You Need A Budget

amateursurgeon

amateursurgeon

Hot Metal and Methedrine
Apr 2, 2007
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The Uncanny Valley
I've just been checking out financial management software, and come across this:

Personal Budget Software - Finance Software for Windows & Mac

It looks very good compared to things like Quicken and Gnucash, because it's actually based around a methodology (building up a buffer) rather than just recording your figures.

This is particularly important for people who have unpredictable income (ie anyone doing online marketing), because otherwise you fall into the trap of having an amazing month, deciding you're rich, spending the lot, and then being bankrupted when your sites get nuked by the next Google update.
 
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The easiest budget system I used in college was the envelope system.

- Cashed out my income every month
- Pay rent / bills first
- 10% goes into savings
- The rest I physically divided into envelopes. One for gas, one for groceries, and one for fun / anything else. I kept paper dividers in my wallet.
 
Dr_Ngo said:
The easiest budget system I used in college was the envelope system.

- Cashed out my income every month
- Pay rent / bills first
- 10% goes into savings
- The rest I physically divided into envelopes. One for gas, one for groceries, and one for fun / anything else. I kept paper dividers in my wallet.
Click to expand...

Oldschool but it works :frenchman:
 
trueDough said:
Oldschool but it works :frenchman:
Click to expand...

Unless you have a 2-year old. Then you'd find the contents of your envelopes behind the washing machine, in the garden, under the car etc.

This is a little different from the envelope system because of the whole buffering thing... in fact it sort of works alongside it. Personally, I think it's a fucking brilliant idea, and wish I'd discovered it earlier.

Rule One: Stop Living Paycheck to Paycheck – A notebook won’t help you stop yourself from living paycheck to paycheck, but YNAB will. You will have two types of income, primary and supplemental. When you start the system, you’ll record all your income, even if it’s from your primary job, as “supplemental.” Supplemental means that you will be spending the income in the current month. You are, in a sense, living paycheck to paycheck because you spend the money in the month you earn it. As you work through the system, eventually you’ll reach a point where your job income will be listed as primary income, to be budgeted for use in the next month. This is important because when you go to the budget section, the income will appear in the next month. The tool has, in effect, taken you off living paycheck to paycheck.

Rule Two: Give Every Dollar a Job – This rule enforces zero-based budgeting, where every single dollar is assigned to a category. The value in budgeting like this is that you have accounted for every penny you have in your budget. So many times we just budget for the big things – food, rent, etc. The act of sitting down and setting these numbers is tremendously valuable because you’re actively making decisions, rather than letting things happen.

Rule Three: Save for a Rainy Day – This rule is less about the tool and more about the idea of creating various savings funds whether they’re for emergencies, annual taxes, holiday spending, etc. This fits in line with the zero-based budgeting because these are entries in your budget.

Rule Four: Roll with the Punches – This is a great feature of YNAB that a lot of other packages don’t have. What happens when you go over your budget? Most other packages warn you, tell you not to do it next time, and probably do nothing about it. YNAB will deduct it from next month’s available funds. This is good.
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Downloaded, time to start stacking dollars in that savings account.

I actually didn't realize how much I was spending until I put it all in a budget... time to start cutting back my epenses.

Current balance of my savings account = $0.13

Will report back in two months bros. :)
 
Joshk said:
I really like a mint a lot and it's free and quite a bit more powerful than this.
Click to expand...

They're very different tools. Mint is overall financial management, YNAB is laser-focussed on budget management. Use both, unless you already have your spending under perfect control and are hitting your savings targets every month. Otherwise, it's like comparing a laptop with a smartphone.
 
I've been using this for years, and the new version is absolutely the shit. Once the new Android app gets the bugs out it will be even better.

This is a must-have for anyone imho. Great code, and stellar support- stellar.
 
I don't see how people find this hard to do? I'm 25, so I don't need a huge stash of cash, nor am I really concerned about saving/investing. I'm more concerned about growing a million dollar business and reinvesting into already much more profitable means of making money outside of 1.2% on 5 year CDs or risky market investments when I know very little.

1. Keep at least 6 months worth of living expenses.
2. Know what your health insurance plan is, and try to have a small egg there to cover unforeseeable accidents.

It doesn't take too much in the way of common sense to set a good plan for yourself.
 
shaneypoo said:
I don't see how people find this hard to do? I'm 25, so I don't need a huge stash of cash, nor am I really concerned about saving/investing. I'm more concerned about growing a million dollar business and reinvesting into already much more profitable means of making money outside of 1.2% on 5 year CDs or risky market investments when I know very little.

1. Keep at least 6 months worth of living expenses.
2. Know what your health insurance plan is, and try to have a small egg there to cover unforeseeable accidents.

It doesn't take too much in the way of common sense to set a good plan for yourself.
Click to expand...

It's not conceptually difficult to set a plan, but making it happen is where some people (including me) fall down without some help.

It comes down to your relationship with money and your habits around it. If you've already got a good relationship/set of habits, that's great. However if you have a tendency to empty your bank account at the first sign of something exciting to do/shiny to buy, and then wonder why you're broke 6 months later, a tool like this is useful.
 
Just picture yourself broke and working as a Walmart greeter at age 70. That makes me stay away from the shiny stuff every time. I'd much rather not have an iPad than sell my soul to Walmart at age 70.

Because lets face it, shiny shit can bring you down whether you have 10k now or 50 Million.
 
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