You Need A Budget (YNAB) (general)

It's not a dirty word, so let's say it together -- wealth! At YNAB, we often use the words "save money," and it's a more approachable concept, something that seems achievable in the short term. Wealth can seem like such a far-off concept sometimes. But at the end of the day, that's what we're all trying to do, is to build wealth that will allow us to do more of what we want to do in life.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 451_You_Are_Building_Wealth.mp3
Category:general -- posted at: 12:00am EDT

While canning tomatoes from a bumper crop, Jesse realized the process was going to take a looooooong time. His wife advised him, simply, to "just settle in." Anything that yields great results in the future takes both upfront effort and perseverance. Whether it's gardening, putting up vegetables for the winter, or budgeting, you have to settle in.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 450_Just_Settle_In.mp3
Category:general -- posted at: 12:00am EDT

Jesse lays out a strategy for managing unknown expenses without continually dipping into your emergency fund. Traditional budgeting advice tells you to create an emergency fund for dealing with unforeseen expenses, but often people end up using their emergency funds for irregular, but foreseeable expenses -- things like new tires, new cars, A/C repair, etc. They don't happen regularly, maybe only every several years, but if you look into the future you know they are coming.

 

For YNAB'ers that are following Rule #2, Embracing Your True Expenses, these aren't true emergencies, and they are already covered in the budget. In the rare event of a true emergency that catches you off guard, Jesse recommends that rather than spending money out of your global emergency fund, set up a new category for that expense. Maybe it's a house repair that you had never encountered before. Make a new category for that type of repair, and start a new sinking fund for it like you do for other Rule #2 expenses.

 

Over time, this strategy will give you useful data about your true expenses, so that you can be more prepared for next time.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 449_Never_Spend_Your_Emergency_Fund_Again.mp3
Category:general -- posted at: 12:00am EDT

Jesse tackles the defeatist attitude some people develop that they are just no good with money. As they say, comparison is the thief of joy, and we should add, it's very misleading when it comes to money! Watching what other people do with their money isn't particularly helpful or relevant to your own situation.

Bottom line, being smart with your money simply means knowing what you want your money to do, and allowing it do that for you. This is something anyone can do!

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 448_Are_You_Just_Not_Smart_With_Money.mp3
Category:general -- posted at: 12:00am EDT

Recently someone asked Jesse about his thoughts on preventing lifestyle creep, a major supposed gremlin of budgeting. Jesse doesn't even like the question, and discusses why worrying about lifestyle creep is looking at budgeting in the wrong light.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 447_Lifestyle_Creep.mp3
Category:general -- posted at: 12:00am EDT

Recently Jesse received an email from a woman who claimed YNAB was really a program about mindfulness... just using money and budgeting as the entry point. So Jesse invited this woman onto the podcast to talk about the connection between mindfulness, meditation, and money. Welcome to Kathleen Slattery-Moschkau, a mindfulness expert, yoga instructor, and filmmaker currently residing in Madison, WI where she runs The Studio.

 

The Studio: https://www.thestudiomadison.com/about-us-2/

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 446_Mindfulness_and_Money.mp3
Category:general -- posted at: 12:00am EDT

Let's face it, it feels good to buy things. That's not necessarily a bad thing, either. Spending on hobbies or other things that bring you value -- maybe a date with your partner -- makes you feel good for a good reason.

 

However, from time to time we need to check the rationale behind our purchases. Maybe you intend to start a new exercise regime, so you buy new shoes and clothes and perhaps a new journal as well to document your progress. But have you actually started the program yet?

 

Often simply purchasing something related to your goals can make you feel like you've made progress.... when, unfortunately, that's not really the case! Jesse calls these "progress purchases," and warns you to watch out for them!

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 445_Progress_Purchases.mp3
Category:general -- posted at: 12:00am EDT

We're all familiar with the situation. A person reads a book, learns a new skill, or discovers a method, and gets REALLY INTO IT. Brimming with enthusiasm, they share it with their partner and try to get them involved, only to be met by reluctance and intransigence. The reluctant partner is a common trope, even when it comes budgeting!

 

The idea that your partner is dragging their feet because they don't share your goals about budgeting and personal finance, however, is a false one. In Jesse's and the YNAB team's experience, the reluctant partner is often simply overwhelmed. They usually want to share the goals and aspirations of their partner, and share in the process of attaining them, but the speed and intensity of the habit changes may be too much.

 

So if you're just getting into YNAB, break it gently to your partner. Talk about your goals, get on the same page about your finances, then start talking about the process of getting there. Small steps are the key to change!

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 444_The_Reluctant_Partner_Misread.mp3
Category:general -- posted at: 12:00am EDT

By popular request, Jesse flips through his office bookshelves and discusses the books he's read recently... and, well, some that he hasn't but is getting around to!

 

This week he covers books in the “business” category, ranging from marketing, advertising, management theory, team building, and customer service. Many of these books have had an influence on the way YNAB operates and its success.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 443_Books_Ive_Read_Business.mp3
Category:general -- posted at: 12:00am EDT

By popular request, Jesse scans though his office bookshelf and discusses the books he's read recently... and, well, some that he hasn't but is getting around to!

 

This week he covers books in the "general" category, basically anything that isn't specifically about business. Next week he will cover the books on his business shelf.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

 

Direct download: 442_Books_Ive_Read_The_General_Shelf.mp3
Category:general -- posted at: 12:00am EDT

Jesse interviews a YNAB'er, nurse practitioner Naseema, about how she used YNAB and the four rules to pay off an extraordinary $200k of debt in just under two years, all while going through some tough life transitions.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 441_Meet_Naseema_Nurse_on_FIRE.mp3
Category:general -- posted at: 12:00am EDT

YNAB'er Elizabeth wrote into the podcast asking for clarification of Rule Three -- can you use it too often?

 

Simply put, If you aren't reaching your goals, Jesse says, you're misusing Rule Three. If you aren't saving the money you thing you should be saving, then Rule Three has become an escape hatch for your budget, instead of an empowering tool.

 

Scarcity is a powerful motivator for budgeting. Embracing the fact that you have limited dollars, and that you cannot rob from your future self to pay unexpected expenses today, means you will have to become comfortable saying "no."

 

If you'd like to write into the show, email Jesse your questions at podcast@youneedabudget.com.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 440_The_Rule_Three_Esacpe_Hatch.mp3
Category:general -- posted at: 12:00am EDT

With everything that has transpired this year, we could all use some positive news. Today Jesse highlights a couple of positive stories from YNAB users who have managed to save money and stabilize their financial situation despite job loss and salary cuts due to COVID.

 

Follow the four rules, and things will get better. Budgeting isn't the end-all-be-all, it's not the solution for everything, but it will help you make your financial situation better. Budgeting simply works!

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 439_COVID_Conquerors.mp3
Category:general -- posted at: 12:00am EDT

In light of the terrible events that have transpired in 2020, YNAB is launching a new initiative to help those in need. YNAB is partnering with non-profit organizations that work with marginalized communities on personal financial and financial resource issues. YNAB is offering licenses for its software for free to these non-profits, so those in need can benefit from YNAB's powerful budgeting tools.

 

If you work for a non-profit or know of one who could benefit from this program, visit https://www.youneedabudget.com/good for more details and how to sign up for the program.

Direct download: 438_YNAB_for_Good.mp3
Category:general -- posted at: 12:00am EDT

Jesse wraps up the Atomic Budgeting series, based on the ideas in James Clear’s book Atomic Habits, with a look into how our environment shapes our decision making.

 

The world is awash in advertisements — billboards, store displays, TV, YouTube, etc — which aim to subtly influence us to buy products and services. It’s hard to avoid them, especially when you spend time in areas or websites where targeted ads can pique your interests and potentially cause you to buy things you otherwise wouldn’t have sought out. Even our social groups can influence our purchasing decisions. Whether your friends and neighbors are conspicuous spenders or frugal, their collective habits will become the normal behavior in your social circle.

 

So the last step in “atomic budgeting” is to be aware of your environment, and choose your friends and social circles wisely.

 

“Join a community where the normal behavior is the behavior you want.”

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 437_The_Environment_That_Shapes_You.mp3
Category:general -- posted at: 12:00am EDT

Jesse discusses James Clear's "laws" of how people make lasting changes to their behaviors and how they might apply to the YNAB'er looking to improve their budgeting habits.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 436_Four_Laws_of_Behavior_Change.mp3
Category:general -- posted at: 12:00am EDT

In the third installment of the atomic budgeting series, in which Jesse applies the principles in James Clear's book Atomic Habits to budgeting and personal finance, Jesse discusses the concept of becoming the person who has the traits you wish to have.

 

Typically when we think of making personal change, we set goals and then a process to achieve that goal. Yet, once we achieve the goal (if we do), does the change we made to achieve it continue on? Are the new habits long-lasting, or do we revert to our old ways? Too often, the latter proves true!

 

As Clear says, "every action you take is a vote for the type of person you wish to become." If you want to become a person who is smart with money, who is rarely stressed with financial concerns, and budgets with ease... then you must start identifying yourself as that type of person. Then prove it with your actions.

 

If you're a weightlifter, you lift weights. If you're a writer, you write. You cannot be the person you claim to be without doing the things that type of person does. Budgeting is no different!

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 435_Becoming_Not_Achieving.mp3
Category:general -- posted at: 12:00am EDT

Jesse continues with part two of the Atomic Budgeting series, applying the concepts in James Clear's Atomic Habits to budgeting and the pursuit of financial freedom.

 

One of the key concepts in Clear's book is focusing on building effective systems for achieving your goals, rather than on the goal itself. Goals are great things, but without a logical, replicable, and flexible system, you are unlikely to consistently achieve your goals. 

 

YNAB's Four Rules comprise a simple, flexible, and replicable system for achieving the goal of freeing up financial resources to handle unexpected events and do more of the things you want to do in life. The Four Rules don't ask you to come up with a solid number of dollars to save each month, or a percentage; rather, they ask you to follow certain processes (like giving every dollar a job) that ultimately help you achieve the goal of saving money. By staying process-focused rather than goal or number focused, YNAB allows you "roll with the punches" and adjust as your life circumstances change and unexpected expenses arise.

 

So whether it's budgeting, improving your fitness, reading books, or something else, the next time you set a goal focus your attention on your system for achieving that goal, and learn to love the process!

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 434_Atomic_Budgeting_Systems_Not_Goals.mp3
Category:general -- posted at: 12:00am EDT

Jesse has become a fan of James Clear's Atomic Habits, in which Clear explains how small changes to your habits can build up to big changes in your life. Naturally, Jesse saw how atomic habits could work for budgeting too.

 

So for the next few weeks, Jesse will be covering several aspects of "atomic budgeting," starting with the power of compounding interest.

 

Atomic Habits by James Clear:

https://www.amazon.com/Atomic-Habits-James-Clear-audiobook/dp/B07RFSSYBH/ref=sr_1_2?dchild=1&keywords=atomic+habits&qid=1592096296&sr=8-2

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 433_Atomic_Budgeting_Compound_Interest.mp3
Category:general -- posted at: 12:00am EDT

Jesse and the YNAB team are excited to announce a new service: financial wellness for businesses and their employees! For any company, big or small, YNAB will educate your employees on the most important yet often overlooked aspect of financial wellbeing… budgeting of course.

 

Financially stress-free employees are good employees. They are empowered, they have freedom to be creative in their life, and they are more productive as a result.

 

This is a FREE service for the business. You can find out more by going to:

 

https://www.youneedabudget.com/wellness/

Direct download: 432_Financial_Wellness_by_YNAB.mp3
Category:general -- posted at: 12:00am EDT

The attentive gardener notices the small things. The way plants grow, flourish, and wither on a daily basis. He knows that weeds are easily dispatched when pulled daily. The gardener plays a long game, but sees each move in detail. 

 

Budgeting is no different. The attentive budgeter notices small things, finds small efficiencies there, because she checks in often. She knows that it's easier to correct course when her budget is moving in the wrong direction, because she watches carefully and often. The daily reconciliation becomes a joy, not a chore.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 431_Daily_Reconciliation_and_Gardening.mp3
Category:general -- posted at: 12:00am EDT

It's a common refrain in times of crisis. We must do something. But inaction is, in fact, always an option. Many times, especially when it comes to finances, it is a great option! Jesse reminds us that, in light of current economic conditions, it's perfectly OK to do nothing.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 430_Doing_Nothing_Is_Something.mp3
Category:general -- posted at: 12:00am EDT

There's something growing at the Mecham household... and it's in the backyard! Jesse confesses he spent a good portion of his paternity leave preparing a garden with a handful of chicks, fruit trees, and a garden full of asparagus, cantaloupes, and other goodies.

 

As always, while exercising his green thumb Jesse was thinking about budgeting. Immediate gratification is rare in the natural world. Nearly everything worth having takes time, effort, and care to grow and develop. Chicks need to be fed and kept safe and healthy before they can grow into egg-laying hens. Fruit trees take years before they bear their first fruits. Yet these things, once harvested, can be so much more satisfying than, say, a generic carton of eggs at the store.

 

Budgeting is no exception to the rules of Nature. Good things come to those who wait, and steward their money well. But the good things are worth it.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 429_Chicken_Fruit_Trees_and_Trellises.mp3
Category:general -- posted at: 12:00am EDT

After receiving several questions about what to do with windfall money during times of economic uncertainty (like these), Jesse tackles the topic in today’s episode. As always, but especially true nowadays, cash is king!

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 428_Windfalls_and_Uncertainty.mp3
Category:general -- posted at: 12:00am EDT

Freshly returned from paternity leave, Jesse discusses how YNAB has handled the coronavirus pandemic as a company. As always, his focus and the company's focus has been on giving the best budgeting advice they can.

 

Additionally, the YNAB team has written articles exploring how people can weather the financial storm in the wake of COVID-19. You can read the blog entries here:

https://www.youneedabudget.com/blog/

 

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 427_YNAB_and_COVID-19.mp3
Category:general -- posted at: 12:00am EDT

Jesse examines how the recent panic buying of food, home goods, and other staples highlights the intrinsic value of certain things that we take for granted. When demand for historically safe assets like bonds and gold falls, yet demand for household goods like flour and toilet paper soar, it shines some light on the practical value of things. In short,  you can eat flour, but you can't eat a bar of gold!

 

In the future, Jesse encourages us to consider saving not only for future expenses and retirement, but also for some staples and basic goods for unexpected times.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 426_Chasing_Value.mp3
Category:general -- posted at: 12:00am EDT

Jesse muses on the impact the coronavirus will ultimately have on people and their habits. When society reopens, will people return to their previous habits? Or will they grow, having spent their time in isolation examining themselves and their priorities, their Rule Zero?

 

Jesse hopes that people do use this time to reflect, to re-examine their life and rediscover their priorities, and, most importantly, write down the wisdom that comes from that process!

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 425_Write_That_Gem_Down.mp3
Category:general -- posted at: 12:00am EDT

Last week Jesse discussed the importance of Rule #1, giving every dollar a job. Rule one is always important, but in uncertain times like these it takes on renewed significance. Jesse has often talked about the rule before the rule, though, the so-called Rule Zero.

 

Rule Zero is understanding what's important to you, why you're bothering to give your dollars a job in the first place. At the end of the day, to what end are you budgeting? What's the purpose?

 

In the wake of the pandemic and economic woes gripping the country, consider whether the answer to Rule Zero has become clearer to you. Perhaps in these times you can find not only the resolve to budget like you've never budgeted before, but also to clarify why you're budgeting in the first place.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 424_Rule_Zero_Morphs_Before_Your_Very_Eyes.mp3
Category:general -- posted at: 12:00am EDT

With the world at a standstill due to the COVID-19 pandemic, one thing is certain. We’ve never budgeted at a time like this!

 

Jesse offers some comforting words in this time of crisis, and reminds us to follow Rule #1: Give Every Dollar A Job. Never stop budgeting. Even if it’s only a week ahead, a day ahead, staying engaged and continually planning will give you the best chance to survive financially in these times, and, eventually, thrive. Budgeting is one area of our lives that we can control, in the midst of so many things we cannot.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 423_Youve_Never_Budgeted_At_A_Time_Like_This.mp3
Category:general -- posted at: 12:00am EDT

At YNAB there is a document called the Vision Doc, which spells out the “commander’s intent” for the company, how to behave and act on the company’s behalf. Employees must make many decisions on a day to day basis, but with a clear commander’s intent they have the freedom to make those smaller decisions while adhering to the company’s greater goal.

 

It’s useful to develop the same commander’s intent for your budget. With a clear goal and aim for the budget, it becomes easier to make those small, day to day money decisions that, as we know, can add up to big dollars over the course of a year!

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 422_The_Commanders_Intent.mp3
Category:general -- posted at: 12:00am EDT

Jesse reads an excerpt from the book The End of Average by Todd Rose. In the late 1940's the Air Force had a dangerous problem on its hands -- aircraft of all kinds were malfunctioning and crashing at alarming rates. The Air Force brought in scientist  Lt Gilbert S Daniels to diagnose the problem. Daniels discovered that the Air Force had designed cockpits based on thousands of physical measurements taken from its ranks of pilots, then averaged. Daniels ascertained that despite the rigor and breadth of the measurements, not a single active pilot in the Air Force actually matched up with all the averages. In short, the Air Force had designed their planes around an average pilot that didn't actually exist, causing pilots to have trouble controlling their planes.

 

We can take a lesson from Lt. Daniels discovery when it comes to our budgets. It's tempting to come up with an average for each line item, and compare your budget to someone else's or perhaps even a regional or national "average." Designing your budget around averages may not actually fit your life, and, going back to Episode 420, may leave your budget rigid and inflexible.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 421_Dont_Be_Average.mp3
Category:general -- posted at: 12:00am EDT

We often talk about the budget as if it’s a noun. Is it “in the budget”? Did you check the budget? When you treat the budget as a noun it takes on a rigid, inflexible quality, like the budget is set on stone tablets.

 

But what if we thought about “budget” as a verb? As an action, an activity, budgeting becomes a process, a thing which can change and evolve with each iteration.

 

Jesse discusses the importance of budgeting and not just setting a “budget.” Thanks to Hannah who shared this revelation in her video My 5 YNAB Beginner Mistakes on the YNAB YouTube Channel.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

 

Direct download: 420_Budget_No_Budget.mp3
Category:general -- posted at: 12:00am EDT

Money is made to spend. We all want something, and that something usually costs money. Some of the “wants” are fleeting desires, spurred by mood or peer pressure or perhaps just a whim. Other “wants” are genuine desires and items or experiences that actually add value to your life.

 

Whichever it is, Jesse argues that you should wait. Wait before you buy anything, even the genuine wants. For one thing, waiting helps you parse out the genuine from the ephemeral.

 

Jesse keeps a running list of wants on his phone. If he wants something, he adds it to the list rather than buying it right away. If he still wants it when he checks the list again later, he buys it. Many times, however, he will find things on the list that he hasn’t thought about in a while, and that he really doesn’t want. So the list can act as a simple filter and a sanity check for purchases.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

 

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Direct download: 419_Wait.mp3
Category:general -- posted at: 12:00am EDT

There's a cliche in TV and film whenever something bad happens in a crowd of people, inevitably someone in the crowd shouts "why doesn't someone do something!" This is usually the cue for the superhero to enter stage right. We hear this sentiment all the time, not just in bad cinema, but in real life. Anytime a problem reaches a level of widespread concern -- whether it's a local neighborhood issue or a national one -- something must be done about it.

 

Some problems have no easy answers, and we often forget that inaction is a valid response. The same goes for our budgets! Not every budget problem can be solved right now. Sometimes you don't have the right information, or enough of it, to fix every issue in your budget. That's OK. Sometimes your budget is working just fine, and there's no reason to tinker with it. That's OK too. Don't fix it if it ain't broke!

 

Whatever your situation, remember doing nothing is still doing something.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

 

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

 

Direct download: 418_Doing_Nothing_Is_Something.mp3
Category:general -- posted at: 12:00am EDT

They are prepared for emergencies, for setbacks, for unexpected life changes. In fact emergencies don’t seem to happen as often to them. YNAB’ers are a lucky set, it seems, but maybe there’s more to the truth than a roll of the dice.

 

Survivorship bias is a logical fallacy in which you focus on a group of people or things that made it past a selection process, without considering those that failed. This bias can lead to a number of erroneous conclusions. In finance, survivorship bias occurs when evaluating the returns of, say, companies in a certain sector of the economy. If you only look at current technology firms, you might look at the technology sector and determine that it radically outperforms the market… but those same returns may look very different if you consider all the technology firms within the same time period that went bankrupt.

 

Survivorship bias appears everywhere in life, and YNAB’ers are no exception. At first glance it may seem like those in good financial health just didn’t have the same number of setbacks that those in poor financial health did. But maybe it’s not just luck. Maybe those with good financial health stay that way because they budget responsibly.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

 

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Direct download: 417_Budgeting_for_Lady_Luck.mp3
Category:general -- posted at: 12:00am EDT

In episode 411, Jesse decried the ubiquity of credit cards and the fact that they enjoy a number of benefits that plain old debit cards do not... at the risk of getting yourself in debt. Since then, he's learned of a few strategies for managing fraud risk with debit cards.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

 

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Direct download: 416_Opting_Out_of_Credit_Cards_A_Bit.mp3
Category:general -- posted at: 12:00am EDT

Jesse admits he's got an itch to scratch. He likes to invest gamble in the stock market from time to time, using an app that allows him to trade at the swipe of a finger.

 

At least he's honest -- it's gambling with fun money, not investing. And that's the key. It's money he can afford to lose, and it's not much.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

 

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Direct download: 415_Scratching_the_Gambling_Itch.mp3
Category:general -- posted at: 12:00am EDT

Wealth is not a dirty word. After all, wealth can allow us to do many interesting and fulfilling things with our lives. At the very least, it provides options, opening up the range of possibilities before us. Simply put, wealth can allow us to live the life we want to live.

 

The only problem is that the accumulation of wealth is often followed by increasing expenses. Some of these are obvious -- a bigger, newer house usually costs more than a smaller, older one -- while others are insidious. A larger house requires more energy to heat and cool, more time and effort to clean and landscape, and more things to fill it up. That's just one example. We could say the same about cars!

 

Left unchecked, these growing expenses can once again eat into our wealth, robbing us of the optionality of wealth. As Thoreau once wrote, "he who owns little is little owned."

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

 

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Direct download: 414_Optionality__Managing_Fixed_Expenses.mp3
Category:general -- posted at: 12:00am EDT

Save money for known future expenses, or pay down debt? It's a challenge many people face while trying to eliminate their debt. It's a conundrum too -- you could take your savings and pay down debt now, or hold onto to those savings for the new tires you know your car needs next month, or the Christmas gifts you want to buy for the family. If you do that, though, the debt balance stays the same while you continue to pay interest...

 

Jesse argues that optionality is the key here. Obeying rule #2 -- embracing your true expenses -- means setting aside money for those known expenses and eventualities in your life. It's tempting to pay down as much debt as you can now, but setting aside cash for your true expenses gives you options.

 

What if your true expenses are bigger than you anticipated? What if you get hit with unexpected expenses on top of that? If you've set aside the cash, you are in a position to handle those expenses when they come. If you've already used the cash to pay down debt, then you won't have any to cover unexpected expenses. This makes you much more likely to put those on the credit card and then... now you are in debt again.

 

Jesse often meets people whose finances look like their diets -- they yoyo in and out of debt constantly. It's a mentally and emotionally draining prospect. But by giving yourself options, you can have it both ways. You can prepare to pay your true expenses in the future AND pay down debt. And you'll be more likely to stay out of debt, which is the ultimate goal!

 

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

 

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Direct download: 413_Optionality_Rule_Two_Instead_of_Debt_Paydown.mp3
Category:general -- posted at: 12:00am EDT

Jesse reflects on a Senate bill -- now signed into law as the Setting Every Community Up for Retirement Enhancement (SECURE) Act -- which will require a greater amount of employers to offer 401(k) plans to employees. The new law also makes it easier for annuities to be included in 401(k) offerings by easing the fiduciary rules around fees and expense ratios.

 

401k) plans are excellent vehicles for saving for retirement because they allow employees to put away a lot of money every year -- up to $19,500 in 2020. Some employers offer matching on 401(k) contributions, further boosting savings rates.

 

However, the inclusion of more annuities in 401(k) plans has a darker motivation. Annuities typically charge higher fees than mutual funds and index funds -- sometimes a percentage point or more -- making them an inefficient and expensive way to save for retirement for most people. On the other hand, they are very profitable for insurance companies! Not surprisingly, insurance companies lobbied hard for the relaxation of fiduciary rules in the SECURE Act.

 

Just like Jesse discussed in last week's episode #411, wherever there are incentives, there are people making money. The wise investor follows the money!

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

 

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Direct download: 412_Incentives_and_Your_401k.mp3
Category:general -- posted at: 12:00am EDT

For better or worse (probably worse), credit cards are a major part of our financial world now. Cash is becoming less and less convenient to use every year, and debit cards continue to lack the same level of fraud protection that credit cards enjoy.

 

This isn't coincidence either. Jesse attended a "payments trends" conference in 2019, where the main topic was how to make payments easier, to remove as much friction as possible from the process of buying things. Why? Simply put, when you spend more money, more often, payment vendors make more money.

 

The problem is, you can't win the credit card game. Not only do payment vendors make money when you spend, the banks that underwrite credit card debt know (because they have studied human behavior) that when you swipe a credit card, you tend to spend more money. Credit card points and rewards are carefully designed to entice you to spend more money, because banks know that you will likely carry higher debt levels with a credit card.

 

So if you can't win the game, maybe the solution is just to opt out.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

 

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Direct download: 411_Opting_Out_of_the_Credit_Card_Game.mp3
Category:general -- posted at: 12:00am EDT

It's time to blow it all up! Every January, Jesse takes time with his family to "blow up" his budget and all the assumptions that drive it. He takes a fresh look at the dollars in the budget, and starts to question everything.

 

Need to set aside $400 for a new set of tires in March? That's a responsible Rule #2 line of thinking. But the burndown is your chance to think deeper... do we even need a car? Could we sell it and ride our bikes to work instead?

 

This is your time to think big, re-evaluate your priorities and life goals, and then question everything about your money. Nothing should be off the table at this point, because you're just talking. In the process, you may discover that your priorities have shifted, and it's time to take some new steps with your budget.  

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

 

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Direct download: 410_January_Burndown_2020.mp3
Category:general -- posted at: 12:00am EDT

If you made it through the last few weeks, you know why Jesse hates debt and why you should too!

 

Start the New Year by putting those feelings into action. Jesse has created a "debt bootcamp" for YNAB users to help you get serious about getting rid of your debt for good. Best of all, it's FREE for all YNAB software subscribers.

 

The Debt Bootcamp will be an intense, 8-week challenge to get rid of as much debt as possible. The camp will be run through a private Facebook group where you can stay accountable with other YNAB'ers and share your successes and challenges.

 

Go to https://www.youneedabudget.com/bootcamp/ to sign up now!

 

 

Direct download: 409_YNAB_Debt_Bootcamp.mp3
Category:general -- posted at: 12:00am EDT

The corporations are playing a game, and you can't win. So opt out and stop playing the game! In the part 4 of the "Why I Hate Debt" miniseries, Jesse explains how behind every credit card is a clever system of points, travel miles, and other "free" rewards designed to keep you spending and in debt.

 

Credit cards are a very profitable industry. Would banks and finance companies be giving away rewards if they weren't making a profit from it? Of course not! They've got the data, they've studied the statistics, and they know people will drive themselves into debt, where they can rack up fees and interest.

 

So join Jesse, stop playing the game, and start hating debt!

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 408_Why_I_Hate_Debt_Pt4_Corporations.mp3
Category:general -- posted at: 12:00am EDT

Jesse hates debt, and you should too! In Part 3 of anti-debt miniseries, Jesse argues that debt is not just a drain on our cash flow and creativity, it also restricts our future opportunities!

 

The burden of debt keeps us from realizing our full potential in many ways -- starting a business, taking a lower paying job for more fulfilling work, moving to a new state or country -- often in the early phases of life when we are most energetic and open to growth.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 407_Why_I_Hate_Debt_Pt3_Cost_of_Opportunity.mp3
Category:general -- posted at: 12:00am EDT

In Part 2 of the Why I Hate Debt miniseries, Jesse explains why debt is a non-negotiable for him, and why is should be for you too.

 

At 22 years old, trying to finish his Masters degree and expecting his first child, Jesse found himself caught between two non-negotiables: 1.) Living without debt, and 2.) Allowing his wife to quit work to focus on raising their child. The problem? They didn’t have enough money to last until Jesse started working his new job after graduation, even living a very frugal existence.

 

At this point, it would have been so easy to simply sign for a student loan to cover the shortfall. It was only about $7,000. Other students around him were borrowing far more. The interest rates were low, the payback period would be short… debt was the easy way out.

 

But choosing to borrow would have blinded Jesse to the possibility of another solution, another way to make up the shortfall. The constraints of his non-negotiables led him to start selling his budgeting spreadsheet, which eventually turned into You Need A Budget.

 

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Direct download: 406_Why_I_Hate_Debt_Pt2_Constraints.mp3
Category:general -- posted at: 12:00am EDT

Jesse hates debt, and you should too. Debt service constricts our cash flow, limits out ability to do other things like savings and investing, and generally introduces more stress into our lives. In this first part of a mini-series on debt, Jesse makes a case for living completely debt-free.

 

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Direct download: 405_Why_I_Hate_Debt_Cash.mp3
Category:general -- posted at: 12:00am EDT

Some of you may be thinking, YNAB sounds great, but what if I don't get a regular paycheck? How am I supposed to budget with that?

Well, first off, you definitely need a budget! Planning to fund your expenses in future months becomes more critical the more variable your income is.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 404_Handling_Wildly_Variable_Income.mp3
Category:general -- posted at: 12:00am EDT

Jesse is thinking about launching a separate podcast to discuss small business, internet marketing, and how you can use YNAB to manage your business cash flow, and he wants to know what you think!

 

Would you be interested in a business-focused podcast? What kind of topics would you like to hear about?

 

Email Jesse at podcast@youneedabudget.com and share your thoughts!

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 403_A_Business_Podcast.mp3
Category:general -- posted at: 12:00am EDT

Jesse asks the most important question about your reasons for getting out of debt, saving money, and achieving your financial goals. Why?

 

Why do you do it? What's the reason behind the goals? If you could write a mission statement for your life, what would it say? Answering the simple question "Why?" might be the most important thing you do after you complete the blocking and tackling of paying off debt and building an emergency fund.

 

Sign up for a free 34-day trial of YNAB at www.youneedabudget.com

Direct download: 402_Why.mp3
Category:general -- posted at: 12:00am EDT

"FI" is an acronym that has steadily grown in popularity over the last decade, though the concept is much older than that. It stands for financial independence -- some people call it early retirement (the longer acronym FIRE stands for financial independence, retire early) -- but the idea is simple. Live below your means, drastically increase your savings rate and accumulate enough wealth to "retire" or perhaps better said, until you can do what you want to do.

 

Time and savings rate are the key components of financial independence. What if you could save half of everything you make? What if you started doing that from the beginning? Jesse shares some lessons he's trying to instill in his kids as they take their first steps toward financial independence.

 

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Direct download: 401_Sowing_the_Seeds_of_FI.mp3
Category:general -- posted at: 12:00am EDT

It's common to set milestones for paying down debt. They're usually big, round numbers like $500, $1k, $5k, $10k. At the end of the day though, the goals are arbitrary. It's just a number, a stepping stone, toward the greater goal.

 

So if the day to day grind of fiscal responsibility is getting to you, change your milestones! Maybe it's $749, or $362.54. It's all arbitrary, right? Have fun with the game, and make it work for you. Set a new milestone -- whatever you like -- and celebrate when you reach that new number.

 

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Direct download: 400_Arbitrary_Milestones.mp3
Category:general -- posted at: 12:00am EDT

How do you order your categories? What's on top? What's on bottom? And how did you decide that?

 

Categories are easy to order once you understand your priorities. Rent, utilities, food -- these are non-negotiable. You can and should, however, drill down into the details of each category and ask yourself whether you could live without some of the expenses in that category. You need utilities to live, clearly, but if pushed, what would you keep and what would you cut? Could you live without internet if you had to?

 

Once you understand which categories sit above the line (necessities) and which sit below the line, then you can total up how much you spend on "below the line" items. Then ask yourself: do you want any of this money to go to above the line items?

 

Try this exercise to clarify your budget and see whether your budget is in line with your priorities.

 

 

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Direct download: 399_Categories_Below_the_Line.mp3
Category:general -- posted at: 12:00am EDT

Why do we become desensitized to the upticks in price of just about everything?

 

 

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Direct download: YNAB_398_TJ_master_v1.mp3
Category:general -- posted at: 9:29am EDT

"We could spend less if we wanted to."

 

 

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Direct download: 397_-_Sure_We_Could_If_We_Had_To.mp3
Category:general -- posted at: 12:00am EDT

New feature alert: two factor authentication

 

 

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Direct download: 396_-_2FA_FTW.mp3
Category:general -- posted at: 12:00am EDT

Everyone is getting into the lending money game.



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Direct download: 395_-_Everyones_a_Lender.mp3
Category:general -- posted at: 12:00am EDT

Jesse discusses payroll advance apps.

 

 

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Direct download: 394_-_Payday_Lender_Apps.mp3
Category:general -- posted at: 12:00am EDT

Jesse discusses payroll advances in relation to age of money.

 

 

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Direct download: 393_-_Fixing_the_Paycheck_to_Paycheck_Cycle.mp3
Category:general -- posted at: 12:00am EDT

Jesse goes back to basics and breaks down YNAB's Rule Four: Age Your Money

 

 

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Direct download: 392_-_Rule_Four_and_Waistlines.mp3
Category:general -- posted at: 12:00am EDT

Jesse goes back to basics and breaks down YNAB's Rule Three: Roll With The Punches

 

 

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Direct download: 391_-_Rule_Three_is_War.mp3
Category:general -- posted at: 12:00am EDT

Jesse goes back to basics and breaks down YNAB's Rule Two: Embrace Your True Expenses



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Direct download: 390_-_Rule_Two_Broken_Down.mp3
Category:general -- posted at: 12:00am EDT

Jesse goes back to basics and breaks down YNAB's Rule One: Give Every Dollar A Job.


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Direct download: 389_-_Rule_One_Broken_Down.mp3
Category:general -- posted at: 12:00am EDT

How do we curb the immediacy bias with DIY?

 

 

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Direct download: 388_-_DIY_FTW.mp3
Category:general -- posted at: 12:00am EDT

How many dollars are you sending to your retirement fund?


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Direct download: 387_-_Singular_Focus_on_the_Shovel_and_its_Size.mp3
Category:general -- posted at: 12:00am EDT

Jesse reviews the automated investing app, Acorns.


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Direct download: 386_-_Testing_Rounding_Up.mp3
Category:general -- posted at: 12:00am EDT

The rock solid measure of whether or not you're succeeding



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Direct download: 385_-_Is_it_Going_Up.mp3
Category:general -- posted at: 12:00am EDT

Jesse takes issue with a phrase we use when it comes to spending money on children.


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Direct download: 384_-_Its_for_the_Children.mp3
Category:general -- posted at: 12:00am EDT

Jesse interview's authors and married couple Kristy Shen, Bryce Leung about their book—available today—Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required.




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Direct download: YNAB_Podcast_Kristy_Shen_and_Bryce_Leung_Interview.mp3
Category:general -- posted at: 12:00am EDT

One simple question—should you start your budget over?


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Direct download: 383_-_Should_You_Start_Over.mp3
Category:general -- posted at: 12:00am EDT

A follow up to episode 331, Sacreligious Budgeting.


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Direct download: 382_-_The_Clothing_Credit_Card_Experiment.mp3
Category:general -- posted at: 12:00am EDT

Data and the ideal budget.

 

 

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Direct download: 381_-_The_Ideal_Budget.mp3
Category:general -- posted at: 12:00am EDT

A follow up to episode to 365 on manually entering transactions.


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Direct download: 380_-_A_Report_on_Manual_Entry.mp3
Category:general -- posted at: 12:00am EDT

How is a budget like strength training?


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Direct download: 379_-_Bulking_and_Cutting.mp3
Category:general -- posted at: 12:00am EDT

There are two sides to every slice of cheese.



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Direct download: 378_-_A_Thin_Slice_of_Cheese.mp3
Category:general -- posted at: 12:00am EDT

Simple benchmarks for budgeting progress


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Direct download: 377_-_Thats_Progress.mp3
Category:general -- posted at: 12:00am EDT

A road trip, a Tesla and a story about Mr. Money Mustache



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Direct download: 376_-_Is_Wanting_It_Enough.mp3
Category:general -- posted at: 12:00am EDT

Jesse interview's author Ramit Sethi about the update of his 10 year old book, I Will Teach You To Be Rich.



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Direct download: YNAB_Podcast_Ramit_SethI_Interview.mp3
Category:general -- posted at: 12:00am EDT

Ladies and gentlemen, as we start this episode, please make sure your seat backs and tray tables are in their full upright position



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Direct download: 375_-_Oxygen_Masks.mp3
Category:general -- posted at: 12:00am EDT

Stand up for your nonnegotiables.



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Direct download: 374_-_A_Rock_and_a_Hard_Place.mp3
Category:general -- posted at: 12:00am EDT

Tips for getting over the hurdle of learning to budget.

 

 

 

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Direct download: 373_-_Its_Just_Not_Working.mp3
Category:general -- posted at: 12:00am EDT

A simple look at the approach to investing vs budgeting




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Direct download: 372_-_Investing_vs_Budgeting.mp3
Category:general -- posted at: 12:00am EDT

The upside to renting.


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Direct download: 371_-_Renting_a_House_is_Awesome.mp3
Category:general -- posted at: 12:00am EDT

How is a budget like swearing?



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Direct download: 370_-_Dropping_Swears.mp3
Category:general -- posted at: 12:00am EDT

We're introducing a new service!


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Direct download: 369_-_The_Power_of_Pencil_and_Paper.mp3
Category:general -- posted at: 12:00am EDT

A message for the budgeting nerds


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Check out our book! - www.ynab.com/book

 

 

Direct download: 368_-_Hey_Nerd_Chill.mp3
Category:general -- posted at: 12:00am EDT

Jonathan and Miranda were college sweethearts with $52k in student loans. This is the story of how they paid it all off in just 21 months … and started their family.

Direct download: Debt_Stories_Ep_13_001.mp3
Category:general -- posted at: 8:00am EDT

A message for the free spirit budgeter

 

 

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Direct download: 367_-_Hey_Free_Spirit_Heres_a_Calculator.mp3
Category:general -- posted at: 12:00am EDT

A little behind the scenes at YNAB and Jesse asks listeners a favor

 

 

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Direct download: 366_-_Financial_Wellness_by_YNAB.mp3
Category:general -- posted at: 12:00am EDT

When Tanya and her husband became parents for the first time, suddenly their financial priorities clicked into place—and, within just 12 months, they’d paid off $31,000 of debt so that they could truly enjoy life with their new son.

Direct download: Debt_Stories_Ep_12_001.mp3
Category:general -- posted at: 8:00am EDT

Taking another stab at entering transactions one at a time the old fashioned way.



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Direct download: 365_-_Manual_Entry_Take_Two.mp3
Category:general -- posted at: 12:00am EDT

Stash some cash

 

 

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Direct download: 364_-_Cash_is_a_King_in_Hiding.mp3
Category:general -- posted at: 12:00am EDT

Siobhan came to YNAB looking for a solution to her debt—$60k+ in student loans and $16k+ in credit card debt. Flash forward, and she’s on track to pay the last $30k off by next year. What a difference a couple of years can make!

Direct download: Debt_Stories_Ep_11_001.mp3
Category:general -- posted at: 8:00am EDT

This is a tinfoil PSA ... perhaps


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Direct download: 363_-_The_Allure_of_Plastic.mp3
Category:general -- posted at: 8:00am EDT

Day-old money is stressful!




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Direct download: 362_-_Age_of_Money_When_it_Just_Keeps_Climbing.mp3
Category:general -- posted at: 8:00am EDT

Erin thought that she’d never be able to retire, much less do it comfortably on half of the amount than she previously thought ... but then she found YNAB.

Direct download: Debt_Stories_Ep_10_001.mp3
Category:general -- posted at: 8:00am EDT

How is a budget like a college football game?


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Direct download: 361_-_Rule_Three_and_Alabama_Football_a_little.mp3
Category:general -- posted at: 8:00am EDT

How is a budget like a visit from the in-laws?



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Direct download: 360_-_Rule_Two_the_In-Laws_are_Coming.mp3
Category:general -- posted at: 8:00am EDT

How is a budget like a clock?



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Direct download: 359_-_Rule_One_in_an_Afternoon.mp3
Category:general -- posted at: 8:00am EDT

Jesse gets back to basic budgeting talk with a discussion on priorities.

 

 

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Direct download: 358_-_Priorities_Priorities_Priorities.mp3
Category:general -- posted at: 8:00am EDT