I am a long time user of a budgeting program called YNAB (You Need a Budget),  I started using it around January of 2009 after getting tired of using MVelopes (another good program, just didn’t work for ME). For some reason in 2010 I stopped using it- it was a mixture of reasons- moving, broken computer, lazyness, etc.   Ever since we have been feeling that mistake, our budget is in shambles, we are back to paycheck to paycheck living and now, after all the hospital stays in November we are behind on almost everything.

So I took the plunge and re-downloaded YNAB to give it another go- upgrading from the old Pro version I had been using to the newest version 3- I thought I loved it before, but this new version is amazing- so clean and pretty and just makes you want to use it.  I took some time entering my categories and ‘spent’ this weeks paycheck, see the image below for how sad our budget is right now LOL.

The key, and the goal in YNAB is to get a buffer of at least one months expenses in your account so that you are spending this weeks check next month instead of what we are doing is spending this weeks check this week.  Until you have a ‘buffer’ in place you update your budget every paycheck- assigning every dollar a name until you have none left, putting leftovers into your ‘buffer’ until your buffer gets high enough to use for a months worth of bills.

Our January Budget

Right now we have no buffer,  so what you see in the image is one weeks worth of expenses, just what we have to pay right now, with this check, and everytime we spend something it will reduct the budgeted amount by that much so we know exactly how much we have left to spend in each category. For example, right now I have $80 for groceries budgeted for this week, when I go shopping and spend say $40 of that it will come in and take the $40 out, leaving us with $40 to spend on groceries until my next check.  Just for this post I entered a test transaction so you could see what happens when you spend in a category.  See how it shows $40 left in that section now?

Example of Spending in a Category

The fun with this comes in when you have to move things around a little, for example, say we already spent $40 in groceries and now I see something I want that is $15, well, I only budgeted $10 for myself this week (listed under ‘her’).  In this situation I need to decide if I even really want or need this item since it is not ‘in the budget’ – if I do hen I need to decide what envelope that extra $5 will come from because every dollar has a name in our budget- so I will take $5 out of groceries and move it to ‘her’ so I can get the item.

Until you have a buffer it is a good idea to divide up your bills, and add a portion to every check budget, like rent, divide it by how many times a month you get paid and every check assign that amount to rent so that by the end of the month you have rent ready.  This way you avoid using an entire check at once for rent, leaving you with one very tight week!   Because I am just starting my budget up I couldn’t put a whole quarter of rent ‘away’ afterall we had a huge electric bill that was due last week and rent is due next week!  So for now I just put in what I could and next week most of our check will be going to rent, just like most of the check this week is going to electricity.

It will take us a few months to build our buffer, but it will happen,  I will post weekly about our progress so I can stay accountable.  Let me know if you have any tips or advice for us as we go!  Be sure to go get YNAB for yourself and we can build a buffer together!  They have a free (no credit card or other information needed) 7 day trial to try it before you buy it so you don’t have to take a gamble on it.  (It even lets you budget on your iPhone or iPad!)