Get Control Of Your Money
With the New Year comes lots of attention on starting over and getting things in order. Try finding a parking spot at your local gym! And check out the closet organizing systems on sale in January!
One area worth evaluating is your financial life.
If you’re like me, you need a system to keep track of your income, bills, spending, and budgeting.
For the past four years I’ve used a great piece of software called YNAB, short for You Need A Budget. Even though I’m still working on the budgeting aspect, YNAB has certainly helped me keep better records and track my spending.
Now YNAB has taken its method and software to a completely new level.
Instead of relying on a downloadable software package, YNAB has now become an online tool that connects all of your devices with your banks, credit cards and other financial institutions. Being web-based, it can more easily updated, and improved, and not rely on your precious storage of Dropbox. I can access YNAB on my computer, smart phone or tablet, all perfectly in sync and up-to-date with your banks and each other.
Reconciling is not longer a much-dreaded, tedious process, rather a simple matter of assigning imported expenses to your priorities. YNAB‘s founder, Jesse Meecham, says he and other early adopters of the new YNAB are actually reconciling more often because it’s less work, making them keep on top of their financial activity more than ever.
I am currently taking advantage of a free 34-day trial, using YNAB to sync with my financial institutions and give me a birds-eye view of all my accounts in one screen. No more logging onto separate bank websites to check on balances; I can even see my current mortgage status!
In a nutshell. I LOVE IT! And I’ll be happy to pay the annual fee when my trial expires.
The cost? $50 per year, or $45 per year if you sign up by January 31st. If you’re a current YNAB user, you can take advantage of the discount anytime.
You might be asking if it’s worth it. Personal Finance Software Reviews claims the average user saves $300 the first month just by applying the principles. It has personally helped me eliminate consumer debt.
The heart of YNAB is method. Sure, it’s an online tool, but it’s also a great way to handle money. Here are the rules:
Rule 1: Give every dollar a job. When you receive income, you allocate where it will go. This will allow you to live intentionally, making priorities with your money instead of being the victim of spending (then wondering where your money went).
Rule 2: Embrace your true expenses. This is slightly different than the old rule 2, which was “Save for a rainy day.” Either way, this principle helps you look at your expenses long-term, even those that don’t come every month. This might include things like Christmas gifts, tires and other vehicle maintenance, vacations and that replacement computer you know you will eventually need.
Rule 3: Role with the punches. In other words, you adjust your budget as life happens. There are different ways to handle over-spending in a category, like deducting from another one, or deducting it from next month.
Rule 4: Age your money. This category used to be called, “Living on last month’s income,” but it really implied “Stop living paycheck to paycheck.” YNAB now measures how old your money is on average when you spend it. The idea is to break the habit of spending money as soon as you get it For more on this topic, see the article, How Old Is Your Money?
Having a good system, tracking your spending and being intentional with your money reduces stress.
YNAB has really helpful websites, a blog and podcast (I’ve listened to all 205 episodes), videos, tutorials and even online classes to help you learn the system and realize your goals.
You may think a budget or staying on top of your finances is really limiting. But here’s the bottom line. It’s about aligning your money with your priorities.
So give it a try and see if you don’t lessen your stress, spend less and save more.