Since I’ve just taught myself very little about having a blog, I really have no clue what I’m doing. If you get here, please go to my new, better, flashier site – https://www.tonfire.com – to read about my shenanigans. THANKS!
So…Hubs and I were supposed to have a budget meeting last night to set up a brand new budget in YNAB. Wellllll it didn’t happen. Mainly because Hubs has a man cold. Is that sexist? He’s a man, he has a cold. I feel “man cold” is a reasonable way to refer to it. If you make any other assumptions based on this term, it’s not my problem, right?
ANYWAY, I mentioned “budget meeting” while he was laying on the couch watching Youtube. I got the dirtiest of the dirty looks. And this is a man who is pretty good at not looking too annoyed. The thought of a budget meeting during man-cold season just pushed his facial muscles over the edge. They couldn’t maintain their usual composure.
Long story short, it didn’t happen. There are still 10 days left in my YNAB trial subscription. I want to make the most of it before taking the plunge. I’m going to try for Saturday night. That seems like a fun thing every couple should do on a Saturday night! Honestly babysitting is insanely expensive these days, so it behooves me to stay home anyway, for budgetary reasons.
In closing, I want to introduce you to a rather famous post in the FIRE world made by Mr. Money Mustache. It’s called “The Shockingly Simple Math Behind Early Retirement“. It was recommended to me via the ChooseFI podcast (Thanks guys!) Anyway, if you are interested in becoming financially independent, and you haven’t read it, READ IT. NOW. You’re welcome.
Last week, I scheduled an official budget meeting with my significant other. Hubs HATES all things relating to budgets. Especially a budget that regulates his personal spending. However, I find it helps if you have tea and cookies…maybe bake your significant other a special treat to entice them to the budgeting table. ALSO have a comfortable place to sit for both of you in front of a computer. Make it as APPEALING as possible!
The first budget meeting went “OK”. My main goals were to 1) introduce the YNAB tool, and 2) identify spending priorities for the next 3 months. Although he liked the idea of YNAB, he felt overwhelmed by it and uninvolved in the birth of our YNAB budget (which he 100% was, I did it all myself in my extreme budgeting excitement). When I suggested we could use it together, he said “But I get the impression that you like to control it all”. Which is probably true, however not the right way to go about things. SO, I dispelled the “myth” and we moved on.
A great feature of YNAB is you can have more than one budget. I scheduled another budget meeting this week where we will build a budget in YNAB from scratch so he can hopefully get a better feel for the tool, and not feel overwhelmed. My plan is to have him physically do the work, and I will just sit there to answer questions. Hopefully I can keep my mouth shut 😛 Good luck out there, FIRE chasers!
One thing that YNAB is good at is making you obsessed with budgeting. I am in there literally 10 times a day. I must say the web version seems much more user friendly than the app, though this could be my inexperience talking. Regardless, it really works to laser focus your budget efforts. Dare I say it, adjusting budget values and categorizing transactions is kind of fun. I get excited when i see there are transactions to import. I think I may be getting old.
Things are starting to become painfully clear with regards to HOW we are spending money. Yes, we have too much discretionary spending. What’s worse is that EVERY paycheck period (2 weeks for us) we spend money we don’t have on the MasterCard, then pay it off two weeks later. Essentially we are spending 2+ weeks beyond our actual income.
WHY do we put literally all the things possible on credit? Well this was a great brainstorm I had a several years ago. The plan was to put as much as possible on credit rack up the frequent flyer miles/store points/cash back (cash back is our current reward of choice). Of course the Hubs was totally on board (“Free stuff? Sure honey!”) so we began the journey to collect all the miles etc we could while (theoretically) paying the card off every time the paychecks came in. Sounds kind of dangerous, doesn’t it?
SOMEHOW along the journey, we started spending beyond what income would allow. This was noticeable when I had to pay off the last bit of the credit card bill with our line of credit. Then I’d have a stern family budget meeting where we needed to cut back our spending ASAP! OR ELSE! It would be fine again for awhile, and then we’d end up doing it again a few months later.
The current situation. UGH.
We’ve now overspent to the point where the bill racks up even before we are paid, thereby money is spent before we earn it. YNAB opened my eyes to this reality. This is something I plan to correct with the help of YNAB (yes, I’m pretty much sold on it right now…just need to finish my trial to make 100% sure). I need to somehow save/make about $3000 to get us to a point where we are only spending money WHEN WE HAVE IT. Blah.
Additionally we’re about to take on about 7k of debt on our line of credit due to the need to upgrade our home heating system (this will pay for itself eventually over the long term – heat pumps – they are the bomb, people! But, it will take years).
So, the plan is to spend some time this week to think about how we can get ourselves out of the 3k credit shuffle, while also budgeting money to pay off the heat pumps. I even scheduled another budget meeting with the Hubs to get the team focused on the goal. If you’ve read this until the end, thanks for sticking with it, and please feel free to leave your comments or questions below! Can’t wait to get one step closer to FIRE!
This week, my efforts are focused on getting a handle on my expenses. Simply identifying them and following a budget to try to reduce discretionary spending. I felt like this was a priority to achieve FIRE.
My friend recently introduced me to a tool she was using called YNAB – WORST name ever, but it stands for “You Need A Budget”. Which I do. HA! Anyway, I decided to sign up for a trial account at YNAB.com. So far, I’ve been using YNAB religiously for 2+ weeks, and it’s going very well. I feel I have much better awareness of where my money is going (and where it’s being wasted on lower priority things).
A few lessons learned so far…
YNAB is based on the solid principle of budgeting and spending ONLY THE MONEY YOU HAVE. If you are anything like my family, you are spending beyond your means. This has been a hard pill for me to swallow. But also, one of my best realizations. I’m keen on getting free stuff so Hubs and I put EVERYTHING on the credit card to get cash back. Turns out we are spending ALL of that money before we make it. Essentially we are always a paycheck behind. I hope to change that by managing it YNAB-like.
Another lesson learned – the number one principle of YNAB is to give every dollar a job. An easy concept but I just was not at all organized in that area. My Excel spreadsheet budget just doesn’t know how to do this. YNAB is built in such a way that you are forced to job-ify your dollars, which really helps you understand where your money is going and where you WANT it to go. The ultimate goal is to have no dollars to budget every time you get paid.
Of course, this does not mean you are spending every dollar! A percentage of these dollars are going to expenses, but I also have categories for new car savings, emergency savings, and retirement savings. Those dollars have very special jobs!
Lesson learned #3 – YNAB is more than just web-based budgeting software. There are tons of videos, articles, and live workshops to help you manage your personal finances that come with your subscription. During my free trial period I’m making the most of these (albeit I’ve gotten to it a bit late in the game). By the end of my trial, I will be jobbing my dollars like nobody’s business.
I’m still on the fence about shelling out the cash for the yearly subscription to YNAB, but YNAB claims that “On average, new budgeters save $600 by month two and more than $6,000 the first year! Pretty solid return on investment.” For REALS YNAB?? I am curious how they measure this exactly, or how I will. Anyway, it’s looking good that I might give it a shot for a year to see if it’s saving me the big bux.
YNAB charges $83.99 for an annual subscription in 2018, with a free trial of 34 days to ensure you love it before you buy. A great service if you ask me! 17 days left in my trial period allows me time to evaluate fully. Watch for a follow up in the future on my YNAB experience and whether or not I took the plunge!
What’s FIRE you say? Not just hot stuff. Financial Independence, Retire Early. I recently heard about this philosophy from my neighbor who sold her big house in suburbia and moved to a small house in suburbia with a rental in the basement in order to achieve FIRE. In 7 years. This young woman is setting herself and her husband up to retire in 7 YEARS. She is in her 30s.
Needless to say, I was inspired. I’m dreaming of getting out of the rat race more and more. Why? I want more time for family and friends. More time to pursue artistic endeavors. More time to travel. More time to Netflix and Chill. And, probably some other things.
I began researching about principles of FIRE. fortunately there are lots of blogs and articles providing the details about various strategies you can use to achieve FIRE.
To give credit where credit is due, the FIRE-storm all started with the book “Your Money or Your Life,” by Vicki Robin and Joe Dominguez. The book was written in 1994 (check this). It’s really not a new idea, but it seems to be catching on in recent years, and for good reason. There are plenty of FIRE success stories out there, and they are truly inspiring.
After a bit of research, I now realize there are 2 things I need to do to achieve the goal – one, reduce expenses. Two, increase income.
This blog will be to document my journey to FIRE – the successes and the failures! I hope you will stick with me and hopefully pick up some small tip that will benefit your life in a positive way. I also look forward to you sharing your successes in the comments so that I may learn from you. Thanks!