"Off-Method"

I have been YNABing since 2016 and I just want to be transparent: it took me years to really use YNAB to its full potential because I wasn’t using it correctly. At YNAB they are nice and just call that “off-method” but let’s be real, I wasn’t doing it right. I was:

• Forecasting
• Only tracking spending
• Refusing to embrace my true expenses
• Overfunding some things
• Not funding the things that were important to us

The Failure of Forecasting

The number one thing I did that was “off-method” was I forecasted. A lot. Forecasting is budgeting with money you don't actually have now (but might one day). I think it's particularly tempting for variable income earners because we want to have a sense of control. The truth is, you can control they money you have now. You cannot control the money that you currently do not have. The end.

I would take some time, set up all my targets, give myself a fake anticipated paycheck, and get really excited about what it would be like if we could perfectly fund all these categories to their full potential each month. Then I would look at the “cost to be me” (the total of the monthly targets), die a little inside, and work my butt off to try to make sure we made that much money. Because I had to, right? I was basically prioritizing our finances over my mental health and it took years some time to finally get myself to realize that money isn’t everything. It’s helpful, it’s important, and it’s fairly necessary unless you are very skilled in bartering, but it’s not everything. Your plan should serve your family, not the other way around.

Find the Money First

I also used YNAB primarily for tracking spending, instead of being proactive about my decision making. I would know I didn’t have $42 for the beautiful woven baskets that perfectly fit my shelves but I would spend the money anyway, knowing I could just move money around later. And then I would raid some category that I cared less about to cover the overspending.

Let me be clear: one of the best things about YNAB is its flexibility, and that has helped me have a much healthier relationship with money. Life doesn’t always go as planned, and our budget must be able to roll with the punches when life beats us up a little bit.

But this is different - woven baskets are hardly ever an emergency situation. What I strive to do now is cover the overspending before it happens. We call this "Find the Money First".

There has been a time or two when I’ve gone to "find the money first" and realized it wasn’t worth it. For example, the other day I really didn’t want to make dinner. We had almost enough money in our 🍔Dining Out category, and then I realized that I actually didn’t want to use that money in that way. We raided our freezer instead and had leftovers had an “Options Night”. Similarly, there was a recent evening after an awful night of sleep and stressful day, and Panda Express was an absolute necessity and I made sure our 🍔Dining Out category was ready to help us survive dinner.

Flower Funds and True Expenses

Another thing is I honestly still struggle to “embrace our true expenses”. This means that if there is actually something you spend money on in real life, then that needs to be reflected in your plan. Your plan should always reflect real life. For example, I still have yet to embrace the “true expense” that we buy flowers. Every year. Without fail. There's some day in April or May when it's gorgeous outside, we look at our weedy garden, and get inspired to go to the store and stock up on spring sprouts.

And yet I still don’t have a 🌸Flower Fund category in our budget, and I honestly cannot tell you why. Might bring it up in therapy one day. Come back to that later.

Put the Personal in Personal Finance

Ironically, while I underfund (or neglect to fund) sometimes, I also have a tendency to overfund some things based on what “the Googles” tells me. An outside source tells me I should be spending 2-5% of my income on clothing, so that’s what I plan for our clothing. But honestly? We just don’t care about clothes that much. We don’t need to spend 2-5% of our income on clothes because this isn’t a priority for us. But I bet there are some of you out there who might happily spend that much of your income on clothes and that’s okay. If that is where your priority is in real life, it deserves a priority place in your plan and deserves funding. It took me a long time to realize that our "Clothes" dollars could better be used somewhere else (like a 🌸Flower Fund maybe…).

Plan for Your Priorities

And lastly, one of the things I’ve struggled to do well is make sure we’re funding our dreams and goals. We have been talking about going camping with our kids a few times a year and finally just the other day I made a ⛺Camping category. Still doesn’t have money in it yet, but... baby steps. 

People say there's a method to the madness, and I just want to say: there is no madness to the YNAB method. It's pure genius. It is such a healthy way to view money. It helps you get your priorities straight, see the reality of your financial situation, and feel more confident with your financial decisions. So learn from my mistakes and schedule a call so we can get you set up with a plan that works for you (and make sure your ⛺Camping and 🌸Flower Fund categories have what they need).

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