Why You Need a Budget (and trust me, you do)

How to feel calm and relaxed about your budget

Budget. A word that gives few people warm and fuzzy feelings. To most of us the word budget brings up feelings of dread and discomfort.

A lot of people see budgets as something not dissimilar to a diet: it tells you what to do, which is usually something you don’t really want to do in the first place, but the end goal is good, and you feel you should. It restricts you from doing the things you want to do. It makes you feel miserable, and eventually you end up falling off the wagon, which makes you feel even more miserable. You decide you just can’t do it, give up, and have a huge face stuffing session/spending spree.

Does that sound familiar?

 

But here’s the thing – if you feel like your budget is stopping you from enjoying life rather than helping you to reach your goals, you’re doing it wrong! A budget is a friendly creature that’s there to hold your hand so that you a) can do the things you really want to do, but also b) don’t spend all your money on stupid stuff that you’re going to regret later, or that you don’t even remember buying. Budgets are cool! And I’m here to tell you that you absolutely, definitely want a budget in your life!

[tweetthis]Budgets are cool, and you absolutely, definitely want a budget in your life! #personalfinance[/tweetthis]

But for a budget to work (just like anything else in life that you may not initially feel super excited about) you need to find a system that works for you. Otherwise you’ll give up before you even have time to see the benefits of it. And we don’t want that!

So what system should you use, then?

 

In the past I would’ve handed you a spreadsheet and sent you on your way. I love spreadsheets, and I’ve got tons of really useful ones, and even though I’m very aware that not everyone shares my love for Excel, that’s what I’ve been using with my clients anyway. But now that’s changed, at least when it comes to budgeting!

You see, even I was getting swamped down by all the spreadsheets. On my monthly money date, I would have all my bank statements and my calculator at the ready, a bag of sweets within reach, and some good music playing in the background – a perfectly nice way to spend an afternoon, thank you very much! But when I had to open up Six. Different. Spreadsheets and keep track of what’s what, what goes where and which fields are meant to be copied into which sheet, even my head was spinning.

So I said to myself “No more!”, and I decided to find a solution to ease my burden. And guess what? I found one, and it’s called You Need a Budget! Because, well, you do need a budget.

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YNAB four_rules

[Disclaimer: While the links in this post are referral links, that’s not why I’m telling you about it – I’ve been successfully using YNAB for quite some time, and I was constantly telling people about it even before they created their referral programme.]

What is You Need a Budget?

 

There’s so much that can be said about this amazing app, but I’ll leave that to the experts – YNAB have a shedload of fantastic resources on their website. All I’m going to tell you just now is this:

  • The app is super simple to use
  • It works with all currencies – yay!
  • You get a browser version + apps for your smartphone and tablet, and they all sync
  • It’s super quick to enter any expenses into the app after you’ve bought something, so you don’t need to keep hold of receipts or keep downloading bank statements
  • The app helps you prepare for those bigger expenses that only occur once a year or every few months – no more worrying about how you’re suddenly going to pay that large quarterly bill you always forget about, or what to do if the fridge dies
  • YNAB also helps you reach all your savings goals and lets you keep track of debt repayments
  • It provides you with detailed reports on your spending if you want them
  • They’re really friendly and make budgeting fun – imagine that!
  • and, like I said, their website is bursting with videos, blog posts, FAQs and a forum that will answer all your questions

The software itself costs $5/month or $50/year, but they offer a free 34-day trial, so you can make sure that it’s for you before you have to part with your cash. And if you decide you don’t want to use the app, then that’s fine – you can still use their philosophy and systems in a spreadsheet or similar (it’ll just take quite a lot more work).

I know that for many people, this might seem like unnecessary spending if money is already tight, but believe me – it’s so worth it. And, like the good people of YNAB put it:

“You’ll save an average of $200 your first month. Yeah buddy. Oh, and after nine months the average YNABer saves more than $3,300. In terms of an investment, that’s a serious return. Also more control and less stress. Or think of it like this: Skip Starbucks once this month, and you’ve paid for YNAB (and cut out 450 calories).”

I haven’t kept track of how much money YNAB has saved me so far, but here are some things I’ve noticed:

  • I no longer have those moments where I see tons of money in my bank account, go out for a celebratory slap-up meal, and then the next day I can’t pay the electricity bill that the money was meant for, but I forgot it was coming. My bank account can tell me if I have money, but it won’t tell me if I can afford stuff – YNAB does!
  • I used to have to transfer money back and forth between several different bank accounts to make sure that I didn’t spend bill-money on sweets or holiday-money on clothes. It was a hassle, and it rarely worked. Now I can keep all my money in one place (i.e. my current account which pays great interest), safe in the knowledge that it will still be spent on exactly what it’s meant to be spent on.
  • I won’t forget (or “forget”) how much money I’d promised to save or put towards my debt each month, because YNAB tells me if I’ve reached my goals or not.
  • I’ve got my other half to use it as well (we can both have separate budgets in the same account), and he’s working his way towards a life where he doesn’t have to use up his entire overdraft every month.

I could go on and on about YNAB (and if you ask my friends and family, they can confirm that I do), but to share the features with you, I recommend you watch YNAB’s own, super short video about how it all works:

 

Just click here to go to their website, find out more and sign up for the 34-day trial. And if you decide to download the trial (and why on earth wouldn’t you) then I recommend having a look at their free online resources here to get the most of the app and make it easier to get started.

I promise you’ll love it!

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