speak to me of YNAB and such

[stillmovingforward]

Ok - I'm moving to a new job next week. It pays a lot more and the hours are not nearly as insane as my last job. I'm super excited.


On the other hand, I REALLY need to get a better handle on our finances.  We only owe a few thousand (makes me unhappy), want to help DD1 with living expenses (in college), I'll be making a lot, but I don't feel like I really know where it goes.

We have had some issues this year which drained my emergency fund.  So I want to get that back up.  What do you guys use that is easy?  I hear YNAB batted around a lot.

[Blonde Granny]

I have used it since April. So far I really like it. Setting the line items for the budget took some time, but once done its easy to use.  Entering transactions is also quite easy. A lot of the people here use it, more will be along to give their opinions.  Watching the webinars that YNAB offers Also will help you learn ow to use it.

[Deleted]

I've been using YNAB since 2008 and can't imagine managing my finances without it anymore.  I WISH I would have known about it years earlier.  It has seriously changed my life.  Anyhow, they have a 30 day free trial, but it can sometimes take a bit for it to click, so I suggest watching all the webinars first so you have a good feel for how it works before starting the clock on the trial. 

[justme]

I use YNAB. But to be honest I was never overspending before. Maybe once a year I was takinging from savings, even cash flowed vacations. Now I just know better what I'm spending it on and sometimes I go nevermind spent too much there this month.

I started a new job nine months ago with a 17k ish raise. Starting next month my housing costs are going up a bit because I just bought a place, but the best thing I did was to essentially kept the amount I spend the same. I rounded up to the nearest 100 per pay period (equaled around a 100 a month raise) of what my checking saw before and the rest when to savings.

[shelby]

I just started using it again this week and I love it! I am new still so it will take a few months of adjusting I'm sure to get it right. It is so easy and tracks everything which I never did before, I am sure it will have a big impact on my spending and savings.

[swamp]

Sept 10, 2015 11:45:35 GMT -5 Sum Dum Gai said:

I used mint for a little bit, but the spending tracking part was a little obnoxious. I live in Hollister. I use a debit card for everything. It was putting 90% of spending down as clothes because it would see the word Hollister somewhere in the merchant line.

[saveinla]

Before buying anything, I would suggest increasing your 401K , setting an  automatic transfer to a savings account and finish paying off the debt. 

Congrats on the new job and increase in salary.

[The Captain]

I started out using Microsoft money and transitioned to quicken when that software was abandoned.

Quicken allows me to track all spending and investments in one easy place.  Haven't tried mint or YNAB, so I'll only say quicken does what I want it to.

[kittensaver]

Sept 10, 2015 11:51:49 GMT -5 saveinla said:

Before buying anything, I would suggest increasing your 401K , setting an  automatic transfer to a savings account and finish paying off the debt. 

Congrats on the new job and increase in salary.

I agree with this. With your salary increase max out your retirement savings and rebuild your emergency fund; also make a plan to burn any remaining debt. Then you are truly in a stable position to help out your daughter. The tracking vehicle doesn't really matter that much; what matters is finding something you will stick to using. Good luck!

[Deleted]

Sept 10, 2015 11:52:08 GMT -5 The Captain said:

I started out using Microsoft money and transitioned to quicken when that software was abandoned.

Quicken allows me to track all spending and investments in one easy place.  Haven't tried mint or YNAB, so I'll only say quicken does what I want it to.

I used MS Money for many years and was really sad to see it go.  For a year I was doing both Money and YNAB at the same time, then I got sick of having to download everything twice and more places were not supporting it.  Money was awesome for reporting and seeing where all the money went.  YNAB is awesome for budgeting and for telling my money what to do ahead of time while also having a searchable register (with some reporting capabilities) so it was more useful to me on a daily basis.  YNAB has become a little better in the reporting abilities, but I do miss that part of Money. 

[Waffle]

Sept 10, 2015 11:55:25 GMT -5 Sum Dum Gai said:

It's funny now but it almost cost me my marriage. I imported our last three months of bank statements, pulled up a report thingy, and it said we had spent over $15k on clothes. I almost had a heart attack. Came home and yelled at the wife for buying so many clothes. Started asking where she was stashing her shoe collection. Thought she might have a storage unit somewhere just packed with new clothes and kick ass heels.

You've met my wife. How well do you think that conversation went for me? I'm lucky to be alive right now.

 That's hysterical.  

[wvugurl26]

Sept 10, 2015 11:55:25 GMT -5 Sum Dum Gai said:

It's funny now but it almost cost me my marriage. I imported our last three months of bank statements, pulled up a report thingy, and it said we had spent over $15k on clothes. I almost had a heart attack. Came home and yelled at the wife for buying so many clothes. Started asking where she was stashing her shoe collection. Thought she might have a storage unit somewhere just packed with new clothes and kick ass heels.

You've met my wife. How well do you think that conversation went for me? I'm lucky to be alive right now.

You really think your wife would spend that much on clothes? I just don't see it. Now it would have been entertaining to see that conversation though.

[wvugurl26]

Sept 10, 2015 13:18:40 GMT -5 Sum Dum Gai said:

You really think your wife would spend that much on clothes?

Totally depends on our income and asset levels. If we had millions, yeah she would have the more expensive closet, and I could easily see that running into the five figures.

It's not her top priority or anything. Her home library would probably be the biggest room in the house and cost two or three times as much. Easily.

The library I could totally see. I just didn't see clothes as being her top thing.

[tskeeter]

Financial priority suggestions:

Emergency Fund

Retirement Savings (that will allow you to retire by age 50 or 55, if you want)

Debt

Kids College Expenses

Great Vacation

Lifestyle Creep

[mojothehelpermonkey]

I track my spending and net worth using an excel file where I enter the information manually. Does that make me a luddite? I like doing it this way because I am less likely to swipe my card and piss away money, when I know I will have to enter that into my excel file at the end of the month.

[Knee Deep in Water Chloe]

i love YNAB!!!

[Deleted]

Sept 10, 2015 18:33:30 GMT -5 mojothehelpermonkey said:

I track my spending and net worth using an excel file where I enter the information manually. Does that make me a luddite?

No- you're using Excel, after all! I download all my credit card transactions and assign cost categories, then manually enter what's paid out of my checking account. I don't track cash because we don't spend that much cash.

We're retired and I'm finding it an interesting exercise. What I really want is a baseline in case of a bad year with the investments. If we kept the same level of grocery and utility spending but cut clothing to almost nothing (it's pretty low now) and didn't take our annual major trip, for example, what would we need for living expenses?

I've been doing this for the last 12 months but we moved 2 months ago so I don't really have a good number for this house since utilities vary.

[Blonde Granny]

Using YNAB, I was very surprised at the number of spending categories that we ended up having. Day by day as money was spent, I would sit there in the car looking at the receipt and say "what category does this fall in", usually the answer was we need another category. We ended up with 30. Until we did this exercise we had no idea where money was spent or how much was spent each month.

Today, I know what it spent to down to the last penny. I enjoy entering expenditures, we attempt to not go over budgeted amounts, but if we do, it's OK, but we don't transfer money from one category to another as YNAB tells you to do. Ours is simply used to track monthly expenses, and nothing else. And I like it much better than Quicken.

[Knee Deep in Water Chloe]

Blonde Granny, we have 14 categories with 74 sub categories. 

[stillmovingforward]

YNAB has a 30 day trial on right now. I think I'm going to try it out. Right now, I get the emergency fund, retirement (could do more there), and DD1's college help. But we seems to 'lose' more money than we should. So there are some HUGE leaks and I have no idea where it goes. I know SDH isn't going to go along well with this so I'll do the best I can and just attribute anything above and beyond to his 'expenses'. And then I'll have something to show him. As in, 'I've tracked all the house and my expenses, so the rest of this must be yours..........'. It would be easier if he was on board.

[phil5185]

To my mind, DR, YNAB, and others micromanage the spending budget and fail to look at the investing budget. We give priority to monthly investing budget and allow the leftovers to go to spending.

only owe a few thousand
The goal is not to get rid of debt, it is to build Net Worth - and to direct your income stream to it's highest and best use.

But a good way to get top-down picture of your situation is the Pareto Analysis. List you gross annual outlays, include everything - SS, Med, fed income tax, state income tax, insurance, etc. The list should sum to your gross annual income. The do a 'descending sort' on the list - the top item is likely to be house payment (eg, $24,000). And then Fed Tax, SS & Med. Transportation, maybe $15,000. And so on.

I know SDH isn't going to go along well with this so I'll do the best I can and just attribute anything above and beyond to his 'expenses'. And then I'll have something to show him. As in, 'I've tracked all the house and my expenses, so the rest of this must be yours...

And WAY down at the bottom of the list you'll see things like Starbucks, $2000 per year. You have separated the "significant few from the insignificant many".  And you realize that quitting the $2000 latte habit won't do much to affect your spending, you'll need to look at the $60,000 Top 3 to make a change.

[mojothehelpermonkey]

Sept 13, 2015 8:31:41 GMT -5 @athena53 said:

Sept 10, 2015 18:33:30 GMT -5 mojothehelpermonkey said:

I track my spending and net worth using an excel file where I enter the information manually. Does that make me a luddite?

No- you're using Excel, after all! I download all my credit card transactions and assign cost categories, then manually enter what's paid out of my checking account. I don't track cash because we don't spend that much cash.

We're retired and I'm finding it an interesting exercise. What I really want is a baseline in case of a bad year with the investments. If we kept the same level of grocery and utility spending but cut clothing to almost nothing (it's pretty low now) and didn't take our annual major trip, for example, what would we need for living expenses?

I've been doing this for the last 12 months but we moved 2 months ago so I don't really have a good number for this house since utilities vary.

I hate setting a new baseline after moving! With my last move, I went from living in place where I had to drive everywhere and spent a lot of money on gas to a place where I spent less money on gas but could walk down the street and spend $6 dollars on an ice cream cone. It all adds up, but in different ways.

[Blonde Granny]

Sept 13, 2015 10:45:54 GMT -5 Knee Deep in Water Chloe said:

Blonde Granny, we have 14 categories with 74 sub categories. 

I think figuring it like you are, we have 6 Master categories & 30 sub categories.  Since we only track spending, and the money counted is fixed income not earned income, we don't us YNAB as instructed.  We don't do the separate tracking of credit card charges either, everything is deducted from our checking account.  If a CC bill gets paid, there is no transferring etc. and the accounts are zero(ed) out at the end of the month, we don't roll over anything to the next month.

[Deleted]

Sept 10, 2015 12:18:17 GMT -5 minnesotapaintlady said:

Sept 10, 2015 11:52:08 GMT -5 The Captain said:

I started out using Microsoft money and transitioned to quicken when that software was abandoned.

Quicken allows me to track all spending and investments in one easy place.  Haven't tried mint or YNAB, so I'll only say quicken does what I want it to.

I used MS Money for many years and was really sad to see it go.  For a year I was doing both Money and YNAB at the same time, then I got sick of having to download everything twice and more places were not supporting it.  Money was awesome for reporting and seeing where all the money went.  YNAB is awesome for budgeting and for telling my money what to do ahead of time while also having a searchable register (with some reporting capabilities) so it was more useful to me on a daily basis.  YNAB has become a little better in the reporting abilities, but I do miss that part of Money. 

I still use MS Money. I love it, but it's the first and only personal finance software I've ever used, so maybe I just don't know any better lol. I downloaded a free trial of YNAB a while back but I was confused about how to set it up and didn't spend a lot of time trying to figure it out.

[Deleted]

Sept 13, 2015 15:35:37 GMT -5 phil5185 said:

But a good way to get top-down picture of your situation is the Pareto Analysis. List you gross annual outlays, include everything - SS, Med, fed income tax, state income tax, insurance, etc. The list should sum to your gross annual income. The do a 'descending sort' on the list - the top item is likely to be house payment (eg, $24,000). And then Fed Tax, SS & Med. Transportation, maybe $15,000. And so on.
<snip>
And WAY down at the bottom of the list you'll see things like Starbucks, $2000 per year. You have separated the "significant few from the insignificant many".  And you realize that quitting the $2000 latte habit won't do much to affect your spending, you'll need to look at the $60,000 Top 3 to make a change.

I agree with your approach of "invest first, then spend what's left and don't over-analyze", which is how DH and I lived until I retired. It worked well for us.

For people trying to pay off debt, though, or trying to find ways to save because right now they can't, those little categories may painlessly free up money that can be used for better purposes. The Top 3 may be hard or impossible to change over the short run. One of our Top 3 is health insurance premiums. DH is on Medicare and I already have a high-deductible ($6K) plan- not much room to do better. The biggest expense category has been home improvement- both getting the old place ready to sell and fixing up the new place. We're about done with that, thank God. It's good to see which expenses are non-recurring.

Sept 13, 2015 16:03:57 GMT -5 mojothehelpermonkey said:

I hate setting a new baseline after moving! With my last move, I went from living in place where I had to drive everywhere and spent a lot of money on gas to a place where I spent less money on gas but could walk down the street and spend $6 dollars on an ice cream cone. It all adds up, but in different ways.

Yeah, I found the opposite. We found our dream home on a lake but it's further from many things and our gas bills went up. Mortgage is cheaper, cable is cheaper (they had to compete with Google Fiber ), utilities probably about the same, and the house is much easier to care for- one less floor, fewer rooms, no pool.

[Apple]

I just set up my YNAB stuff again today, using numbers from last month as a guide.  I'm probably not doing it "right" though, lol.

I pay for my property through an allotment on my paycheck, so that money never hits my account, goes straight to pay off that debt.

I'm thinking of setting up savings the same way, so it goes straight to my savings account and doesn't show up as net pay on my paycheck.

I save 16% to my tsp, so that comes before my net paycheck as well.

My question is, where do you keep the balance of your sinking/"rainy day" funds?  What I did was put all the money I need for sinking/"rainy day" funds into a savings account, and just left the balance on the budget page alone (but with a note that I had transferred the money to savings).  This includes things like car insurance, charity, emergency fund, medical bills (future), etc.  I figure, when I need it, it's in a "short term savings" account, money that I know is there to cover the less frequent bills, so don't worry about taking it out. 

Once the rolled-over available balances get large enough in other areas (groceries, gas, eating out, fun money...), I plan to move the extra into a longer term savings. 

This month, with the concert and a little spending binge (that was planned), my fun money used was much more than it would be on a typical month, so next month I planned to put less aside.

I don't know...  I think I'm just going to use it for a little while to help myself track and be honest about where money goes, to see if I want/need to make more changes.  After that, I may go back to how I did it before, but with a better idea of what is practical to save each month, and how much I should save for long term, and how much for short term (for me, short term is used within the year, long term is for stuff like cars and big vacations that are done every few years ETA: or the stuff I want to never touch, like the emergency fund.  Retirement savings is different than long term savings for me).

Before, I would just say "on the 13th day of the month, any money over $x in the checking account goes to savings".  My goal was for that money to be around $1k/month.  I always had enough in checking to cover the periodic big bills, and rarely end up with less than $x on the 13th (my buffer).  If I did, it just meant I'd focus on spending a little less next month.  So, other than retirement, I wasn't really taking savings off the top, but I was still saving.  I think what I'm trying to do is reverse that a little so I take savings off the top, spend money, then still have more to take for savings on the 13th.  I'm just trying to come up with "what is a good off-the-top amount for me?"

Lol, that may only make sense to myself, but financially I've been doing ok for myself.  I'm just trying to make sure with a kid maybe going to college next year, and a possible decrease in pay in two years, that I don't blow the money I'm going to be saving by not having a 90 mile/day commute anymore.  That gas adds up!

[Deleted]

Sept 13, 2015 18:41:15 GMT -5 Apple said:

My question is, where do you keep the balance of your sinking/"rainy day" funds?  What I did was put all the money I need for sinking/"rainy day" funds into a savings account, and just left the balance on the budget page alone (but with a note that I had transferred the money to savings).  This includes things like car insurance, charity, emergency fund, medical bills (future), etc.  I figure, when I need it, it's in a "short term savings" account, money that I know is there to cover the less frequent bills, so don't worry about taking it out. 

I keep all my sinking funds in my checking account because I get 2.5% interest on anything up to something like 20K.  With YNAB I'm only looking at the category balances when I spend and not the account balance, so it doesn't trigger any overspending.  However, if you want to transfer them to another account that works too.  You can make your savings account on budget as well as your checking and allocate everything in there to whatever budget category you want.  Then all you have to do is uncategorized transfers between accounts.  You can have as many checking, savings, credit card accounts as you want feeding the same budget.

[Blonde Granny]

I have our personal escrow account as a sub category under Monthly Bills. Also there is ATT, water, natural gas etc. since the amounts seldom vary per month by more than a few cents, I enter everyone of them at the beginning of the month. I know YNAB says not to do it that way, but I do...   I also enter the VA disability (it does come on the 1st day of the month) as income but I also add the Social Security deposits, they come on the 3rd Wednesday. YNAB says not to do these things until you actually have the income or the bill is paid, I just don't like it that way.

This way, since each month for me starts with nothing carried over, I know exactly how much money I am going to spend on non-discretionary spending.  Medical is under it's own, and that is for Medicare supplement, RXs and other medical needs, i.e aspirin etc. Any other money spent, according to my definition is discretionary spending.

I'm not sure I would leave savings until I see how much I have left, I believe the best way is to pay yourself at the beginning, that way you don't get tempted to spend money you were going to save.

on edit: Our escrow (sinking) account holds funds for:

Car repair

Dentist

IRS-quarterly tax payments

ARK  quarterly tax payment

Home Owners dues

Home insurance

Auto insurance

Umbrella insurance

Birthdays (grandkids)

Christmas (grandkids)

Winter travel

DHs gun range membership

Turbo Tax each year

Exterminator

USA Mercedes Club

I add it all up and divide by 12 and that's what I put in each month.

[Gardening Grandma]

I've been using YNAB 4 years now. It has totally changed our attitudes towards spending. DH was afraid to spend a dime and kept asking me "Can we afford this?"
With YNAB, I can show him tne numbers.  With YNAB, I don't wince when the vet recommends cleaning the dog's teeth ($600-$800)

I have 13 categories with about 35 sub categories.

While I don't disagree with Phil's parento analysis, our biggest expenditures are income taxes and healthcare premiums. Not much we can do about either. We're retired and no longer focused on acquiring wealth. We have what we have. We live on our pension/SS income and use the income from the IRA accounts for luxuries like travel.

YNAB is the tool I use to maximize the spending on the things we enjoy and minimuze spending on the low priority items.

(As we sit in our little Casita travel trailer on a beach on the Oregon coast)

ETA
For younger  folks still working/savings, I second tskeeter's list (post #16)

[stillmovingforward]

I realized my dislike of sitting down and doing a budget is due to owing money on a few bills. My intent is: when this is paid off, then I know what to budget for. I need to stop this, sit down, do a budget, and then post it here with the sacred cows noted (nope, no koi here!). That's my chore for the weekend.