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YNAB For Beginners Quick Start Guide 2018

YNAB For Beginners Quick Start Guide 2018
YNAB For Beginners Quick Start Guide 2018

pYNAB For Beginners Quick Start Guide 2018p pwhats up guys its make true here and today Im gonna be walking you through how to set up a budget and why nap now Anna and I have been YNAB users for a couple of years and its handsdown my absolute favorite budgeting software and Ive used a lot of them but the problem is that YNAB is pretty darn confusing at first its laid out kind of different and its governed by a set of slightly different rules than most other budgeting apps out there that you may have tried before because of this a lot of people tend to try YNAB hit some roadblocks and then give up you may even be one of them this might be your second or third time trying to set it all up well no worries there today Im gonna take you stepbystep through the essentials of setting up line app and getting it to work for your specific needs okay so before I share my screen with you and we start setting up your budget you need to understand two quick things about why now number one unlike any other budgeting tool that youve probably ever used like every dollar or mint why AB does not want you to go ahead and budget the full month out based on what you think your income is going to be why not have only want you to budget with the money that you currently have available to you Ill show you what this looks like in the software in just a second but I need you to understand this concept because its one of the most important concepts that is missed by most people and yet its absolutely foundational to the way the software works so lets be clear youre only going to budget the money as you receive it youre not going to budget the money based on what your income is going to be next week or the next okay the second quick note is that YNAB is totally worth it some of this is going to be confusing its going to be different but this program is designed and mimics reallife spending and it actually helps you do two things that you want to do so just bear with me feel free to ask all the questions you want in the comments below I will answer every single one of them and lets just jump in alright so after you sign up for YNAB the first thing youre going to want to do is just create a new budget and give it a name all right so once youve created your budget youre gonna want to start adding your accountant now some people will go ahead and talk their budget first but that never made any sense to me the first thing you need to do is get your account set up now youll need to decide if you want to link your account automatically to where they pull in your transactions from your bank or if you want to just go with an unlinked account personally I prefer to do the manual account because I found that when I have to do everything by hand if you will I keep a lot better eye on the budget and it forces me to pay attention to what Im spending but if you want to have YNAB automatically pull your transactions and thats fine too now there are two overarching accounts when it comes to YNAB types youve got budgeting accounts and then you got tracking accounts generally speaking you should probably just follow the suggestions here checking savings cash credit cards line of credit these are all accounts that basically hold money that matter to your budget youre gonna use this money to spend and buy things in your everyday life a tracking account is an asset or a liability this is basically like your 401k or your mortgage these are things that dont affect your monthtomonth week to week kind of budget but you may want to have them in YNAB overall just to see your net worth grow were not going to worry about these at all for this tutorial were only going to concern ourselves with the budget type accounts because thats all we care about right now so lets start adding in all of our accounts for this example Im gonna add in a checking account Im gonna add a savings account its gonna be an emergency fund with 500 Ill add another savings account thats just general savings for 200 and then lets say that Ive got a credit card that has a 1, 500 balance on it and for now were gonna go and skip this well explain this in a second but were gonna skip that for now and then Ive got another credit card with a 500 balance however this example I am I normally dont like cash and if youve seen any of my other articles you probably know that but I will add just a little bit of cash because unfortunately I do have it sometimes now remember right now youre only going to add the current balance in each account or how much you owe on the specific credit card youre not gonna be adding any kind of future payment or future income that you expect to receive and youll see in a second why YNAB is kind of hard at first and difficult for people because were only going to budget the money that you currently have available and unfortunately you may not have a lot of money currently available but thats okay were gonna get there thats why were doing this whole thing anyways so weve got the account set up now lets jump into the budget okay we have the account set up now lets take into the budget this is what the heart of the program is all about the first thing youre gonna notice is that up here we have this nice big twenty seven hundred fifteen dollars to be budgeted now whats that pulling from well its pulling from all the money that we set up in our accounts over here so we have two thousand and checking five hundred an emergency two hundred and savings and fifteen dollars in cash you can see thats what weve got up here remember how I said that YNAB wants to give every single dollar a job thats what this is for in a second were gonna start adding this money to all of these different specific categories and were gonna budget every single one of these dollars now youll notice that YNAB has already given you quite a few budgeting categories and what we call category groups that you can start with so these blue headlines here are category groupings you can minimize those and then everything under a specific blue heading is a specific category that falls into that group the reason we organize it like this is so that after youve got a bunch of transactions in here and you want to go back and look at historical data you can actually go into the reporting section youll be able to see what youve spent and how its broken down by specific Gouri and category group the cool thing about the way one does their categories is that everything is totally editable so I can come in here and I can change this out if I want I can totally change the category grouping titles as well I can move category groupings I can move individual categories around I can move them from group to group its totally functional to fit exactly how you want your budget to be so the next step for you here is going to be to set up all of the categories and category groupings that you think youre gonna need now dont worry about missing something youre probably not gonna think of every single category the first time that you set a point up and thats okay I dont expect you to remember every single category or category thing that you want the first time you set up wine app but like I said the beautiful thing is that you can edit everything and so its very easy to add in groups later down the road for this example Im gonna show you how I like to set up my categories and category groups first I like to change these immediate obligations to fixed expenses but theyre basically the same thing these are just simply the bills that come in every single month on the same day at roughly the same amount now youll probably have rent or mortgage I actually live in a camper fulltime so I dont have a rent or mortgage but I do have an Airstream payment that I have to make every single month I also have campground fees that I have to make which also contributes to my housing cost you may have electric and water I dont have those because like I said I live in a camper so its gonna take care of that other good things for the fixed expenses category are phone and internet mine are combined and so I keep them combined gym memberships if you had any I dont car insurance is really good to have here if you pay that every month if you pay that like twice a year once a year then well handle that later on now in our family we also have pet insurance I wont I wont get into the pros and cons of that in this article but will you have pet insurance and its a fixed expense every single month I dont put groceries in this category Ill do that elsewhere but I do have a Netflix payment so thats what Ive got essentially like I said these are just the fixed expenses that are gonna be roughly the same every single month now the other thing that I like to do is to actually change the title of these to include the amount and the day that its due on so for the air stream payment its 492 dollars a month and its due on the 14th campground fees always vary I never know when theyre due because it kind of depends on you know how often were moving around but it a bird is around 750 a month my phone and Internet is 218 on the 21st Netflix for us is 12 on the tenth car insurance is 223 on the 18th and pet insurance is 56 on the 1st next I like to go ahead and actually order these in terms of due date that way when Im in here and Im budgeting I can just easily see when Ive got bills that are gonna be coming due alright our fixed expenses category is done were ready to move on ok now the next group I like to add I call living expenses now you can do it by simply renaming this or you can come up here and just add a new group thats what Ill do here now when living expenses I like to add things like groceries cosmetics and household items we actually used to keep all of these three in one category but we recently broke them out because we wanted to mate really make sure and track how much are we spending on groceries like food versus things like deodorant and toilet paper and household items like paper towels and other things like that also in living expenses I have gas petach Spences clothing laundromat and propane refills now obviously if you have a washer and dryer at home you wont have laundromat then you got a budget for but you might have other things that you need to budget for it but thats why its called personal finance because all this is personal you get to make these categories math exactly what worked for you all right were ready for the next group now why have calls these true expenses Ive never really liked that term it seems kind of weird to me I like to call them longterm expenses but essentially theyre the same thing basically this is any kind of expense that doesnt happen on a monthly basis but you know is coming new tires for your car home maintenance because your water heater is probably gonna go out a car insurance if you pay it twice a year or once a year Christmas shopping because you know it comes every single year at the exact same time these are just simply expenses that arent happening every single month but you can plan for them I typically have auto maintenance home maintenance I dont have renters insurance medical bills are always good to say for I handle clothing elsewhere I had no gifts elsewhere and I handle giving elsewhere now before I move on I do want to stop and say something here when you first start budgeting with YNAB trying to save money for every little longterm expense that you can possibly think of can be really really overwhelming especially if you have a lot of debt and if thats you if youre feeling overwhelmed because youve got all these other things on your plate right now I dont even really want you to think about this category that much right now I would rather you focus on the rest of the budgeting aspect working on that debt and then building up an emergency fund so that you can handle some of these unexpected things so dont get too caught up in this for now knows that this is the longterm goal but for now its fine to focus on the rest of your budget focus on killing that debt increasing your investments and getting that emergency fund up and then down the road you can worry about doing some more indepth planning for those longterm expenses now the next two budget groups that I use some people would probably put them in other categories but I like having them in their own separate categories the first one is unexpected expenses again a lot of people would probably put this in longterm or somewhere else I like to have my unexpected expenses alone on their own category if you watch any of my other articles you know that I really struggle when it comes to surprise expenses and so Hannah and I have decided that for us it makes the most sense to have an emergency fund do some of this longterm planning and then still in addition to that have a monthly unexpected expenses that acts as a buffer for when crazy stuff happens this just personally helps my sanity and so thats the way I like to do it I do it this way because that way when I get into the reporting function here Ill go over there and show you when you go into a report like this is our spending from July of last year we go into a report you can see that we had an unexpected expending about three hundred seventyfive dollars and 77 cents and I can click in here and I can see exactly what that was so thats the way I prefer to do it now the other group that I like to have on its own category is giving and again its all for the reporting aspect of it so forgiving we typically have two categories we have kind of our normal giving this is church tithing things like that and then we also have gifts for others this is gonna be birthdays and Mothers Day and Fathers Day and things of that nature alright were almost there only a couple more categories to go next Im gonna do our fun spending now for fun Hannah and I typically do we have a date night slash eating out category thats for us going out together or sometimes with friends we dont have a gaming or music but however we do each individually get spending money and so we both get the exact same amount every single month and that kind of gives us some independence in the budget and allows us to both have a little bit of freedom to spend how we see fit the next grouping is going to be debt repayment now luckily for Hannah and I weve been able to work real hard and weve been very blessed in our lives that we are currently debtfree with the exception of our Airstream as you saw earlier I handled the Airstream payment up here under the fixed expenses and so for our debt payments I actually we dont have that category however if you did have this category if you did have any debt the place that you would do it with the exception of credit cards is gonna be here so student loans would go here auto loan would go here any other type of personal loan would go here credit cards were gonna handle them separately on their own in just a few minutes but for now any kind of debt payment is gonna go in this category grouping alright so next we have a group for savings why not have calls it quality of life goals I just like calling it savings this is basically anything that Im saving for that semi longterm currently weve got a category that is for trips and vacations weve also got a retirement savings category now if youre investing in your 401k at work you may do that lets say prepre your paycheck so you wont have this category necessarily unless youre doing some Roth IRA or something like that I also include any other smaller goals that Im setting for so right now Ann and I are saving for kayaks and were also saving for a sewing machine for her and lastly were also saving for a down payment its kind of a long term goal we dont plan on buying a house soon but we want to start saving for it now so that one day whenever we decide to buy a house were ready alright and lastly I have a separate group for emergency savings now again you might be wondering why I keep this separate and essentially it goes back to kind of the reporting thing but ultimately this here is an emotional position I personally like to keep my emergency money separate from the rest of my savings I found that for me lets say that I have a 4, 000 in an emergency savings account all of a sudden if thats combined with the rest of my savings I get feeling pretty good about my savings and I get really tempted to spend some of that money on some of these the things that Im saving for so for me I like to keep emergency money totally separate and that way I dont even think about it as optional for me to use for some of these other saving goals whoo okay that was a that was a lot I know that was a lot are you still with me you feeling good you feeling like you learning something with the budgeting stuff now its actually the fun stuff we we actually get to dive into making a plan with your money you hear me talk a lot about how budgeting shouldnt be restrictive it shouldnt be this thing that you dread and avoid it should be you making a plan with your money to live the life that you want to live and thats why I love YNAB so much because thats what it allows us to easily do so lets jump back in and start making a plan so youve got your account set up youve got all your budgeting category set up the next step before we budget this money is to actually set goals for each of these categories luckily YNAB makes this super simple so were gonna start with these categories that we know are gonna be the same amount every single month simply come over here to like pet insurance click in it and then youll see on the righthand side where it says create a goal now you have a couple options here right now what I care about is this monthly funding goal so every single month I need to budget 56 dollars in order to cover the pet insurance all right now Netflix I need to budget 12 dollars the air stream payment Ill need to budget four hundred and ninety two dollars for car insurance I have to budget 223 the phone bill is 218 and campground fees is 7 all right so you get an idea how that works now we want to set goals for our living expenses things that we dont know you know exactly how much its going to cost but we can have a goal in mind of how much we want to spend so for groceries for instance 10 and I typically try to spend around 400 a month on groceries for cosmetics we aim to be around 75 so you kind of get the idea how that works Ill scroll down here and show you as well so for our fund money Hanna and I also we currently each have 30 dollars worth of guiltfree spending money now you also want to do this for your savings goals and your debt repayment goals so lets say for our sewingmachine goal were not going really hard after that right now but were trying to say maybe twenty dollars a month for that kayaks were trying to save a little more for because we would like to get those fairly soon so maybe a hundred a month for that you kind of get the idea now basically you want to set goals for every single thing because that tells you how much you want to spend in that category and then we can use this information to actually budget the correct amount for those categories remember we havent actually added any money to these categories just yet and and thats because like I said earlier YNAB is different than a lot of other budgeting tools were not gonna budget the whole month at once were gonna set goals for the whole month at once but were not gonna actually budget for the whole month at once yet now I also want to point out that why NABs got some other cool goal functionality so you can actually set goals to have a target balance so for Christmas shopping for example lets say that I want to set a goal to have 500 for Christmas shopping by November or by December so by December of 2018 I can hit okay and boom now it tells me that I need to budget 100 more to stay on track towards reaching my 500 goal if I want to actually be at 500 by December and thats because right now were in August all right Im not gonna finish the rest of these goals right now for this example I think you can do that on your own so lets keep cruising youve got your account set up you got your category set up you got your goal set up now were finally ready to start actually budgeting this money so lets go back to the top here and look at this inflow to be budgeted remember this is the money that you have available to you and we need to give every single one of these dollars a job first and foremost its probably easiest to assign the money in your savings account so we can look over here and see that weve got 500 currently in our emergency fund and so lets go ahead and move five hundred dollars to our emergency category and if you scroll down youll see that now the emergency savings has five hundred dollars in it now weve also got two hundred dollars in savings so where do I want to put that well lets say that I want to go ahead and do a hundred to the kayaks and thatll hit that monthly goal because I really do want those kayaks great so now we are funded now Ill also go ahead and add in maybe 50 to the down pay a house and maybe Ill thrown 20 for the sewing machine and then Ill put the other 30 towards our trips and vacations alright so now weve got 2, 000 and then weve got 15 in the wallet and thats how much weve got left in our to be budgeted so now lets take a look at the bills since were not budgeting for the whole month we dont have the money to budget for the whole month we need to think about what bills are gonna be due first and lets make sure we have the money in our account to cover those so today is August 15th so I know the very next thing that Im gonna need to budget for is I need to make sure that Ive got car insurance money there to cover that then I probably want to make sure that Ive got enough money for our internet and phone bill cuz I may not get paid again before that and then Ken Brown fees I dont know exactly when well I kind of do because obviously I know when Im traveling for you with rent you would know a specific date but for me Im gonna go ahead and just cover about half of that so Ill put 300 and then on my next paycheck Ill add it and go ahead and finish off the rest now I know Im gonna get paid again before any of these bills come up so Im not gonna worry about those just yet Im gonna go ahead and move on to some of the other living expenses so I know that were gonna need to buy some groceries this week although my goal is 400 Im not gonna budget all that yet Ill budget 200 for the Hat for cosmetics remember my goal is 75 Ill go ahead and budget 40 for cosmetics for household items my goal is 75 so Ill budget 40 for that as well I know that Im gonna have to fill up the truck again before I get paid so Ill probably go ahead and add in 75 dollars there its a its a diesel gas is expensive now if youve watched any my other articles you know that I am NOT a big fan of cash actually I really cant stand cash because its hard to track and I just dont like it so but unfortunately I do have to have cash for a few things like the laundromat so Im gonna go ahead and budget 15 for the laundromat and then Ill be sure to use my cash in order to do that all right so I now have eight hundred and fortyfour dollars left in all of this and I need to start thinking about a few other things right now Im not gonna put any money towards these longterm things well actually I will go ahead and and budget a hundred dollars for Christmas so that Im good there Im gonna hold off on these for now Im going to go ahead and add 50 for unex did a budget for our spending money and you can see it kind of does this cool thing where when you do half of it fills in half the pie and kind of let you know quickly where youre at on your on your funding alright so now were down to six hundred and nine dollars now I have done a little bit for savings so thats not bad but really what I need to be thinking about is beefing up my savings and then also I need to be thinking about these credit cards over here so I may go ahead and Im plan to do 100 for retirement savings but then Im gonna Im gonna lose the rest of this money to start worrying about these credit cards so what I mean by that well nows a good segue into talking about how YNAB handles credit cards si wine and handles credit cards and what seems to be a kind of a funny way at first but once you get the hang of it you realize no this is exactly how it works in real life so of course they handle it this way so what I mean well right now I owe 1500 on my visa and 500 on the MasterCard now youll notice that I didnt set up these credit card payment categories wine I have actually set these up automatically for me see credit cards my NAB have their own category and you need to budget money for them just like you would any other thing so think about this I have two thousand dollars in my checking account but that doesnt mean I can just go spend two thousand dollars right because Ive made a definitive statement that I need to use some of this two thousand dollars for these things right 223 for car insurance 218 for phone and internet 300 for campground fees so this this money in my checking account I cant just use it to pay these credit cards off even though it looks like I could because Ive had to budget it for these other tasks so how do I know how much of this checking account money I can use to pay off these credit cards well thats where budgeting this money before the credit cards comes into play so lets say it looks like Im actually got enough money left to go ahead and just pay that MasterCard off and so if Im really serious about getting out of debt I might go ahead and throw all 500 of these at that MasterCard now look Ive got a green bubble over here and that means that I have 500 ready to pay against that MasterCard and pay that off now lets say that I want to throw the rest of this 39 on against this Visa Card well Ill add that there now Im going to zero not a money to be budgeted its all all this money is now accounted for and Ive got 39 dollars that are ready to pay against the Visa card and 500 that are ready to pay against the MasterCard now in an ideal world obviously if you listen to me at all you know that I preach about not using credit cards unless you are paying them off in full diligently every single month if youre carrying a balance on that credit card you probably need to cut it up and figure out how to get rid of it of that debt as soon as possible but if you do have debt on a credit card that you cant pay off and pull every single month the best thing to do is to come over here and try and set a goal right so set either a monthly funding goal or a pay off the balance date by a certain date so lets say that I want to pay off this balance for this card by December of 2018 well now its gonna tell me that I need to budget two hundred and sixty one dollars more to stay on tracks now in a second when I start explaining how transactions work and wine out youll understand why credit cards are set up this way itll make a whole lot more sense to you so just hang tight for that and well explain credit cards in a little more detail in just a second the bottom line here that I need you to understand is that what we just did we said we had two thousand dollars in checking we had fifteen dollars in our wallet we took all that money and we put it in these various categories so that now when we go and spend money out of our checking account or we go and spend money on these credit cards we know where the money is going to come from and then were gonna know that we can use a certain amount from the checking account to pay off the credit card okay so that brings us to a really good spot to finally start talking about transactions and how do you actually record your spending as its happening so you can do this on the YNAB on your phone which I love I love the one app app by the way or you can use a computer were just gonna do two only computer for now its pretty simple just make sure youre in the right account so lets say that I wrote a check or I use my debit card and then you click up here to add a transaction put a date on it so lets say today the payee lets say that I got Taco Bell lets say I was really really hungry so lets say were just talked about as well Taco Bell goes in to date and I eating out for 25 lets say Hannah and I were super hungry and we spent all 25 and now what you can see if we go back to our budget and scroll down youll notice that under date night spending we had 25 budgeted and now we have 25 spent and we have 0 available to spend in that category so its pretty easy to understand spend money out of your checking account the balance goes down and it leaves your budget so how does the credit cards work lets get back and look at that well what happens when you spend on a credit card is a little bit different so lets look at the visa for example Im gonna go ahead and pay that phone bill so the phone bill is 218 Im paying it on the visa so phone bill paid 218 all right so now on the visa card I have a balance of 1718 dollars so lets see what happened over here I now have no money available which makes sense it took it away because I spent it and it shows that I spent two hundred eighteen dollars but if you notice my checking account balance is the same well of course because I spin it on the Visa Card so where did this money go well where went is up here so now remember just two seconds ago we had 39 dollars available to pay against the Visa Card now we have two hundred and fiftyseven dollars available to pay against the Visa card why does this work well this works because think about it we said we had two thousand dollars in the checking account that was our to be budgeted we said we were gonna take two hundred eighteen and mark it for our phone bill when we spent the money on the visa the money hasnt left our checking account yet so we cant just make it leave the checking account because that hasnt happened in real life in real life visa knows that we owe them two hundred and eighteen dollars so why NAB being its clever why NAB self puts that money up here in the credit card payment section so that when were ready we can send two hundred eighteen dollars from our checking to the Visa card and paid off so now lets say that later today I log in to my Visa card account and I want to pay off that two hundred eighteen dollar bill so Im gonna pay off the phone bill Im gonna transfer money from checking to the visa and now the checking account does go down the visa car goes back to 1500 and the visa card payment goes back to 39 available so that is a quick and kind of quick and dirty overview of how credit cards work and why now that was probably a little fast a little confusing if you want put a comment down in the section below and if you if you like I will make a more detailed article on the way credit cards work and why NAB theyre probably the most confusing aspect of the program but I did want to at least quickly go over how they work okay so moving on from credit cards the next thing we want to look at is what happens when you overspend like is there a problem when you actually spend more money in a category than what you have available to you well yes there is lets look at the car insurance for example so car insurance we said two hundred twenty three dollars thats what we budgeted two hundred twenty three dollars lets say that I spent two hundred and fifty and whats gonna happen is when I come over here to the budget its gonna show a negative twenty seven dollars now heres one thing you need to understand about whine amps color system youve also noticed I havent mentioned that until just now and thats because now is when it matters the most why nap has three colors green green means that youre good either the category is fully funded to your goal that you wanted the category still have some money left over that you can freely spend it means youre good yellow means hey theres something you need to pay attention to here so for instance here yellow just simply means hey your fifty six dollars short of your goal so you need to add fifty six dollars if you are red red means overspending this means bad but red means specifically overspending in a cash equivalent account so either your wallet or checking account or savings account it means literally that account is twenty seven dollars less then what you planned for so you need to fix that ASAP alright so what can we get well lets do this heres the cool thing this this is where the the power of YNAB can really start coming into play I can easily cover the spending by just going gas boom YNAB automatically added my budget to 250 here so that it went to zero and it took 27 out of my gas category okay lets look at one more overspending example that you need to understand when it comes to credit cards lets say that I go to the store and I overspend on groceries all right but I do it on the credit card not out of the checking account all of a sudden now if I go to groceries youll see that it has this little emblem here with an exclamation point in a credit card and its negative fifty dollars what that means is Ive overspent on a credit card now the reason thats yellow is because again it hasnt left my checking account my actual money that is in my name is technically the exact same I havent overspent but it does mean that when the credit card bill is due Im not gonna have budgeted enough money to cover that expense so I still need to cover it from somewhere else so lets say that I want to cover this money from lets say maybe I want to cover from campground fees well I can easily do that just by doing it that way so thats another example overspending in a checking or savings its gonna be a big read overspending on a credit card its gonna be a yellow this is the power of Y now YNAB understands that unlike physical envelopes where youve got to physically take money out of one envelope and put it another one when you want to change it YNAB makes it super simple to switch money from category to category whether you want to add money to a category to spend more or whether you over spent money and you need to cover it with another category okay now that really was a lot we we covered a ton right there I hope that youre still with me I hope youre still hanging in there Ive just got one more major point to hit on that you really need to understand to get the most out of YNAB so stick with me for just a little bit longer the next feature is extremely important and I think youre really going to like what you see its going to help you stop living that paychecktopaycheck lifestyle this is this is the power of YNAB right here it actually helps you get a handle on your money get ahead of your money so that you can do what you want to be doing so lets go ahead and check that feature out all right so lets fastforward a little bit lets say that you get to the end of the month and youve still got money left over in a category for instance lets say weve still got 50.00 left and our date Im eating out category well weve got a couple options here we could take that money and we could transfer it to pay off some debt maybe our credit card we could take that money we could transfer it to savings and try and save some more money and get ahead well or we can just leave that money there and let it roll over to the next month this here is whats so cool about wine app if you dont spend the money this month it will automatically roll over and stay in that category for next month so you can see were starting off the month date night eating out with 50 dollars in the bank okay now lets look at one more example when it comes to month to month lets go ahead and pay myself for the rest of the month all right so I had a paycheck come in that was two thousand dollars so youll see here now weve got two thousand dollars thats to be budgeted so now we can fully fund all this stuff all right so now we can see that I got paid two thousand dollars and I am fully funded for the rest of the month and Ive still got 630 dollars left over I already budgeted for the whole month maybe its still August 15th but Ive gotten paid enough to where Im budgeted Im good I know that this is enough money for me to get through the rest of the month what do I do with this six hundred and thirty dollars well now what I want to do is lets go ahead and start budgeting for the next month lets go into September and lets get ahead so I know Im gonna have to make an Airstream payment of 492 I know that Im gonna have pet insurance a56 netflix of 12 and lets just go ahead and take the rest of that and put it on gas so now I have not only fully budgeted all of August Ive already started budgeting ahead into September okay why does this matter why do you care well this is how you stop living paycheck to paycheck when you start doing this you start getting ahead so that now all of a sudden my first paycheck in September Ive actually already covered a good bit of September expenses with August money and so then if I can continually get ahead and do this over the course of a few months or even a year eventually I can get to where Im covering all of next months expenses with this months money and Im spending last months money this month this is how you break that paycheck to paycheck cycle now why now has a concept called aging your money essentially all it means is exactly what I just said aging your money is saying look we had money come in on Friday and if all of a sudden you spend that money Thursday then that money is only six days old thats not very old if you can do what I said which is work to where you are getting a month ahead then all of a sudden your money is 30 days old and so your longterm goal should be to try and get your money to the age of 30 now right when you start an account YNAB doesnt have enough data to add your money but when you do itll dope here in this little corner right here this here is why YNAB is so daggone powerful it helps you break that paychecktopaycheck cycle and get on living your life and doing what you want to be doing if you liked this article and found it helpful please hit that like button and leave a comment down below and tell me what was the most helpful thing that you learned from this tutorial if you didnt learn as much as you were hoping and you still have questions please leave those questions down there below as well I promise I will answer them all also I will have my affiliate link in the description below if you would like to check out a 30day free trial from YNAB itll give you a free month itll also give me a free month if youre not into the affiliate Lenny thing thats fine just go to YNAB comm and you can grab a free trial that way as well sure I would love if you use my affiliate link but ultimately I care much more about you trying to software and getting ahead with your money and really getting a handle on it then I do about me saving a couple bucks as always please subscribe to this channel if you like this article and want to see more like it and remember I can teach you how to budget I can teach you how to get ahead with your money and map it out but I cant make you do it the choice is yours Ill see yall next timep

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