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Started By
Message
I'm a YNAB geek.
Posted on 1/5/17 at 11:59 am
Posted on 1/5/17 at 11:59 am
I love YNAB. I truly believe in the system and if used properly, any schmuck can change their financial situation.
I've used the system to increase my net worth from negative (CC debt) to north of $500k in four years. The system did not do it, but it was a tool that helped get the job done.
A few months ago, I was asked to be a contriubutor/moderator in a YNAB focused group of over 20,000 users. At first, I took it seriously - trying to help average Joes and Janes make sense of zero based budgeting and the rest of the YNAB method - which is ultimately meant to build wealth.
What I have figured out in these past few months is that most people are so money stupid that I'm not sure how the entire system manages.
Some repeated examples that I have seen:
1. Paying more in annual premiums for full coverage insurance than the car is worth.
2. Buying really crappy financial products like whole life insurance and considering it an investment.
3. Being completely against mutual funds, ETFs or anything to do with the stock market.
4. Being against CDs because there is a 2 months of interest penalty on taking money out early.
5. The amount of money spent on animals is amazing. Numerous times people making under 30k household were spending $10k a year on their pets.
6. Blaming the software when they don't hit their budget. Then giving up on the whole thing because it did not work out month 1.
The latest craze is trying to convince people that Refund Anticipation Loans are a scam. But there are a ton of people that "can't wait" to get their tax refund so they sign up for these products with ridiculous fees.
There are two widely reported statistics that I worry about.
1. Almost half of Americans can't read at an eighth grade level.
2. 70 percent of Americans do not have $1000 in the bank.
Those two statistics are a good primer on why we aren't that far away from electing a socialist president. The latter was hard for me to believe, but now I believe it. People are stupid with money. Personal finance should be mandated in high school and college.
I've used the system to increase my net worth from negative (CC debt) to north of $500k in four years. The system did not do it, but it was a tool that helped get the job done.
A few months ago, I was asked to be a contriubutor/moderator in a YNAB focused group of over 20,000 users. At first, I took it seriously - trying to help average Joes and Janes make sense of zero based budgeting and the rest of the YNAB method - which is ultimately meant to build wealth.
What I have figured out in these past few months is that most people are so money stupid that I'm not sure how the entire system manages.
Some repeated examples that I have seen:
1. Paying more in annual premiums for full coverage insurance than the car is worth.
2. Buying really crappy financial products like whole life insurance and considering it an investment.
3. Being completely against mutual funds, ETFs or anything to do with the stock market.
4. Being against CDs because there is a 2 months of interest penalty on taking money out early.
5. The amount of money spent on animals is amazing. Numerous times people making under 30k household were spending $10k a year on their pets.
6. Blaming the software when they don't hit their budget. Then giving up on the whole thing because it did not work out month 1.
The latest craze is trying to convince people that Refund Anticipation Loans are a scam. But there are a ton of people that "can't wait" to get their tax refund so they sign up for these products with ridiculous fees.
There are two widely reported statistics that I worry about.
1. Almost half of Americans can't read at an eighth grade level.
2. 70 percent of Americans do not have $1000 in the bank.
Those two statistics are a good primer on why we aren't that far away from electing a socialist president. The latter was hard for me to believe, but now I believe it. People are stupid with money. Personal finance should be mandated in high school and college.
This post was edited on 1/5/17 at 12:04 pm
17
Posted on 1/5/17 at 12:13 pm to anc
I'm trying to get into it and I think making my own budget in excel would be preferable
Mostly because their import tool sucks right now and isn't connecting to my banks.
Mostly because their import tool sucks right now and isn't connecting to my banks.
Posted on 1/5/17 at 12:17 pm to anc
quote:
1. Paying more in annual premiums for full coverage insurance than the car is worth.
2. Buying really crappy financial products like whole life insurance and considering it an investment.
The worst part about these two is that they think they're being smart. Some of the other ones, it's just people acting greedily, or not considering the long term. But these folks genuinely think "I've got insurance, man, I'm being responsible!"
I would also like to discuss people who have "full coverage" on their autos and are paying out the nose for collision or whatever, but have $20K in liability.
Posted on 1/5/17 at 12:51 pm to anc
We've been using spreadsheet budgeting and the envelope system until last month. I decided to give YNAB a try. I like it so far. Dynamic budgeting, 100% visibility. Not directly on point with Dave Ramsey, but certainly consistent with good budgeting/spending principles.
I have a decent income in a low cost of living part of the country. It boggles my imagination how so many folks live in more expensive houses and drive more expensive cars than I do. I must assume many (if not most) are financing their lifestyle with tomorrow's income and headed to Chapter 7/13 or death before they get out of that debt.
I have a decent income in a low cost of living part of the country. It boggles my imagination how so many folks live in more expensive houses and drive more expensive cars than I do. I must assume many (if not most) are financing their lifestyle with tomorrow's income and headed to Chapter 7/13 or death before they get out of that debt.
Posted on 1/5/17 at 12:54 pm to Cold Cous Cous
A lot can be said for marketing, marketing in today's world is infinitely greater than it was even 20 years ago but especially pre internet.
Its very easy to sell low income people on things they can't afford, too easy really. How many people in poverty have smart phones? Its absurd.
At the same time, it has never been easier to become financially independent. Almost anyone can buy a $50,000 house and have it payed off in 5 years, a cheap car, and retire young if they want to live like people did 100 years ago. The problem is, no one wants that life anymore we are all spoiled.
Its very easy to sell low income people on things they can't afford, too easy really. How many people in poverty have smart phones? Its absurd.
At the same time, it has never been easier to become financially independent. Almost anyone can buy a $50,000 house and have it payed off in 5 years, a cheap car, and retire young if they want to live like people did 100 years ago. The problem is, no one wants that life anymore we are all spoiled.
Posted on 1/5/17 at 12:55 pm to Cold Cous Cous
That is surprising. It's seems like every time someone in my household is hit by someone, the offending party is uninsured, the car they were driving didn't belong to them, and they manage to drive off without the police even giving them a ticket.
Posted on 1/5/17 at 1:02 pm to anc
I hated YNAB. It just didn't work for me, visually at least. I downloaded an excel template from the interwebz. I went from just paying $1,000 interest/month on the med school/mba bills to $4,000/month. It really is amazing how much bullshite you can cut out of your life.
ETA: I won't disclose how much we spend on animals. Hell, I'm scared to look.
ETA: I won't disclose how much we spend on animals. Hell, I'm scared to look.
Posted on 1/5/17 at 1:03 pm to anc
I've been using YNAB for almost 2 years now. In that time I've paid off my student loans (I'd have to go back in to YNAB 4 to see how much I paid off) and saved up money to pay off my 11k car note after getting divorced in roughly a year and save up 5500 for an emergency fund and 1200 into a Roth I started recently, while making ~45k a year. I'm very, very happy with how things have gone over the last 2 years and love how much YNAB has helped me get a grip on my finances. I tell anyone who will listen about it 
Posted on 1/5/17 at 1:15 pm to TheWiz
quote:
ETA: I won't disclose how much we spend on animals. Hell, I'm scared to look.
If you can afford it, it doesnt matter.
My point was that there are a ton of people that are just getting by spending ridiculous amounts of money on pets. If you make $100k and spend $10k on them, you just have different priorities. If you make $25k and spend $10k, its part of your problem.
When you get out of the paycheck to paycheck mentality, it dominoes everything. That's what YNAB does better than any other software. It's not for everyone, but if you take the time to learn it and see how it works, it's a game changer.
However, it takes time and patience to really see it working, and the attention span of most people does not allow for it.
Posted on 1/5/17 at 1:19 pm to Ace Midnight
quote:
I have a decent income in a low cost of living part of the country. It boggles my imagination how so many folks live in more expensive houses and drive more expensive cars than I do. I must assume many (if not most) are financing their lifestyle with tomorrow's income and headed to Chapter 7/13 or death before they get out of that debt.
If you actually delve into incomes, you will find that things like median income are all that useful as a gauge of how much you make. its close to 20% of households clear 100k a year. $100k buys a lot of shite, even in expensive places.
I am not saying people don't use debt to artificially increase their income, they do. But its not like debt is exploding now, or really even recovered from implosion circa 2008.
Posted on 1/5/17 at 1:21 pm to TheWiz
quote:
ETA: I won't disclose how much we spend on animals. Hell, I'm scared to look.
we spent $600 in the last year, and that seems like a ridiculous amount to me.
Posted on 1/5/17 at 1:40 pm to anc
I use Mint for similar personal finance resources. Is YNAB basically the same thing or does it offer advantages that Mint cannot?
Posted on 1/5/17 at 1:43 pm to Hawkeye95
quote:
we spent $600 in the last year, and that seems like a ridiculous amount to me.
Oh, I'm not arguing that. I have one dog alone that takes a $2 allergy pill every day.
Posted on 1/5/17 at 2:14 pm to TheWiz
quote:
Oh, I'm not arguing that. I have one dog alone that takes a $2 allergy pill every day.
ouch. WE are down to one pet. at the end, our dog was on like 6 or 7 pills a day. At one point, our cat took over 15 medicines per day. But nothing like $2/pill.
shite adds up. Our current pet just gets B12 shots, which are cheap. and she stopped eating the expensive grain free food, so that really cut our costs.
Posted on 1/5/17 at 2:54 pm to anc
quote:Without giving personal info generally how did you do this?
to increase my net worth from negative (CC debt) to north of $500k in four years
Posted on 1/5/17 at 3:23 pm to PlanoPrivateer
quote:
Without giving personal info generally how did you do this?
Sure.
1. I got my head out of the sand, paid the stupid debt off.
2. I got on a realistic budget and started using YNAB.
3. I started learning how to invest.
4. I'm saving nearly 40 percent of my income. Compound Interest is the best thing in the world.
The 500k includes about 150k in home equity, which I know you aren't supposed to count.
Posted on 1/5/17 at 3:27 pm to anc
quote:
The 500k includes about 150k in home equity, which I know you aren't supposed to count.
you absolutely are, although you should subtract out any mortgage.
It doesnt count for calculating retirement income but it is part of your net worth. Hell, a lot of people include cars in their net worth.
Posted on 1/5/17 at 3:30 pm to anc
quote:
70 percent of Americans do not have $1000 in the bank.
I'm torn as I don't know whether to laugh or cry.
How can this be? I mean, seriously ... how can this be?
Posted on 1/5/17 at 3:32 pm to anc
quote:
Being against CDs because there is a 2 months of interest penalty on taking money out early.
I've looked at CDs before, but found ones that were 1.0% or so, and compared to the 0.7% interest Capital One 360 gives me, it just didn't seem worth the hassle. I was planning to do a $10k CD. I suppose once I am willing to put in more then it may be worth it.
quote:
spending $10k a year on their pets.
I do spend about $100/month on my lab (more during winter). Couldn't make it through duck hunting season without her. No way I would spend much more than that though.
Posted on 1/5/17 at 3:34 pm to Hawkeye95
quote:
we spent $600 in the last year, and that seems like a ridiculous amount to me.
We easily spent $4K to $5K on our dogs last year (boarding, annual check-ups, dog food, treats, unexpected veterinarian visits, etc.).
They are a part of our family and I look at it as another cost that we decided to take on when we brought them home with us.
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