This post may contain affiliate links, which means a commission is earned if you make a purchase via the link. There is no additional cost for you.
Budget. One word that can bring up so many different emotions.
When trying to get control of your finances, this is really the first and most important thing you can do. It makes you see how much you truly are bringing in each month (income) AND it forces you to list all of your expenses and debts. A budget means that you are tracking your inflow and outflow. Simple as that.
When we started doing this, it was amazing to see how much we were spending frivolously. It was like a kick in the gut. BUT, it also showed where we could cut back and save!
My favorite budgeting tool that both my husband and I love and use is YNAB* (You Need A Budget).
You Need A Budget* (or YNAB) has been a life changer for us. We’ve been users of it since getting married, so almost 6 years now. And they have grown and changed and improved so much over the years.
They base their budgeting system on four rules:
1. Give every dollar a job.
Every time a paycheck hits our bank account, I go into the YNAB app, or on the computer, and assign EVERY dollar to a category. It causes you to prioritize your money and make your money work for YOU, instead of you working for your money. Having a zero-based budget opened our eyes to where we could cut back and really start saving and throwing money towards debt.
2. Embrace your true expenses.
You know those odd expenses that don’t come around every month? Auto insurance, the water bill, even the dreaded yearly license renewal. We were trapped by them too. It seemed a shock every time payment came around. With YNAB, you can break those into manageable expenses by dividing them into monthly payments. Even though you may not pay out each month, you are paying into that category in your budget, so when that ‘surprise’ bill comes, you already have the money set aside for it. Not only can you do this for irregular bills, but we do this for Christmas. We figure out how much we want to spend that year and divide it by 12. When Christmas comes around, we aren’t spending money we don’t have.
3. Roll with the punches.
YNAB allows flexibility. No one is perfect. There are going to be months where you go over budget in a category. I love how easy YNAB makes it to move money from one category to another in order to cover overspending that might have occurred. Like last month, I made a trip to Trader Joe’s and overspent on groceries. It’s just not safe to let me in that store! In our budget though, I noticed that we underspent on fuel for the month. I was able to easily transfer the extra in our fuel category into the grocery category to cover the overspending. Make your budget work for you.
4. Age your money.
This is a number I love to see. Your initial goal is to age your money 30 days. This means that you are a month ahead of your expenses – not living paycheck to paycheck. The money you bring in this month is actually going towards your bills for the following month. It gives you breathing room. Right now, our money is aged 55 days. So we are almost two months ahead. Our next goal is to have enough saved for 6 months of expenses in case a job loss occurred or something else happened. I love seeing that number get higher and higher because it means we are gaining on our goal!
I can’t say enough how much YNAB has changed our lives in regards to finances and living stress-free. For real though. It’s a budget on the go. You can do everything right from your phone or tablet, as well as on your computer. I use it mainly on the app, and then at the end of the month, I like to reconcile all my accounts through their website YNAB.com*.
It’s a to-the-minute budget. Every time my husband or I make any purchase or deposit, we just input it into the app and we know exactly how much money we have left in each category. It definitely took a little while for us to both get into the habit of doing this, but once we got it, it is really so quick and easy. My husband loves this aspect of YNAB because he can also be up-to-date on everything. I’m home with the kids, so I pretty much do all the money managing. Now we are always on the same page when it comes to finances and monthly spending. He can pull up the app on his phone, and know exactly where we are in our budget. And a new feature I just found out about – if you’re a smart home, you can even check your balances using Alexa!
Check it out. Try it out for free for 34 days. If you sign-up for your free trial using my link*, you’ll actually get an additional month for free (and so will I)! I’m pretty sure you won’t be disappointed. Like I said, this budgeting tool has truly changed our lives when it comes to our finances. We’re looking to pay down a massive amount (at least in my eyes) of student loans, and YNAB is helping us do it by keeping us on track with day-to-day expenses.
Which brings me to the Bonus!
The one thing that YNAB does not allow me to do is to have a plan to pay off our student loans. Now, you can have your student loans listed in YNAB. You can have it listed as debt in your budget. YNAB will track it for you, but it only tracks your actual payments. I was looking for a tool that would let me have more of a debt payment manager where I could also see the projection of the loans.
I found everything I was looking for in regards to tracking our student loans in detail with Undebt.it*!
It’s free. It’s easy to use.
My favorite thing about it is looking at the Debt Snowball Table and seeing how much we have paid down and how much we have to go. I also like that I can see the progress of our debt payment as a total and per loan. As soon as you log in, you are at your Dashboard and can see EVERY detail of each loan. Now, I’m a numbers person, so I absolutely love this. If you’re looking to just track the payments of your student loans, YNAB is sufficient for that. But if you want greater detail as in payment plans and payment progress/projection, check out Undebt.it*.
Now, Undebt.it DOES have a premium option. I haven’t personally tried this out yet, but at only $12 a year, it doesn’t cost an arm and a leg. For a comparison of the free version versus Undebt.it+, here’s a chart* noting the differences between the two. It looks like there are a few neat features with the paid version like a 52 Week Savings Challenge and some extra tracking features. A free 30-day trial is also available if you wanted to check out the premium content.
So there you have it. My favorite budgeting tools.
Do you budget? If so, what tools do you use?
Linking up at Pretty Pintastic Party