At the end of 2014 I owed about $8000 on a car loan and was struggling to pay all my bills monthly. Today, with no huge change in income, I have paid off the car, paid almost $5000 extra principal on my mortgage, and never struggle with money. As a matter of fact, I often tell my husband “we are standing under a money waterfall”. What changed?
I heard somewhere about YNAB, which stands for “you need a budget”. Let me guess, your first thought is “that sounds boring,” right? Well, standing under the money waterfall isn’t boring at all!
YNAB is a simple to use tool that makes budgeting and tracking your spending a breeze. It lets you import transactions from all your bank accounts, and tells you know exactly where your money is going. If I can do it, anyone can – believe me. I am quite math challenged, but I found it easy to understand and use. I spend about 15 minutes twice a week catching up, and now I find I have plenty of money.
They say anything you track will improve. For example, if you record everything you eat, you’ll often find you eat much less than usual. I found this to be absolutely true with money. I began paying attention on Jan. 1, 2014, and it was easy to make good choices, curb impulse spending, stop eating out so much.
Where did I find the biggest savings? I tried to focus on one thing at a time, and picked the low hanging fruit first. Restaurants were the first thing to go. I began cooking at home almost daily, and simplified meals considerably. This saved money, time and work! Yay!
Utility costs were next. I installed LED bulbs to replace incandescent and halogen lights everywhere. My electric and water are billed together. We went from monthly budget payments of $139 to $79. That is a 43% decrease, I was amazed!
I began reading blogs about frugality and early retirement. My favorite is Mr. Money Mustache. His blog is stuffed with information about how to live frugally and be happier than ever. I can honestly say I’m happier now than I was before I started reading his blog. His tagline is “Early Retirement Through Badassity”. Don’t read this blog if swearing bothers you, but I find the judicious and creative use of swearing enhances my reading. I recommend you read all his posts from the beginning of time. It will take you a while, but you will be transformed by his writing. You don’t have a deadline so go slowly and savor it. Take what works for you and leave the rest, don’t get hung up on stuff that you can’t see working in your own life. Just take the juicy bits that apply to you. Read the comments. You’ll get so many ideas and information on how to make your money work to make you rich(er).
Next, I bought a Nest thermostat. I turned my thermostat down at night, now I wear adequate clothes in the house instead of turning up the heat automatically. I monitor each day’s energy use, it takes less than a minute. My gas company tells me I’m among the most efficient customers.
This all led to a cascade of changes – I’ll write more about those in a future blog post.
I estimate that I’ve saved literally 100 times the $60 cost of the software since I bought it. This is in mortgage and car payment interest, money spent on stupid impulse buys and restaurants, and other little leaks that all add up. I will pay my house off about 4 years early (10 year mortgage). I have no trouble paying big expenses, like semi-annual property taxes. I save for nice vacations. We may buy some rental properties once the mortgage is paid off.
YNAB has great customer support and training, not just on using the software, but on the way you think about money and use it. It will absolutely change the way your financial affairs play out. You’ll be able to plan for big expenses, and never scramble to pay for emergencies like unforeseen car repairs again. Because car repairs aren’t really a surprise, are they? We all know a car will eventually need some kind of work – YNAB helps you prepare for such “emergencies”, which aren’t really emergencies at all. And if you do have a true emergency, wouldn’t it be nice if your financial affairs were not in a big snarl? Who needs that on top of everything else?
Would you like to try YNAB for yourself? Here’s a code for $6 off your purchase. Disclosure: This is a referral link, if you purchase YNAB through this link you’ll save $6 (10%) on the purchase and I will make $6. It’s a win-win.
I hope you’ll try YNAB if you are struggling to manage your money. I’d love to hear from any current or new users in the comments.