The Right Tool

One thing I have learned from my experiences in making things, from sewing to painting to construction, is that having the right tool for the job makes your life so much easier. Sometimes it's not worth investing in the tool if you are going to do something once (or you can take the approach a friend of mine suggested which is to buy the cheapest tool you can to get the job done, and then replace it with something high quality when you break it from over use... I call it The Harbor Freight Method). Other times, it's worth spending the money for the right tool from the get go so you can get the results you want. 

What I'm really talking about here is budgeting. Specifically that I'm using YNAB (You Need A Budget), and loving it. I tried it several years ago but it felt bulky and I didn't like that it was software on my computer. They have a free 34 day trial (which is awesome because it gives you a full month to use it and a couple days to see the impact of the next month). I have already budgeted to pay for a full year of using it. YNAB has updated to be a cloud based app, which you can use across multiple platforms and it fits much better into my smartphone-centric lifestyle. 

What was the final push to go to YNAB instead of using a spreadsheet?

I've been making budget spreadsheets for years. google Sheets is my BFF. I get crazy with categories and planning and color coding and trying to juggle debts/credit cards/bills/plans. I listened to the Art of Manliness interview with the creator of YNAB and his logical 4 pronged approach to finances made sense. I tried to adjust my spreadsheet to match the YNAB philosophy but I could not figure out an easy way to continue to use my credit card while also marking those transactions towards the line item they are associated with (like internet, I use autopay on my credit card but that's not a credit card line, that's an internet line, but I also need to keep track of my credit card balance!). 

A key thing I learned years ago is that in order to determine if you can afford something you have to check your budget, not your bank account. The YNAB app makes this really easy, and it's also easy to keep on top of things, adding transactions is quick and easy and it means it has easily become a habit in the last week alone. I love making spreadsheets and tracking numbers but I just could not use it for my actual spending habits. 

What about Mint?

Mint is a great free app (remember that when something is free it means you and your data are the product) but it's really set up for retrospection as opposed to planning and future goals. While you can create budgets in Mint, there's no widget to see your BUDGET in order to determine if you can afford something... just balances. Which gives a false sense of being cash-flush! If I am wondering "can I afford to buy a flight for Christmas right now" the couple grand in my account the day after I get paid makes me think I can! But the reality of all the dollars already spoken for says I can actually only afford part of that flight. YNAB is set up so that you can keep goals for big purchases at the forefront of your mind when you go to make purchases. Can I afford to go out to dinner tonight? Well there's X dollars left in my "dining out" category... but there's 2X dollars in the grocery account so I can just move some dollars over! I even have line items for big items that aren't getting funded right now but it's a reminder that once I reach some intermediate goals, I'll be able to fund bigger things... like a trip to Scandinavia or New Zealand using those airline miles I have been racking up!!

Here's the podcast episode I listened to that inspired me to give YNAB another chance: LINK

Here's a link to YNAB, check it out for yourself!: LINK

Don't budgets mean you can't do things? Aren't they limiting?

Budgeting doesn't mean you can't do things. Instead it helps you focus on the things you want to do BEFORE they come up. Do you want to join friends at a concert that costs $100 for a ticket that you didn't anticipate being invited to? Well you can, but that might mean that you will be pushing out when you can take that trip you have been saving up for. It's not a "no", it's a "yes, when". It's all about priorities. Creating a budget, where you give every dollar a job, and then move them around (a key part of the YNAB approach) as you need them means you know what you are giving up when you say yes to one thing instead of another. It means you are living on your present monies instead of stealing from your future self.

How did I know I needed a budget?

I've always been generally aware of my finances, but a couple times I have let present me screw over future me but racking up some credit card debt. Saying yes to things that I didn't have the cash for meant that in future months (now), my money is already spoken for. It means when my paycheck lands in my account I don't have freedom to do the things that are important to Present Me. Past me made these choices and now future me has to pay for them, for months. A budget, and living on the money I have, will mean that if next month me decides she wants to take a mini road trip or take an art class, she could because the next paycheck will be free to divided based on those priorities. 

I have tried the cash envelope method... but it just doesn't work well for me! I would have to go out of my way to get or deposit cash, making it super inconvenient. There's no security in cash because I can dispute charges on a card if it was stolen but if cash is stolen then I'm screwed because there's no insurance to cover that. Also, cash feels kind of analog, where as using cards and an app like YNAB ( or even checking Mint) feels more digital. It's harder to see a stack of bills and know what's there. It's easier to see a "$100" on the screen and do some quick math. At least for me... and how my brain works!

The biggest thing that made me aware of needing to get my finances together is my cat Felix (RIP). Following the Dave Ramsey method, I have been keeping a $1000 emergency fund, mostly for my dog (named the "Howland College Fund"). Last October,, Howland and I met a cute and friendly black cat at the vet who was a rescue and had been there several months without finding a home. I had always dreamed of having a cat and a dog at the same time and after a couple days of consideration, we brought Felix home. A couple months ago I was gone for the weekend and came home to Felix, acting totally normal. Then, within a few hours he suddenly became non-responsive, not moving- non-vocal, and staring into space. By the time I realized how bad he was it was about 11 pm and I took him to the animal hospital. This is where finances came in. Every choice you have to make about the care of a pet is based on the cost. This is not the same as children where they do what is needed and you figure out the cost of things afterwards ('Murica). They are upfront with "Here's plan A, it would cost X, here's plan B, it would cost Y. Here's some info about where he's at, let us know what you want to do."

Even just writing that makes my heart feel heavy. I'm glad I don't have children, making health decisions for another living being is gut wrenching. And when there's a set amount of cash in the bank that I was planning to use to pay off some debts.... I made some choices that adjusted those priorities. Even after the tests and hospital time, by the next day I had to put Felix down because he was beyond saving. Even though his eyes were open and he was breathing, he was not there. Being in that situation where the amount of money I had determined the amount of care I could give him was painful. I make an alright salary but I have been living paycheck to paycheck and even then, spending some of next month's money to get things this month. I did what I could for Felix without going into further debt (I had also just received my tax refund, so my pockets were a little more flush than usual)... but it made me aware that if something happened to Howland, my puppy who I have had for 5 years, since he was 7 weeks old... it would destroy me if I couldn't afford to take care of him if something happened. The guilt and shame of not being able to take care of him like I promised would likely drop me into a Ramen eating depression. Which meant I could start right now. I can clean up my finances so that as Howland ages, I can take proper care of him. So that I'm not forced to choose to go into deep debt if something bad happens. The bonus is that if something were to happen to me, I would have some money around to help cover the blows... but mostly I'm thinking about my dog and my duty to take care of him. 


Howland & Felix

Snuggle buddies for like 30 seconds at a time

I want future me to have options, not just in care for my puppy, but in life. To be able to choose to take a trip, or choose to take a class, or work on a project or change my life because I have a buffer... giving every dollar a job, even if that job is just to cover future me's desires, it will be much better than constantly paying for past-me's choices... most of which I don't even remember what they were... probably too many lattes. 

It's only been a week of using YNAB, but, as you can tell, I'm smitten. I can see that every purchase choice I am making is taking money from other choices. It's making me aware of how potential changes in my life would be affected by budget (moving, selling house, shacking up, not having a dog, living in a townhouse instead of a house with a yard). So many of my current expenses are related to lifestyle creep, keeping a budget should help me keep my expenses the same but increase money towards big ticket things as my earning potential increases. 

Side Note: If you are interested in traveling, long term or even sporadic long trips, I highly recommend reading the book Vagabonding by Rolf Potts. 

So... how's the decluttering going?

Budgeting is making me aware of how much I tend to spend on things, and the decluttering has me finding things I bought but don't use or haven't used. Projects bought on a whim and left to apparently never be finished. As I write this, I still have piles of art supplies that have now been carefully organized and categorized but not used. Thinking about selling the things that I don't use, that I could replace if I found a need for it down the road, has me excited for the budget potential of focusing on One Thing. Instead of buying supplies for every activity that fancies me, I could focus my spending on specific things like painting classes. I have supplies for a lot of activities, and have spent so. much. money. on things for things that past-me was into. Sewing for example. I love fabrics, finding cute ones and thinking about the colors and how they could go together but I haven't really sewn anything in months/years. So, have I been buying these supplies because I actually want to sew the things I think of or have I been buying them for the person I think I am or used to be? Decluttering paired with budgeting is really forcing me to look more closely, not at who I wish I was or who I used to be but rather who I am today. 

Now that I got that writing out of my system, time to go deal with my stuff. Sigh. I miss road tripping and living out of my car and just having what I needed and nothing more. I could see a tiny house in my future. 

A Big Change

One Thing*