If you’ve been around Six Figures Under for any length of time, you know that we budget with YNAB. We have for years! Learning the You Need a Budget methodology revolutionized the way we think of and handle our money.
I know that sounds dramatic, but it’s true.
As someone who has used, loved, and written about YNAB for years, I was planning to get the new book You Need a Budget: The Proven System for Breaking the Paycheck-to-Paycheck Cycle, Getting Out of Debt, and Living the Life You Want , written by YNAB’s creator, Jesse Mecham, and review it for you.
Apparently someone at YNAB was reading my mind, because before I bought my copy, they contacted me and asked if I would accept a free copy in exchange for writing a review on my blog! Umm yes!
To be completely honest, I was pretty sure I would like the book before I even opened it. The YNAB methodology is the smartest, most effective way we’ve found to manage our money, and I’ve heard the same from many others. Plus, Jesse has always had a way of making budgeting, a potentially dull topic, fun and entertaining.
It’s like saying, “Stephanie I know you love chocolate and peanut butter, well I made this new dessert that combines chocolate and peanut butter… try it and let me know what you think!”
So here’s my take on the YNAB book, with a little FAQ thrown in.
The short version
The thing I like most about You Need a Budget (the book) is that it focuses not just on how, but on why. Money is a tool, a resource we can use to help us get to the life we want. Of course, money itself isn’t enough, but if we have some, we should be using it in a way that aligns with our values and helps us realize our priorities. And yet, we often don’t. When the way we’re using our money doesn’t support our highest priorities, we feel financial stress and general unhappiness. I know I do.
A budget is the way you can tell your money what matters most to you, and make sure it’s working to help you accomplish those priorities. Using your priorities as the driving force behind all of your money decisions, you will learn how to use the money you actually have to help make the life you want.
Unlike other traditional budgeting advice that recommends specific percentages for various spending categories, Jesse is adamant about not telling you what to do with your money. While a one-size-fits-all budgeting template won’t work for most people, YNAB’s Four Rules teach you to design and use a budget that will work for you no matter your financial situation!
What if I already use YNAB software, do I need this book?
I know some of you have been using YNAB for years, many at my personal recommendation. If you already use the YNAB method or the YNAB software, you might wonder if the YNAB book adds anything useful.
The thing is, I’m probably not the best person to ask. Budgeting (especially YNAB-style budgeting) is my jam. I don’t get tired of talking (or reading) about all things budgeting.
If you know and use YNAB, about half the book won’t be groundbreaking new material. This is the part dedicated to teaching the four rules of YNAB. While the rules have changed a bit (at least in name) since I originally became a YNABer, if you’ve spent any time with the YNAB video trainings, this half will be a comfortable (and hopefully interesting and entertaining) review.
Even so, I think the book is very worth while. Although I eagerly participated in all of the live online classes and consider myself steeped in the YNAB methodology, reading the book gave me practical new ideas and helped me develop some of my underlying financial philosophy.
The text is peppered with personal stories and experiences of people who have learned and embraced the YNAB philosophy. I love these, especially when their situations are very different from my own.
The book goes deeper into the priorities that drive your budgeting in the first place. This includes a whole chapter about budgeting as a couple that really delves into “yours, mine, and ours” priorities. It also includes a chapter about teaching your kids to budget. We’ve struggled with effective ways to have our kids earn and learn to use their own money. We’re now making some changes directly related to this chapter to better help our kids learn to be smart with money (and make mistakes with money) while the stakes are low.
And in case you are worried that the book will be an infomercial for the YNAB budgeting platform, it’s not. The software is mentioned peripherally, but Jesse is very clear that these principles can apply to a plain old spreadsheet or even a pencil and paper budget.
Wait, you lost me at YNAB!
If you’re new to the YNAB acronym (pronounced “why-nab”), I recommend the You Need a Budget book to you without any reservation. Don’t waste time wondering. Just find a copy, read it with an open mind, and feel your paradigm shifting. This budgeting methodology will revolutionize your relationship with money. Seriously.
If there’s not money in your budget to get your own copy, go get it at your library. If they don’t have it yet, make a request that they get a copy (libraries love getting your input on what new books they should order)!
Here’s a peek at the “Four Rules” of YNAB to give you a quick overview.
1- Give Every Dollar a Job
You get to decide what you want your money to do for you. The key here is that you only assign jobs to the dollars you already have. That sounds intuitive, but it is a huge shift from traditional budgeting. This simple change in how you think about and manage your money makes all the difference!
2- Embrace Your True Expenses
Your obvious expenses are the ones that you pay each month, but your true expenses include all of those expenses that come around less frequently, whether they’re “predictable” (like twice-a-year car insurance premiums) or “unpredictable but inevitable” (like car repairs). By budgeting money to these categories a bit at a time, you can avoid the budget-breaking shock of a big bill all at once.
3- Roll with the Punches
A flexible budget is a budget success, not a failure. When your priorities change, so should your budget. Sometimes new expenses come up that you didn’t consider when you originally planned the month’s budget. If the new expense really is a better way to realize your priorities than the prior planned use of that money, you can (and should) reassign the money to do what you want it to do now.
4- Age Your Money
The longer you hold onto your money, the better. The goal here is to increase the time between when money is earned and when that same money is spent. This is where you’ll be able to get a month ahead. In fact, this rule used to be called “Live on Last Month’s Income.” Which brings me to the question…
Is there anything you didn’t like?
Actually there is!
The 4th rule used to be “Live on Last Month’s Income” which I think was more practical and powerful than the new “Age Your Money.” Under the newly titled rule, it’s still recommended to live on last month’s income, but the focus has changed from getting a month ahead to having as much of a buffer as you can manage. That doesn’t work for me.
When we reached “living on last month’s income,” we knew we had accomplished something significant, and we celebrated (and continue to celebrate years later.) It’s a lot harder for me to get excited about having “aged money” lying around. When is it aged enough? How do I know if I’ve arrived? I understand what “Age Your Money” is trying to get at; I just don’t feel it.
Maybe “Age Your Money” works splendidly for you. If so, go for it. If not, you can join me in pretending that Rule Four is still “Live on Last Month’s Income.”
The only other thing I didn’t really like was related. Rather than a traditional emergency fund, the book advocates for the idea of just aging your money more. Of course, a six-month emergency fund is practically the same thing as six-month-old money in your accounts (that is, every dollar you earn gets to sit in your account for six months before you touch it.) The section just felt a little forced.
Maybe you’ll love the book’s way of thinking. If you do, take a minute to email me or comment below and explain why. I like to think I’m open to new ideas; I just had trouble feeling this one.
Other than those two nitpicky items, I loved it. It’s an easy read, but has enough substance that I found a handful of significant new ideas I’m going to run with. In addition to the new material, revisiting the same principles in a slightly different way helped me develop a better appreciation for the “why” and re-engage with our budget with a little more intention.
Get (or win!) your own copy!
I really do think that this book is for everyone! I’m going to be lending my copy out to my local friends (feel free to ask if you’re local!).
Because I like You Need a Budget rather a lot, and I know it can be helpful for you too, I’m also giving away a couple of copies — one here (see the Rafflecopter giveaway below) and one over on Instagram (see this post on Instagram)!