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An insulting guide to budgeting

April 14, 2017 - 4 minute read

"The cold harsh reality is that we have to balance the budget. "
Michael Freaking Bloomberg

"But I don't want to budget! Sticking to a budget is such a chore! Entering all my transactions is so hard!" Yeah, whew, that's a tough one. But you know what is even harder? Being hopelessly, desperately poor.

Or, maybe try being hopelessly, desperately poor and then finding out your car transmission is shot. Or that your kid broke his arm and had an ER trip. Or that your roof is leaking. This is your future, and it's really bumming me out.

Let's try some honesty for a minute.

Step 1: Accept you're a failure

Listen closely, because this part is important: You don't earn enough money to be able to just say "screw it, I'll buy whatever I want and it'll be fine." You've already lost. You absolute loser.

But here's the thing: we're all failures. Nobody earns enough to buy whatever they want all the time. Everybody has limits. I bet you Bill Gates has a budget that he's using more effectively than you, and that's Bill freaking Gates.

So given that you're already a huge loser like the rest of us, your best chance is to do what you can with what you do have. That means taking whatever pitiful income you earn and not spending it like an idiot.

You need a budget. Yes you do.

Step 2: Track your spending for a month

I guarantee you have no idea how much money you spend on stuff each month, if you're not tracking it. Take a guess at how much you spend on groceries or restaurants, then track that for a month. I bet the real amount will be at least double what you expected.

So given that you're a failure when it comes to earning loads of money AND you have no idea where the money that you do earn is going, you'll need to figure that part out.

Download any of the bajillions of mobile apps for tracking your spending, and use it consistently for a full month. That means entering an amount and category for everything you spend money on, from your mortgage all the way to a pack of gum.

Step 3: Sign up for YNAB (You Need A Budget)

Now that you have a rough idea of how much you're spending on everything per month, you're ready to make a budget.

Well aren't you lucky, because it just so happens that there's an app for that. First, watch this video. No seriously, it's barely even a minute long.

Then head on over to sign up for YNAB. That'll guide you through the process of entering your accounts and balances, then planning the budget for the coming month. And, OMG, there's a free trial that lasts a month. It's like Christmas!

Yes, it costs $5 per month after the trial ends. Do me a favor and just shut up about that. If you're thinking there's a free app out there that's just as good, then trust me when I say there's not. I've looked, really really hard. YNAB's approach to budgeting and the YNAB method are pretty unique, and it's about 5 steps above all the competitors.

No, Mint won't cut it. Mint is good at looking back, but it's terrible at looking forward. No, none of the free mobile apps are "good enough". I've tried dozens. Just stop, trust me, pay the $5 and move on with your life safe in the knowledge that it'll save you thousands.

Step 4: Set up your budget

Signed up for YNAB? Congratulations, you know how to fill out a registration form.

Take the result from step 2 (that's the one where you tracked your spending, genius) and use that to fill in your budget. For example, if you spent $800 on groceries but you're pretty sure you can keep it to 600, then go for it and enter 600 for your groceries budget. And on we go, for each budget category you set up. Isn't this fun?

Note that YNAB lets you budget the money you actually HAVE in your account, with the goal of working up to the point of being able to budget your entire month with the money you already have when the month starts. This means you can get out of living paycheck to paycheck.

Given that you're a money dummy, I'm going to assume you're nowhere close to being able to do that yet, in which case you can start by budgeting until your next paycheck instead of the full month.

Step 5: Use the budget

Caution, big words coming: when you buy something, put it in YNAB. GASP

People always seem to have trouble with this. It takes 10 seconds. The mobile app even keeps track of where the stores you go to are and prepopulates the info the next time you're there.

Just do it. If you can't spare the extra 10 seconds whenever you buy something then you're buying wayyyyy to much stuff and you care wayyyyy too little about not being a homeless person.

If you're about to buy something but you notice that there's no money left in that thing's budget category, then you have 2 choices:

  1. Don't buy it
  2. Take that money out of another category that doesn't need it

There is no "Option 3: Buy it anyway" That's not how this works. Your money is your money. You can't buy stuff with money you don't have unless your goal is devastating credit card debt in which case you're taking great strides.

Step 6: Adjust and repeat

When that month ends, you budget the next month. Look at the places where you went over or under and adjust from there. Your goal is to become a little less obvlivious each month about where your money is going to go that month, while still putting money into "in case unexpected crap goes down" categories for when unexpected crap goes down.

After you've done this for a few months you should have a good handle on how much you HAVE to spend vs. how much you WANT to spend, and you can start moving some of that WANT to spend money into savings instead, but that's a topic for another post.


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