Rule 1 and 2 | ynabhelp

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Prioritize

Rule 1:

Give Every Dollar a Job

You're the boss. You're El Capitan. When you get your paycheck, you plan on how to you'll use it and follow your plan. When you start giving each dollar a job, you'll become proactive.

The best way to get your bucks in a row is by organizing your budget and creating job descriptions for your money. Once that's set up, you'll decide how much you'll need for each job.

Perfect, you're ready to start budgeting! Actually, once you've done that you already started. You now need to ask yourself – and you'll be asking this question a lot – What does this money need to do before I am paid again?

We know you're already having a blast, but you can't get too ahead of yourself as you need to only budget money you have.

If you have 100 dollars, you may decide to budget $70 for groceries and $30 for gas. Stop. That's a budget. It may not be accurate, but it's with money you actually have in your account; it doesn't get any more realistic than that.

Each time it comes in, budget away, but remember to keep asking yourself that question: What does this money need to do before I am paid again?

Take those large, less-frequent expenses that make you turn straight to looking for loose change under the couch cushions and break them down into monthly chunks.

These type of expenses are called Rainy Days and consider YNAB your umbrella.

There are two types of rainy days:

Predicable Rainy Days: You know when these bills are coming up

Car Insurance: $800 every six months. Got it.
Hydro Bill: $100 every two months. Got it.
Property Taxes: $3000 a year. Got it.

Unpredictable Rainy Days: Life throws a financial curve ball you can't see coming

Care Repairs: If you own a car, it's inevitable.
Medical Bills: Hopefully you won't have many of these, but flu season is all year long.
Vet Bills: Sparky needs his check-ups, too.

The money you budget toward rainy days will be there when you need it; giving you the feeling of a magician pulling a rabbit out of a hat. When you add money to that category each month, you'll see it grow right into your budget.

You'll gain control by anticipating larger, less-frequent expenses. Gone are the days of being blindsided by bills, because you paid and left them in the rear-view mirror.