Quit Living Paycheck to Paycheck: This Tool Makes It Easy to Save

Quit Living Paycheck to Paycheck: This Tool Makes It Easy to Save Photo by svershinsky / Shutterstock.com

Are you tired of living paycheck to paycheck? Wondering if you’ll be able to pay your bills on time, and whether you’ll ever be able to save?

That’s where You Need a Budget comes in. If the very mention of “budgeting” makes you nervous, stick with me here. YNAB is an app that makes it easy to get a grip on your day-to-day expenses, prepare for unexpected expenses and start stacking up reserves for the things you really want in life. In short — a path to control of your financial life.

“It’s not just a tool,” said Lindsey Burgess, YNAB’s chief marketing officer. “We have a philosophy and a method that’s proven. We’ll teach you to do it.”

Here’s the basic idea: Before you spend any money, YNAB allows you to assign each dollar a job — to cover essentials, pay for recurring expenses and target other priorities without resorting to credit cards or late payments. YNAB simplifies the process of tracking your spending by allowing you to connect directly to banks and credit card companies to download transactions. It helps you visualize where you’re spending money that you could use for longer-term goals — like paying down debt or a vacation in the sun.

“Do I want to drink Starbucks every day, or do I want to go on vacation this summer?” said YNAB user Anita Fullmer, an elementary school secretary in Florida. “I have to make that choice. If you see the numbers, it makes it easier not to go to Starbucks every day. You’ve made a plan, and you know you’re moving toward the things that matter to you.”

Gain control of your money

Once they’ve grown accustomed to anticipating and planning for their expenses, YNAB users often feel like they’ve gotten a pay increase, Burgess said. Eventually they accumulate enough money to create a financial cushion for unexpected costs. They also gain a sense of financial freedom that improves their quality of life.

You Need a Budget is free for a 34-day trial, after which it costs $6.99 a month, and there’s a money-back guarantee. The company says users save, on average, $600 by the second month and $6,000 in a year.

Fullmer credits the app with teaching her how to live within her means. It walked her through the setup process step by step.

“It visually shows you what you’re doing,” Fullmer said. “It will give you [spending] categories, or you can make up your own. You can put your money where you want it to go. If you want to pay off credit cards, a certain amount of money will go into that category. It’s really been great. We were living paycheck to paycheck. Now we are one month ahead and have savings. It makes you prioritize what you want your money to do. It holds you accountable.”

The system worked so well for YNAB founder Jesse Mecham that he turned a personal budgeting tool into a product for the general public in 2004. He developed the system as a college student, after recognizing that he and his peers weren’t well-equipped to follow a budget plan.

“He realized that no one knew what they were doing with their money,” Burgess said. “They were stressed out. They needed rules, a philosophy.”

Learn the rules of budgeting

YNAB has developed guidelines for gaining control over your finances. The four rules of YNAB are:

  • Give every dollar a job. Know what you want your money to do before you begin spending it. Ask yourself how you should allocate the money you have on hand before you receive your next paycheck.
  • Embrace your true expenses. Put yourself in a position to pay large bills as they come in. Think of infrequent expenses, such as buying Christmas presents, and how much money you’ll need.
  • Roll with the punches. Adjust your budget as necessary. Things don’t always work out as planned. When you need to make a change, go ahead and make it.
  • Age your money. Work toward spending the money you earned at least a month ago, to avoid living on the financial edge.

Master the YNAB system

You likely will make some mistakes as you learn to be an effective budgeter.

“You have to learn,” YNAB’s Burgess said. “There’s no shame in that.”

Available for both desktop use and mobile devices, the YNAB app comes with tutorials and access to a customer support team. There’s also an online community forum and a weekly newsletter. Hundreds of archived podcasts allow you to learn about budgeting at your own speed, in three- to five-minute segments.

Weekly videos are available to help you think critically about your money. For technical questions, there are help docs or the chance to email messages to the support staff.

Click here to get started with YNAB or get more information.

Feel better about your life

With YNAB, you’re in control of your money, said Fullmer. Instead of paying down balances on the things you’ve already purchased, “you’re putting money in your pocket so you can buy the things that are important to you.”

Giving people financial control is what YNAB is all about, said Burgess. “When you’re in control of your money, you’re in control of your life.”

How do you manage your month-to-month expenses? Do you use YNAB or another budget tracker? Share with us in comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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