO TRUE. Printed, written, block letters, curly letters. WRITE IT DOWN.  We’ll even accept an email or a note in your phone on this one. You’ll be more prone to keep that promise you made to yourself when it’s clear and you can see it with written proof.

There you have it—20 ideas for your New Year’s resolution all about money, and how to make them stick. We can’t wait to hear your success stories. Send ’em over here when you’re ready or do some reading for your own inspiration of what’s possible. 

Is starting (and sticking to) a budget one of your financial New Year’s resolutions? YNAB can help with a free 34-day trial (no credit card required!)

Try YNAB

The post 20 Financial New Year’s Resolutions for 2023 appeared first on You Need A Budget.

For most of my life, I avoided budgeting because I didn’t want to think about money (or my lack thereof). When you’re living on student loans, money doesn’t even feel real. The numbers are so big, it’s hard to get your head around them. You might as well be playing monopoly. What’s another $5 latte when you have $30,000 of loans and counting? 

But money has a way of creeping into your thoughts no matter how diligently you try to ignore the subject. Will this debit card swipe overdraw my bank account? If I sign that year-long lease, will I be able to make the rent? If I put those Christmas presents on my credit card, will I have the money to pay it off? Can I afford to go out to that restaurant? Buy that coffee? Take that trip with friends? Will I be worrying about debt repayment for the rest of my life? 

Spending money is a part of daily life, and can quickly grow into a constant source of stress. 

Money has a way of creeping into your thoughts no matter how diligently you try to ignore it.

Money Stress Was My Normal State

In my early 20s, money created a vague, background anxiety to my life that became my normal. The more I tried to avoid thinking about it, the worse I felt about it. I still remember that physical sense of dread in the pit of my stomach at the thought of checking my account balances, which of course made me want to avoid checking them all the more. 

Money was something I felt like I should have a handle on which made me feel even more guilty that I didn’t. I would make some half-hearted attempts at getting my finances in order in an Excel spreadsheet or using budget apps like Mint over the years. I’d steel myself to finally look at my accounts, update the numbers, and create a budgeting plan. I’d feel a momentary sense of relief, only to never look at the budget again. It wasn’t until my mid-twenties that I decided I was tired of being scared of my finances. That’s when I found YNAB, which was the budgeting tool that finally made it all click for me.

I was tired of being scared of my finances.

We All Carry Around an Invisible Mental Load

Today, I make a living writing about work and productivity for a task management app called Todoist. I spend a lot of time thinking about the invisible mental load each of us carries around all day every day. Your mental load is made up of all the things you worry about and feel responsible for—like getting an important task done at work, responding to that email from your boss, putting a home-cooked meal on the table, paying your rent, renewing your car insurance, dealing with unexpected expenses, returning your mom’s call…the list goes on and on. 

All of those things require not just the time and energy it takes to do them, but the time and energy you spend thinking about doing them. Your attention is like a computer’s RAM. It can only hold so many things at a time before it becomes overwhelmed.

To make matters worse, our brains are hardwired to focus on scarcity. When you feel a vital resource is scarce—whether it’s food, time, or money—your mind fixates on it, which in turn makes you feel like you have even less of it. It’s a self-reinforcing cycle. The more scarce you feel money is, the harder it is to think about anything else.

I’ve come to think about my budget the same way I think about my to-do list—they’re both external systems for organizing things outside of my head so I can stop worrying about them. It’s a way to offload my RAM and free up mental space for what’s in front of me in the moment—whether that’s writing a blog post for work, spending time with my family, reading a book, cooking a meal, or anything else. 

It’s counterintuitive, but since I’ve started budgeting consistently, I think about money less, not more.

Your attention is like a computer’s RAM. It can only hold so many things at a time before it becomes overwhelmed.

3 Habits of Successful Budgeters

Just like a to-do list, a budget isn’t a set it and forget it kind of thing. I can teach you the best budgeting tips, but you have to find a way to implement those into your routine. How many times have we started over on a budget or downloaded a new task management app on January 1st only to let it drop a week later? You go right back to having vague worries in the back of your head about what you can and can’t afford and all the things you have to get done. 

For a budget or a to-do list to reduce your mental load, it needs to become a long term habit. Luckily, it’s not complicated. Once you have your budget set up (YNAB has lots of excellent advice on how to get started), it really only takes three habits to maintain it, adding up to about an hour of active effort per month once you get the hang of it.

1. Budget your money as soon as it hits your account (15 min/month) – This is YNAB’s Rule One: Give Every Dollar a Job. Every time you get a paycheck, budget that money right away. This becomes easier over time because you can draw on your historical spending to know how much you’ve actually spent (vs. how much you wish you had spent 🙃). I can quickly budget all of my money on my phone using the auto-assign options for either my monthly funding Targets (for my savings categories) or my average money spent each month for ongoing monthly expenses like groceries, utilities, eating out, etc.

2. Track spending & cover overspending as it happens (1 min/day) – Just like you shouldn’t try to keep track of tasks in your head, don’t try to keep transactions in your head. I enter most spending manually as it happens, especially for Venmo transfers since the transaction only appears as “Venmo” without any payee info. 

As a backup, I also have YNAB connected to my bank accounts to automatically pull in any transactions I may have missed. It matches with any transactions entered manually so there aren’t any double entries. It also pulls in automatic payments I have set up like my utility bills, mortgage payment, software subscriptions, etc.  

I approve any new transactions every morning over a cup of coffee on my phone. The app makes it really easy to cover overspending as it happens so I can easily move money between categories to adjust my budget (YNAB’s Rule Three: Roll with the Punches!). It takes about a minute and I know exactly where all of my spending categories stand. Then I forget about money for the rest of the day.

3. Reconcile regularly (15 min/month) – Reconciliation is key to make sure the system matches up with reality so you can trust that you actually have the money your budget says you have. I reconcile my accounts when I get paid, usually right before I give those new dollars a job (if you’re just getting started, YNAB recommends reconciling your accounts at least weekly as you get the hang of budgeting).

I open the YNAB web app on my laptop and log in to each of my accounts (one checking, two credit cards) on my phone to look up the balances and make sure they match with what YNAB says. I keep my savings account and investment accounts separate from YNAB so I can just let money accumulate there without thinking about it—it’s not in my budget so I can’t spend it. 

Because I use as little cash as possible and have YNAB automatically pull in any transactions that I may have missed entering manually, reconciling usually takes no time at all. 15 minutes would be a worse-case scenario when the balance numbers don’t match, and I have to go into my transaction history for the last month to see what I missed. It’s usually because I manually recorded a transaction from the wrong account.   

That’s it. Those are the three habits you need to master to turn vague money anxieties into confidence that all your spending is accounted for. 

9 Tips to Make Your Habits Stick

Of course, when you’ve spent your entire life avoiding your finances, starting and sticking to those three budgeting habits is easier said than done. Here are some of the best budgeting tips I’ve found that have gotten me to the point where budgeting is something I do automatically without giving it too much thought:

1. Download YNAB on your phone. It makes it easier to pull up your budget and approve transactions anywhere. The easier you can make a habit the easier it’ll be to make it stick.

2. Use your thumb’s muscle memory to your advantage. What’s the first app you automatically open every time you open your phone? Replace that app icon on your home screen with YNAB. 
3. Keep the red notification dot turned on so that it shows up on the YNAB icon when you have transactions to approve or overspending to cover. Whether it’s your email, Instagram, or your budget, that red dot triggers a reflex to get rid of it. Your budget is one app you want to be addicted to.
4. Piggyback off of an existing habit. Research shows that the easiest way to build a habit is to trigger it with a habit you already do every day automatically. For me, I check my budget, approve transactions, and cover overspending while drinking my morning coffee. Because there’s no way I’ll ever skip my morning cup of joe. 
5. Make a plan for when and where you’ll do your budgeting. Write it down. Put it on your calendar. If you use a  digital task manager, add it as a task with an automatic reminder. Studies show that making a specific plan for when and where you’ll do something—from exercise to voting to getting a colonoscopy—makes it more likely that you’ll actually follow through. And from what I hear, budgeting is far more pleasant than a colonoscopy.   
6. Pair budgeting with an activity you already enjoy. Maybe you reconcile your accounts while eating a treat you love, watching a show you’re addicted to, or nestled in your favorite window nook with your favorite beverage. Psychologists call this temptation bundling and it’s a powerful way to build any habit.
7. Build a streak for each day you get to “YNAB Zero” (no outstanding transactions or overspent categories). This is Jerry Seinfeld’s Don’t Break The Chain method of habit-building. Mark each day you successfully hit YNAB Zero on a calendar. Put up the calendar somewhere you’ll see it every day. The longer your streak becomes, the more motivated you’ll be not to break it.
8. Use YNAB’s quick budget shortcuts “Auto-Assign” and “Average spent”. These shortcuts make it fast to give every dollar a job—even on your phone—and help keep you honest about how much you really spend in each category. The more realistic your budget is, the easier it will be to stick to. 

9. Cover overspending right away. In the past, overspending was always my budgeting downfall. What’s the point of making a budget if I can’t stick to it anyway? YNAB made me realize I can’t see into the future and I shouldn’t expect myself to. A budget that can’t bend will break. YNAB’s mobile app makes it easy to identify overspending and move money from another category to cover it. Overspending might feel like a failure at the start. Instead of avoiding that discomfort, face it head on. I’m four years into consistent budgeting and I still overspend categories all the time, but now I know it’s just a natural part of budgeting.    
10. Fall in love with boredom. As with any new habit or goal, budgeting can be exciting at first, but the novelty wears off fast. Habits expert James Clear writes about the importance of “falling in love with boredom” in the pursuit of your goals. Whether you’re training for a marathon, writing a book, or trying to save money for an emergency fund, even the biggest accomplishments come down to small actions taken consistently over a long period of time. After four years, I’m happy to report that budgeting has made my money so boring I barely even think about it, and that’s just the way I like it. 

Give Yourself Permission to Wipe the Slate Clean

One last tip to end on: forgive yourself for the past money mistakes you’ve made. We all carry past financial baggage with us. Money gets all mixed up with our sense of self-worth and guilt and shame in complicated ways. But here’s the thing: any mistakes you’ve made in the past are a sunk cost—you can’t do anything about them. Don’t let any guilt or shame you may feel about the past keep you from making the next right decision. Give yourself permission to wipe the slate clean.

Ready to put these YNAB budgeting tips to good use and take back mental real estate from your money? Todoist partnered up with YNAB to create an Organize Your Finances template. The project template will walk you through all the steps to get your budget set up, pay off debt, and work towards your savings goals. It also includes all the daily, weekly, and monthly recurring tasks you need to make your budgeting habit stick.

See the Template

Becky is a writer and editor at Doist. She keeps her life in order with a lot of help from Todoist and YNAB.

The post YNAB Budgeting Tips: Habits of Successful Budgeters appeared first on You Need A Budget.

You want to slice and dice your financial data every which way? Check.

You want a high-level view of how you’re doing? Done.

You want to get down to the nitty gritty details of a particular category? Woot!

You want colorful graphs and pie charts? Bam. We’ve got you, fam. 

Data is an important part of personal finance, which is why the YNAB report functionality is an invaluable budgeting tool. You can track trends, check bank account balances, identify areas of overspending, and visualize your progress. 

So, without further ado, here’s how to do all of that and more:

See Your Budget Reports in YNAB

With budget reports, you’ll be able to isolate and focus on the data that is most important to you—and analyze your finances from several different vantage points. 

In all three reports, you can filter by category groups,  timeframe, and accounts. Just use the filters found at the top of each report screen:

See How Much You Spend on Immediate Obligations

The default view shows all of your budget categories, but if you want to compare specific master categories or even specific subcategories, you can toggle those categories on and off.

You can “Select All” to easily go back to the default view of all categories, or you can “Select None” to start with a blank slate and choose the categories you want to evaluate.

Splice and Dice Data by Dates

Using the preset filters at the top of the timeframe dropdown, you can toggle between “This Month,” the “Latest 3 Months,” “This Year,” “Last Year,” or “All Dates.” If those presets are too generic, you can enter custom start and end dates in the “From” and “To” fields, to query a specific timeframe.

See the Growth of a Specific Account

Most people handle unique accounts differently. Maybe you just want to look at your checking account, or you want to see the growth of an investment account that you’ve been tracking.

In the accounts selection dropdown, you can toggle individual accounts on and off or select “Budget Accounts” or “Tracking Accounts.” Easily view all accounts by checking “Select All,” or start with a blank slate by checking “Select None,” and then simply check the accounts that you want to see.

The Spending Report

The Spending Report brings all your spending to life! You can view your spending totals in a pie chart or your spending trends in a bar graph with a simple trendline that shows the data by month.

See Your Spending Broken Down by Category

In the Totals section of the Spending Report, you will see a color-coded circle graph showing your spending totals as a percentage of your overall money spent.

You can hover over each section of the circle graph to see both the total amount spent for each category along with the percentage of the total amount spent. You can also use the legend on the bottom right to determine which color corresponds to which category.

On the right-hand side, you’ll see the timeframe, and which categories and accounts you are currently viewing. You will also see your spending totals and averages for the selected categories.

The default view will show you all selected master categories. If you click on a category in the circle graph (or in the legend) you can then drill down into the subcategories of that particular master category. The section on the right will now show you the totals and average for only that master category.

Inside of that master category, you can drill down even further to see all of the transactions tied to a subcategory by clicking on that subcategory in the circle graph or in the legend on the right.

(Watch out, seeing every dollar you spent on groceries can feel a little painful.)

To go back up a level to see all of the master categories, just click on the “All Categories” (or “Some Categories”) link in the breadcrumbs in the top left:

Use Budget Reports to Check Your Lifestyle Creep

To see your spending trends, from month to month and over time, click on the “Trends” button in the upper right corner:

The Trends report is set up in the exact same way as the Totals report. You have your color-coded categories (now in a bar graph) on the left side of the screen and your total, average, and graph legend on the right.

You can hover over each colored category in the bar graph to see the total and percent of the total spent for each month. By clicking on a colored category, you will then drill down into that category to see how much money was spent in each subcategory. As with the Totals report, you can click on each subcategory (in the bar graph or in the legend on the right) to view all transactions tied to that subcategory.

Reports can be…revealing. Check out this video from the Budget Nerds on how get a handle on your impulse spending if you’re inspired to make some changes!

Track Your Net Worth

Breaking the paycheck to paycheck cycle is awesome, but building wealth is a close second. The better you budget, the faster your Net Worth graph will climb. Your net worth is determined by subtracting your debt from your assets. This report will hinge a lot on Tracking Accounts for things like mortgages, savings and investment accounts along with your everyday accounts like checking and credit cards.

Your account type is determined when you set up each account. Tracking accounts do not affect your budget, but can help you track liabilities and assets. To get a full picture of your net worth, make sure that you have all assets and liabilities in either tracking or budget accounts:

The Net Worth report works rather simply: debts (or negative accounts) are shown in red while assets (or positive accounts) are shown in blue. Hover over each bar (both red and blue) to see the breakdown of your debts, assets, and total net worth for each month.

On the right, you will see the timeframe, accounts, and total change in net worth for the selected timeframe. Additionally, you’ll see the itemized month over month change.

See What You Spent vs. What You Made

In the Income v Expense report, your income is shown across the top (under the green “Income” heading) while all of your expenses (read: spending) is shown at the bottom (under the red “Expense” heading).

This report maps both your income and expenses month by month along with the averages and totals for each category.

If you want to see subcategories, simply click the arrow to the right of each master category and the subcategories will expand underneath.

Perhaps the most useful information in the Income v Expense report is seen in the totals at the bottom of each month (along with the overall average and total). Over budget months (hopefully these are rare!) are shown in red while under budget months are green:

So, there you have it: all of your income, spending, assets and liabilities in reports that are easy to filter, manipulate and dissect. 

And pretty to look at and share. Dataheads, go crazy! The rest of you, explore a little and see how you can put this information to work to gain even more control of your finances.

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This post was originally published in October of 2016. It has been given a mini-makeover to help it maintain its youthful appearance.

The post YNAB Budget Reports: See Your Spending Trends appeared first on You Need A Budget.