Financial tracking

[Gman]

What is your category for withdrawing cash for going to the casino or strip club? Recreation?

"Entertainment"

[Honey Badger282.8]

Mint is like a free version of Quicken, it works but not as well. 90% of my non-fixed spending is done on my AmEx, I like the way it calculates everything.

[Irving]

My spending is primarily on my cash back Amex or my bank card. Makes things simple. My other credit cards get sad and send me letters so I remember I have them.

[Rumline]

I've definitely heard of YNAB. Would you say that it's had a positive affect on how you spend/save your money?

I'm another YNAB user and yes it has. I've also used Mint and Quicken (over five years ago) and those didn't seem like anything other than an expense categorization engine. Maybe that's all you're looking for and those would be fine. But YNAB had a different philosophy to it which changed the way I looked at money. This philosophy is baked into how you use it, so it took some getting used to and several hours reading their blog posts and watching YouTube videos. But once I got it, I broke my paycheck-to-paycheck living within two months and never looked back. It encourages you to "spend last month's money" so you're always riding on at least a 30 day cushion. That fact is what was so liberating: with minimal weekly maintenance I don't worry about money anymore; my bills are all on autopay and I don't have to worry about not having enough money to cover it. Plus by checking in at least weekly I make sure I'm staying aligned with my budget and savings goals, but that is not a feature unique to YNAB.

Another part of what I like about YNAB is they know that s*** happens, and the program is written to be flexible when you need to move money between pots or modify your budget etc. Also they make it easy to plan for those yearly recurring expenses like car insurance, Amazon Prime, etc and budget for them monthly so that when the next renewal rolls around you already have the money saved up and don't have to scramble.

[CS1983]

Budgeting and tracking expenses is a good, granted.

What I'm wondering, for folks doing this, is how much this tracking results in expenditure reduction in an effort to build budgetary surplus.

Is this an exercise in simply knowing where one wasted money, had too many extraneous luxuries, etc., or is it an exercise to ID and reduce for a more minimal, yet rewarding, lifestyle?

[Rumline]

Having a surplus for surplus's sake is hard to do because there's little meaning behind it, so you don't feel bad about cheating on it. One of the rules of YNAB is to "give every dollar a job." For me that means when I'm saving, it's for something specific, like "vacation fund" or "house repairs" or "retirement" etc. Having unallocated money in your budget is just an invitation to waste that money, IMO. Minimize your living expenses* so you can maximize progress toward your goals.

* To whatever level works for you. I choose not to go "Full Mustache" for example.

Tracking your expenses on a regular basis and checking progress against your budget is a good way to remind yourself not to spend money. I want to hit my goals each month for my savings categories, so looking at my budget category balances reminds me of how "little money" I have to play with. If my wife and I want to splurge on a nice dinner out, we need to take that money from somewhere else. If you're just looking at your bank account balance, it's easy to think "I have plenty of money!" YNAB helps me remember that all of that money already has a job. That helps me avoid wasting money.

[Irving]

Having a surplus for surplus's sake is hard to do because there's little meaning behind it, so you don't feel bad about cheating on it. One of the rules of YNAB is to "give every dollar a job." For me that means when I'm saving, it's for something specific, like "vacation fund" or "house repairs" or "retirement" etc. Having unallocated money in your budget is just an invitation to waste that money, IMO. Minimize your living expenses* so you can maximize progress toward your goals.

* To whatever level works for you. I choose not to go "Full Mustache" for example.

Tracking your expenses on a regular basis and checking progress against your budget is a good way to remind yourself not to spend money. I want to hit my goals each month for my savings categories, so looking at my budget category balances reminds me of how "little money" I have to play with. If my wife and I want to splurge on a nice dinner out, we need to take that money from somewhere else. If you're just looking at your bank account balance, it's easy to think "I have plenty of money!" YNAB helps me remember that all of that money already has a job. That helps me avoid wasting money.

Pretty much everything said above. I've known for a long time that I have difficulty saving just to save. I do best by 1) over paying on any loans, 2) saving for a very specific purpose. I had comfortable finances for years, but being able save a large amount of money as a cushion was also the catalyst I needed to take me to the next level to realize that the "good" from before is now below my personal standards.

[Jeff350]

YNAB has been incredibly helpful for our finances. My wife is a dentist, and came out of school with massive student loan debt. We have always wanted to pay it off quickly. Our first couple years our method was that at the end of the month any money over a certain level in the checking account we put towards the loan. I started YNAB in Jan 2014 and we have made huge strides in paying off the loan.

The difference is that we decide at the beginning of the month he much we are going to spend and how much we will put on the loan. It's easy to see that if you want to spend $500 on eating out, it's going to effect how much goes to the loan.

Granted, we haven't had a month yet where we didn't go over in some category, but YNAB makes it easy to move money from one category to another.


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[CS1983]

Having a surplus for surplus's sake is hard to do because there's little meaning behind it, so you don't feel bad about cheating on it. One of the rules of YNAB is to "give every dollar a job." For me that means when I'm saving, it's for something specific, like "vacation fund" or "house repairs" or "retirement" etc. Having unallocated money in your budget is just an invitation to waste that money, IMO. Minimize your living expenses* so you can maximize progress toward your goals.

* To whatever level works for you. I choose not to go "Full Mustache" for example.

Tracking your expenses on a regular basis and checking progress against your budget is a good way to remind yourself not to spend money. I want to hit my goals each month for my savings categories, so looking at my budget category balances reminds me of how "little money" I have to play with. If my wife and I want to splurge on a nice dinner out, we need to take that money from somewhere else. If you're just looking at your bank account balance, it's easy to think "I have plenty of money!" YNAB helps me remember that all of that money already has a job. That helps me avoid wasting money.

Makes sense. I'm kind of in this weird place now where I'm making more than I've ever made, but yet I know I can't approach it like that. I know that if I do enter into "I have plenty of money!" land, I'll very soon have not plenty of money.

I'd like to combine a stricter budget with minimizing, not to simply save for the sake of saving -- that can instill a miserly attitude. But for the sake of saving for harder times, etc. Hopefully, between both minimizing and stricter budgeting, the leaner times would be seen as an adventure in prior planning rather than a nail biter.

[Skip]

Budgeting and tracking expenses is a good, granted.

What I'm wondering, for folks doing this, is how much this tracking results in expenditure reduction in an effort to build budgetary surplus.

Is this an exercise in simply knowing where one wasted money, had too many extraneous luxuries, etc., or is it an exercise to ID and reduce for a more minimal, yet rewarding, lifestyle?

It's huge for me.

There are some lines we just can't move, like you'd expect. Healthcare is one of them. If my kiddo gets sick and needs an office visit, he's getting it. If he ends with Rx, he's getting that too.

I can move the mortgage payment by decreasing/increasing principal, but there's a floor there too.

All other consumables (non-contract) can move. We can eat higher quality/lower quality, shift our menu. We can give up a trip to Springs to see family. We can decide on a one time purchase/vacation. We can track cost of ownership of our cars that has helped us decide how/when to buy.

Knowing is the first step. It's also rewarding to complete a month under budget and see that $$$ move to a savings account. Yes, interest is crap (my wife is actually working on moving some money now). It's disappointing to be over budget but then we can look and see how to make it up to meet a year end goal.