Since my YNAB reboot earlier this year to get my finances under control, I’m here to report that I’m still trying to get my budget under control.
This is not a failing of YNAB, but simply poor planning on my end. When the mister moved out here in March, I had to get his room ready; I had to purchase a new bedding set, a lamp and a few other items. I was on a time crunch so I charged everything before having the money saved up to pay for them, which is what YNAB tries to get us to do. Also, instead of moving money around to cover the unexpected expenses, I just kept trucking along, quietly digging myself into a financial hole. It took a couple of months to dig myself out of that hole and only after nearly draining my savings account, which in retrospect was a BAD idea.
After that, I continued to spend without reallocating my budgeted dollars. Now that the mister was here, we started to go out a lot more than I was used to doing (read: rarely). We would go to the movies, pick up dinner, or I would purchase items that I hadn’t anticipated buying nor adjusted the budget for and the debt snowballed. It didn’t help that I had started thinking being flexible with the budget was okay; it is but not the way I was flexing. Budgets are a living, breathing thing but they’re not going to be helpful if you continue to overspend and not make any adjustments to cover those expenses.
So here I am back to working my way out of another monetary hole but I have a clearer plan for escaping and not returning. I’m putting money towards my debt and am starting to see the numbers go down (yes, I have added to it in the mean time but it’s all getting paid!). And while I try to not spend on unbudgeted items, I don’t make myself a prisoner to my budget and have simply reallocated money when necessary. Adding to this was a series of blog post on the YNAB blog this past week discussing savings goals and that encouraged to me actually come up with some tangible goals to work towards that actually has me excited about budgeting again:
Short Term Goals:
- Pay down all credit card debt. I’m currently have just over $1,500 worth of credit card debt over two cards. While it’s probably the most I’ve had on a credit card since my internship year in San Jose, I’m already well on my way to paying off one of my cards completely (that will probably be paid off by the end of September). I’m shooting to have this debt paid off by December.
- Build a one-month buffer. This is the main goal of YNAB (and rule number 4), living off last month’s income. I haven’t been able to get there just yet but I’m determined to make it happen before the end of year. I plan on setting aside some money (even if it’s just $10) with each paycheck to help me get to this goal.
- Save for the wedding. Yes, a wedding is happening sooner than later (more details to follow) and while we have a very nice cushion to start, we still need a few more dollars to meet our new budget. Plus, I’d like to go on a nice honeymoon, all of which cost money.
- Save for our apartment. While we’re currently staying with my mom, I know we can’t stay with her forever (though she wouldn’t mind). Once the mister lands his job, we’ll be on the hunt for our first place so we’ll need the funds for the deposit, moving costs, and furniture.
Medium Term Goals:
- Create an emergency fund. I started saving for my emergency fund last year but ran into some difficulty but I’m ready to start again. I’d like to have at least $6,000 for emergencies.
Long Term Goals:
- Pay off student loans. This is going to take some time but I’m hopeful that I will be able to get these paid off in 10 years. Wow, 10 years sounds like a really long time.
- Save for retirement. I’m in my 30s so this is a great time I really need to get going with this. I already have a Roth IRA set up and have rolled over my 401k from my old job so we’ve got something going. I would like to increase my contributions though and while I won’t benefit from the tax breaks, at least I know I’ll be able to withdraw my cash tax-free later in life.
- Save for down payment. While home ownership in the Bay Area isn’t impossible, it definitely isn’t as easy as it could be in just about any other place. I’m sure we’ll be able to find a house we both love in the area that will fit our needs but we will need a down payment. 20% is the gold standard so we’ll see how we do.
While I know this isn’t going to be some quick fix, I’m looking for a sustainable transition and a healthier financial outlook. I know there will be times when I see something I just must have that I hadn’t budgeted for, but I won’t feel constrained by my budget. If it’s important, then I’ll be willing to move the money around so I can get it. If I’m not willing to do that, then on the shelf it shall stay until I’m willing to make those adjustments. I’m simply trying to set myself up for a stronger financial life, not only for myself, but also for my family. If I can create healthy money habits now, it’ll be easier to teach my kids to follow in my footsteps in the future.