- Hi, I'm Ernie. - And I'm Ben. - And this is "Budget Nerds." (upbeat music) - [Narrator] It was all in your mind. - You are not alone. - No, you are not. Welcome back to the show friends. Good to have you here for another episode. Now a long time ago, I don't know how many months, maybe it's even been years, we talked about the question, should I get a month
ahead or pay off debt? What do I prioritize first? And we thought we would
take that question, mold it a little bit, change it up a little bit and tackle it together in this episode. So, instead of debt versus month ahead, we're gonna be talking about, month ahead versus emergency fund. - Yeah. - Which one do you prioritize? The month ahead or the emergency fund? What do you think, Ben? - Up to you. I mean, I think we'll get there, but I find this interesting that this is always a big question, like where do I place
getting a month ahead in the list of priorities? Because, paying off debt, saving an emergency fund, those are all things that are common personal finance advice. But getting a month ahead is something that we at YNAB made up. I mean, I don't think, I don't really hear it
anywhere else, right? - I'd never heard about it prior to YNAB. - So, I think the question is, where does that go in
the list of priorities? So, I think we could
talk about this forever, compared to anything. I mean, I can't think of anything in particular right now, but yeah. Do I get a month ahead
or do I go on vacation? Do I get a month ahead or
do I, you know, anything? It's always that trade off. But yeah, this is really
interesting to me, because it gets more into
the mechanics of budgeting. We'll get into that, but I'm leaning more toward
getting a month ahead, rather than building like a
traditional three to six months of expenses emergency fund, right? - And I'm glad you mentioned the three to six months of expenses because yeah, that's
what we're talking about when we say emergency fund here. So, not like, you know,
$500 or a thousand dollars, like a substantial amount of money. - Yeah, the common advice of like, if you lost your job, that's what it is, man. It's an income loss, especially when you're a YNABer. I mean, we have this question of like, do we even need an emergency fund? Because if you're in a perfect world, like in an ideal YNAB universe, God willing, that would exist. (presenters laughing) Everyone's using YNAB and the cherubs are
singing, everyone's happy. All of the world's
problems have been solved. There's no poverty, no war. Anyways, in an ideal YNAB world, you would have no emergencies ever. No emergencies that you
weren't prepared for, right? Because you'd be Rule two-ing everything, you'd save for every contingency, every non-monthly expense, right? And so as you get closer to that ideal that you can never reach, it's an asymptote, the
limit does not exist, the less and less you
need an emergency fund. So, the more that you are
dialing in your true expenses, the less you need an emergency fund. So, I think the need for that
diminishes over time, right? So other goals, like getting
a month ahead might increase. - Absolutely. So mechanically, I guess we
should probably start there, of what this actually looks like in YNAB. - That's good. So, what does an emergency
fund look like in YNAB? YNAB doesn't care where your money is as far as like what account it's in. So, an emergency fund in
YNAB is just a category. It's a category called emergency fund or I like to call it prudent reserve, as you all know. - Job loss. - Yeah, job loss. - Whatever. - Whatever. It's probably gonna be one
of your largest categories where you just park a bunch of money in it and it just sits there
until you need it, right? So, and we're talking a
substantial amount of money, which might be like the three
to six months of expenses as an example. - And then the month ahead. Well, there's two ways
that you can approach that. You can actually go to the next month, allocate money there, go to the next month and keep doing that. Or you can park it in a holding category, which is what I utilize. So, right at the top of my budget, I have a category called next month and all the current
month's paychecks go there. And then at the end of the month, I release those, move
over to the next month, allocate them to the categories. - Yeah and this is Rule
Four, age your money. It's just all the money
that you make this month, you don't need for 30 days. So, you're living on last month's income. Everything you make this
month goes to next month and you just let money sit and wait. So, you have more space
for making decisions and you have a little more security. But there's also a lot
of mechanics of budgeting that get easier when you're a month ahead, especially in our framework
of envelope budgeting. When you're a month ahead, you don't have to time bills to paychecks, 'cause the money's always
everything there, right? - Everything can go on autopay. - Yes. - One less thing to think about. Oh, now I have to sign into my bank, pay the mortgage, pay the auto loan, sign into the student loan provider. No, it's all on autopay, set
up scheduled transactions, one less thing, couple less things that you have to think about in YNAB. - Yeah, because when the month starts, everything is fully funded
by the time the month starts. So yeah, it doesn't matter
when you pay the bills. I mean, I remember having to think about, okay, I need like literally
going and changing the date when a bill would come out. So I'd be like, "Well, these three bills need to come out "with the first paycheck of
the month and these three" and it's a cash flow problem, right? It's not a like, I don't have enough income
to pay my bills problem. It's a cash flow problem. It's like, I don't have
enough income right now, because my paycheck is on Friday. It's this mechanics problem. And I think so much energy goes into that. - Oh my goodness. - Instead of actually thinking about what you want your life to look like. - I don't know how common this is, but I remember when we
first bought a house, cash flow was really, really tight. But we had a grace period
of paying the mortgage. We had anywhere from the first, it was due on the first, but we had until I think the 15th. And so it was always the
first paycheck of the month that paid the mortgage. But sometimes that paycheck, would come the first Friday of the month, sometimes it would be the second Friday. And so just always having to
wait for that paycheck to land and the mortgage took up a
big chunk of that paycheck. And I remember how much
time and energy I thought or it took just thinking that through, making sure everything is lined up. It was exhausting. - Yeah, making sure you don't overdraft, not because you don't have the income, but just 'cause you might
not happen to have the money in that account at that moment. And I think it makes people get so stuck. So, there's a lot of freedom
just in getting a month ahead, let alone the extra security, because you have cash lying around, right? There's just, you don't have to worry, about mechanics of life quite as much. - Yeah. Yeah and in another mechanic, it gives you that cushion. And so you're not having
to regularly transfer money in from another account, right? Because your baseline is a lot higher than what it used to be. And it may not seem like a lot, but boy, having to sign
into your bank a lot, every week multiple times, making those transfers and
then adding the transfers, importing them into
YNAB, that takes up time. - Yeah. Yeah, so I think that they're so, and when we're comparing emergency fund or getting a month ahead, they both have the same benefit
of having cash lying around to take care of something
unexpected, right? But getting a month ahead
has an extra benefit of removing all of the
mechanics and cash flow issues that you might have if you
instead took that money and parked it in some savings account that you don't see in your budget, right? So, I don't know, Ernie, I think we're leaning pretty hard onto getting a month ahead. (presenter laughing) That's what sounds like as we talk. - Absolutely. I mean, just going back to
the debt versus a month ahead. I prioritized debt, then after that was paid off
everything but the mortgage, I got that month ahead. - Right. - And once I was that month ahead, like once I actually took the money and put it so before
the turn of the month, I could see, I have a month's worth of
expenses fully covered. Like that just did something to my soul. Like, I can't even explain it. Just life felt a little bit lighter and I was like, why didn't
I prioritize this sooner? I really should have. At the very least, I should have experimented, right? I should have just, okay, here's all this money
that I have set aside for an extra debt payment. I think at the time I was
paying off student loans, let's take half of that or all of it and put it
towards getting a month ahead and just see how it feels, like I'm not actually committing to spending any of the money
in any certain kind of way. Just putting it, allocating
it somewhere else and seeing what that feels like. - This is what's so funny about it is, guys, it doesn't even matter. (presenter laughing) Like, okay, you have $10,000, let's just pull something
outta my head, right? $10,000 sitting in a category
that you call emergency fund or you have $10,000 that
covers your expenses for next month in a budget, right? You still have $10,000 lying around, that's the point, right? So, you still have the cash
that gives you security. Where you put it in the budget, it doesn't actually matter, nearly as much as I
think we think it matters because budgets are just
made up anyway, right? (presenter laughing) - That's the funny thing. They are, they're not real. - Budgets aren't real guys. Yep. All right guys, we'll see you later. Budgets aren't real, but it's true. What's the word? It's a construct, right? It's like a social construct, but it's like a individual, it's a thing you made, right? It's not something
that's has tangible value and well it has value, but it doesn't have tangible, you can't touch it, you can't feel it, it's not real. You know what I mean? So, you can make the decision to change it and it doesn't affect anything, but that doesn't mean
it doesn't have value. It's incredibly valuable. Like all sorts of things
that ideas and structures that we construct in society
or in our personal lives, it has a lot of value, but it's not real. Like, it's not, like you're not gonna break the universe if you change your budget. (presenter laughing) And I'm speaking to myself here, Ernie, 'cause you know how hard time
I have making big changes. - Right, yeah, I'll make this change and six months later, "Hey, how we doing with that change, Ben?" (presenter laughing) - Well I'll tell you, Ernie. I made a change in my budget. I should talk about this. So, at the temporary recording this, it's middle of May, we're a little ahead on the recording. Hannah did a video, what was that name of that video? Because she's probably released like three more videos since we- - Yeah, it was the de-influencing video. - Yes, yeah. It was like budget
categories you can delete or something like that. And I think that's what the title was. I'm gonna look it up. Let's see. It was, yes, "Budget Categories You Can Delete "#de-influencing." Okay. So, she was trying to de influence us to do certain things. And the most controversial
one that is in there was delete your emergency fund, right? Because she was talking
to her husband Mark, about whether they need
a larger emergency fund or whether they need one. And they were like, wait a minute, we don't need an emergency
fund because first of all, we have all these true
expenses we've been saving for. And it sounds like what from what she was saying
at her and Mark's budget, not just one month ahead,
but two months ahead. So, if they're budgeting, if they're sitting here in April, they're budgeting into June, right? And so they have essentially
two months of expenses or not expenses income, right, saved up. That's an emergency fund, guys. (presenters laughing) Just because it's not
sitting in a category, called emergency fund. It functions the same way as an emergency. Because if they both lost their jobs, hopefully that never happens. But if that ever happened, they could grab that money from the future and bring it into today and
use it if they need to, right? - Yep. - So, you have the benefits
of an emergency fund, you don't need to also
save an emergency fund. So, I was just like, yeah, and I've been thinking about
this for literally years as I do. - Years. - Because I answer this
question all the time. People ask which one's better, right? And I'm like, it doesn't really matter. Like, it's just so silly. But I've been doing this thing where I've been a month ahead, but I've been thinking about doing that, being two months ahead. Because there's always
a weird distinction. This has always been a
thing in the community. Like what does it really
mean to be a month ahead? Because if you get a paycheck on May 31st and that paycheck finishes off June, are you really a month ahead? Because it was like, what? It's one day, right? And this was really weird when we at YNAB got paid monthly because I would be like, "Yeah, I'm a month ahead "because I got paid on May 31st, "my entire month's paycheck." And that went to June, right? So, I was like, what would happen if I just went one month further? So, I had a month's income in my emergency fund
plus like another half. So, I had like one and
a half months of income in my emergency fund, my
prudent reserve, okay? So, I took a month's income out of it and I just put that to June. This was an, okay, I'm forgetting weird with the month. So, we were sitting here in April and I watched Hannah's video and I took that money
out and I put it to June. So, May was covered and
now June is covered. So, now I'm budgeting two months ahead and the world didn't collapse
or the society didn't crumble. And I actually feel better about it. - Like instantly did you feel better? - Yeah, yes I did. Like it just felt, it felt good. Erin, one of our coworkers, the senior educator here. Yeah, she does that. She's been doing it this way for years. Budgeting an extra month ahead. And she said there's diminishing returns if you go even further, especially if your
income is really regular. It's kind of-
- Interesting. - Like, it gets a little confusing, 'cause you have to, like, if you wanna make a change, you have to like go like three
or four months in advance. - Click, click, click. - Click, click, click, yeah. I think if we had a multi-month
view it might be easier, but like the way the software
is right now it's like, it's diminishing returns. So, she's like two months ahead and don't go any further unless
you have variable income, then there might be an argument
for going further ahead. - Sure. - But yeah, so I was
talking to her about it. And yeah, it feels better. It feels more secure, even though I know in my head I have the same amount
of money in my accounts, it doesn't actually matter, right? - Yeah. Do you find yourself looking
at that money in the future? Like just to reassure
yourself it's still there. - Now you say that I'm
gonna do it right now. All right, let's do this. I'm gonna look at it, see if an emotion comes over me. - Because that's one of the reasons that I put the money
in the holding category is I like seeing it all
in the current month, because we don't have
that multi-month view. And so, yes, I could flip back and forth, but I'd just like being able to open YNAB and see here's all the money
in my accounts organized, organized for next month,
organized for this month. - Yeah, it's funny, I mean I'm looking
forward to June right now. It's May 9th, we're recording this. June is completely filled out. I haven't even gotten
a paycheck in May yet. What are my emotions? What's happening, Ernie? All right. - Because here's the thing. - I'm feeling good. All right, sorry, go ahead. - Okay, because a lot of people, they'll open up YNAB and they'll just stare at
the category balances, right? - Yes, it's happened to me right now. (presenter laughing) - Do you go to the future and stare at those balances as well? Like do you take it all in? - Yeah, I haven't until right this moment, 'cause I guess it's
been about a week or two that I've been doing this
two month ahead thing. And I'm feeling it, I wonder if I'll feel it more
when I get another paycheck 'cause we're sitting here in May, June is filled out. That feels kind of normal to me, because I've always been a month ahead. But when I get another paycheck, I'm gonna go to July and I'm
gonna drop the money there. And I feel like that's gonna
feel a little different. So, maybe I can let you know. I still have that income hold
category that we talked about. So, I've been doing the thing that you've been doing Ernie where, I hold all the money in one category and then at the end of
the month I release it. But, so I might still do
that and do it all at once, but I won't be budgeting into June. I'll be budgeting into July
and that feels different. Like, that feels baller,
you know what I mean? (presenters laughing) It feels good. Yeah and we talk about this like, I think we even have it in blogs, like try it, do you feel more secure if you have next month's
budget filled out? Or do you feel more secure if you have like a large chunk of change, sitting in one category? Like try it and see what your emotions do. 'Cause I think there are some
people that might be like, "Yeah, having 10,000 bucks
sitting in a category, "feels better than budgeting
two months ahead, right?" Which even though it might
be the same amount of money. But I don't know. I just think there's something to it. This is all talking about
getting two months ahead and if we're talking about
getting one month ahead, if you haven't done that and you have the emergency fund there, I say go do it right now. - That's what I did. - Yeah, yeah, that's right. That's what you did, that's right. - After paying off the debt, I was looking at this emergency fund and it was probably right
around a thousand dollars, so it wasn't a whole lot of money, but I was working towards
getting a month ahead and I was just assuming this
is gonna be a slow process. Like every month I'll gain $50 or maybe a couple hundred dollars and I'll get closer to that, having the full month's
worth of expenses covered. Bills and monthly bills and true expenses. But then I was like, okay, I haven't used this emergency
fund for months, right? - It feels kinda silly, yeah. - Yeah and I was comfortable with where I was at with my
true expense categories. So I'm like, "Hey, if something big happens
outside of what's available, "I can still roll with the
punches across other categories "and be fine. "And so why don't I just
delete this category; "emergency fund, take that
cash, get a month ahead." And at that time, I was putting it all in the future months. And as soon as I did that, that kind of completed the
being a full month ahead. And I was like, this is where it's at. It just, it felt totally different. - It clicked. - It clicked, it clicked. - Because, like we said, you have the same practical benefits of having more security. Well I guess it's not practical. You have the same like, emotional benefits of having the more security
'cause you have the cash, but you have more practical benefits, because you don't have
as many cash flow issues with your checking account or something, because you don't have to time paychecks to bills or anything like that. - And it just, it also felt like those dollars were actually working for me. - Oh yeah. - In the emergency fund, they were just sitting there
never really doing anything. - Well, especially 'cause you
hadn't used it for so long. - Right, which is a good thing and maybe that's what you want
your emergency fund to do, do nothing. (presenter laughing) But I dunno. - Yeah, ideally you would, right? That's, I mean, ideally you wouldn't have any emergencies, because you're saving
for true expenses anyway. - I don't know, it just felt better to
actually give an actual use to those dollars, like give them more purpose than what they currently had. So, okay, you're a month ahead. You're giving me more
stability and more flexibility. And for some reason, just taking them outta the emergency fund, it allowed those dollars
to do that for me. It's weird how that kinda works. - Yeah, it felt like it
was doing something useful. That's really interesting. Yeah so, okay, here's my
challenge for you guys. And this is just a subset
of people that are listening to this right now. There's a subset, there's some of you guys that are listening right now who are not living one month ahead. So your budget, right
today is not filled out for the current month. You're waiting on a paycheck to finish off the current month, right? Not even going into the future. So, you're not a month ahead or maybe you're close, but
you're not quite there. And you also have a big chunk of change, sitting in an emergency fund, either in a category in YNAB or on maybe on some off
budget account, okay? Just right now, like,
just pause the video, (presenter laughing) go to your budget, add the account if you need to or release that emergency fund
category to ready to assign and just budget for next month. Like, just go do it right now. Stay in the same budgeting session if you're on the web app, okay? Stay in the same budgeting session and if you hate it, just click
undo and you just undid it. You you've got nothing to lose. Go do it, go try it. See how it makes you feel, right? - Nothing to lose. Well, and the other thing you could do, like if you really can't mess
with that current budget, make a fresh start. - Okay, okay. - And then just do the same
exact allocations, right? So, you have two the same budget. - Recreate the budget, yeah. - Recreate it, right? So, eventually when
it's all said and done, you're gonna go back to that budget you currently have just the way it is. But in that fresh start budget, now you can start playing
with the numbers, right? Take the money outta the emergency fund, get a month ahead, see how it feels. - Yeah and if you don't
immediately freak out and start hyperventilating
and need to undo it, then sit with it for like two weeks or three weeks or maybe six months or maybe seven years or
10 years, I don't know. (presenter laughing) See this is what might end up happening. You're like, I'm gonna try
this out for three weeks. I'm gonna try this, and eventually it's like five years later and you haven't ever gone back, right? Try it and see how it feels. See if it like opens
something up inside of you. See if you're mechanics of
managing money get easier. See if you can automate some bills, because maybe some money that was in some off budget
account is now on your budget, so you don't have to
worry about it as much. Or maybe it's even in
your checking account. I don't know. Try it, move some money around. And if you hate it, you can always go and undo it, right? - Yep. - I remember, (presenter laughing) this is a Dave Ramsey from back, well, I don't know back in
the day, he's still doing it, but he said somebody was like calling and is like, should I pay
off my house like today, because I have the money or should I pay off all this debt? There was house in this example and they're like, go pay it off. They're like, if you hate it, you can always get a mortgage. (presenter laughing) You can always go. No, that's not always true, 'cause like you do have like, getting a mortgage is expensive, but like the point stands it's like you can undo this
action if you need to, right? - Yeah. - It's funny. But yeah, try it this, in this example, there's no banks involved. Just go do it in your
budget and see how you feel. Because remember, the budget's made up, you made it up, you can
change it however you want and see what happens. So yeah, challenging- - Here's what I'm trying in my budget. I'm trying to create a job lost fund. So, I've realized as we've been spending
tons of money lately on all these house projects
over the past couple years, I'm just watching bank balances, category balances go down, down, down. And it's making me a little bit anxious. Like, I like having a cushion. And so I'm like, okay, a job lost fund would
do a lot of good for me. So, I've created that and I thought about, do I do the two months ahead
or do I do the job loss, the emergency fund and it's all the same. It's either create a job loss category or create a next, next month
income holding category, right? So, I'm like, just makes more sense to
have the job loss fund and then just kind of see
where I go from there. I'm just kind of, let's start with a month and then see how that
feels and if I need more, let's do two months
worth of expenses, right? And just kind of keep going, until I get to where I want to be. - Yeah. And it's funny because we say, "Okay, if you have a job loss fund, "like how many months of income, "should you save in that category?" And say you say like, I'm
gonna save two months of income in my job loss category, that'd be a huge amount of money, right? That'd be a big chunk. Speaking as somebody who did experience the job
loss about this time last year, my wife lost her job. Got laid off at the end of May last year. Everything changes in that moment. Like your budget is not gonna the same. We went to a bare bones budget, we cut investing, we cut off a lot of our giving. These are like, they were big ticket items that we slash. And then we also cut off
like smaller things too, like streaming services and
we cut back on dining out, we cut all these things. And so the emergency
fund, my prudent reserve, which is really a job loss fund, that's really what it is, could stretch, like I said, we had one
and a half months of income in that category. But that could stretch, that and also some other
savings categories that we had, because we've been saving
for house renovations, all that together could stretch way beyond one and a half months. I think we had two years of runway with this like bare bones budget. Now, I wouldn't wanna live
in that budget for two years, but we could if we needed to. Luckily we didn't need to. She got another job and like
two months later, right? So it was great. But yeah, consider that too. You might even do this, make a fresh start or maybe even pull out a
spreadsheet or something and create a bare bones budget. Yeah, do that. Make a fresh start and
change your targets of like, what would be like a job loss budget. Like if I lost my job today, how would I change my budget? Make that, see what that
underfunded amount is so you can see what you would
need for a typical month and consider that. So if you say, "I want to have six months
of that bare bones budget," that that might not be the same as saying, "I need six months of income, right?" You understand what I'm saying? - Absolutely. And I haven't gone
through the difficult work of figuring that out. When I'm calculating the job lost amount, it's the amount of income for the month. And so that's gonna be, just because that gives
me more wiggle room. So I'm like, okay, more flexibility. I'm all for that. - Yeah and I think there's an argument to still do a job loss fund or you could call it an emergency fund and also be a month ahead. I mean, I still have a
prudent reserve category. It has half my monthly income in it. So, there's an argument for that, because in the moment when I lost my job, when in this terrible future
where I'm no longer doing this, which would be sad. I wouldn't want to immediately also lose, being a month ahead, if
that makes sense, right? - Yeah, absolutely. - So, the job loss fund would protect the future months money, so there's a benefit there. But if you're sitting in a place right now where having an emergency fund
or saving for emergency fund is keeping you away from the
bliss of living a month ahead of getting a month ahead on your budget, just go for it right now. You could even build that
emergency fund back up if you really want to or you could undo it at any point, right? It's all made up. So, you can try it and try it for a month and undo it if you want to go back to having a big chunk exchange
in one category, instead. Try it. Just try it right now
and see how you feel. - Big takeaways here, budgets aren't real. And the other one, it's your money, it's your life. You get to do whatever you
want with those things. And so make the budget work for you. Get creative. - Yeah. I think to end we could
talk a little bit about why are we even doing this? Like what's the real reason why we want to just have
cash lying around, right? I mean, like, why wouldn't you take that and go to Europe or something or go on a big lavish vacation,
travel the world, right? Why do we want this cash lying around? And I think it has to do
with, we want security, we want peace in our life, right? So, think about that, like what would give you peace? What would give you security? And go after that, right? Ultimately, it doesn't matter because it doesn't matter
whether you get a month ahead or whether you put that money
in an emergency fund category because you have cash lying around. Both those jobs are gonna be accomplished. Both those things are gonna
accomplish the same job, I guess I should say. I've given you more peace, giving you more security, helping you be more content, maybe helping you become
a more generous person, because you're not afraid, right? You could meet other people's needs. But also consider, maybe being a month ahead
might give you some practical, mechanical benefits as well. - Okay, so there are times
where I'm staring at the budget and I'm looking at that
next month holding category, and it really hits me that
I could spend this money. (presenter laughing) Like we could take a sweet trip. I could do a sweet home renovation, right? I could have fun with this money then just bring myself back to the place where I was kind of living
almost paycheck to paycheck. But I'm like, no. - I don't want to. - As fun as that sounds, like I love the stability it offers and also the flexibility
like that is huge. I don't think we've talked
a whole lot about that, but if something drastic were to happen, job loss or a big medical expense, right? Like I don't have to react
right there in the moment. - Yes, you have some space. - I've got time to think things through, pursue different options, make the best decision than I can, instead of just being rushed because, oh, there's no money. I need to do something right now. - Yeah, that's why cash is king, right? - Yeah. - That's why people say that, because it gives you
more time, more space. You don't have to be so reactionary, you're making decisions for yourself, instead of being batted
around by the world, you know? - Yep. - So, that's the purpose
of both these things. Ultimately, that's the purpose
of being a month ahead. That's the purpose of having
an emergency fund, right? So, focus on that and then the rest is just mechanics and nerdy fun stuff, right? (presenters laughing) Awesome. Well, I think that's all
we wanna say about this. Should we do some YNAB wins, Ernie? - Let's do it. (upbeat music) - [Narrator] It was all in your mind. - All right, YNAB wins, I have a win from Lisa
who wrote in over email. Lisa, you really know
how to start an email. This was fun. I created a spreadsheet. You already got my heart. (presenter laughing) - Win. - Guys, every problem in life can be solved by a spreadsheet. I'm just gonna put that out there. All right. Lisa said, "I created a spreadsheet "that kind of gave me a panic attack." Oh boy. She said, "It lists all
items inside the house "that would need to be
replaced at some point." Don't do this, guys. This is terrifying or maybe you should. "Think roof, appliances,
TV, furniture, et cetera. "I then listed the last time
those things were replaced, "what their life expectancy was "and the estimated replacement costs." I love this. "I then break these items
down into a monthly cost, "so I would know how much
to budget for each month "to cover these things. "There are columns that
calculate how much more life "they have remaining, if at all, "the percentage of that life there is," Lisa, I love you. "And then the column that freaked me out, "the one that figured out "how much should be put back according "to the remaining useful life. "While I don't have "that last panic-inducing
column saved away, "I now have a plan. "I know when all kinds of
things could possibly go wrong "and know how much I need
to put back every month "to get ready for those
expenses when they happen, "because we all know they will "and probably at the most inopportune time "if there wasn't a plan and
YNAB to help me get there." I love this, not only because this sounds like the nerdiest spreadsheet
ever and I just love it. - Sounds beautiful. - It sounds like a gorgeous, yeah, I wanna see this, Lisa. Lisa, if you're listening, send me like a copy of this spreadsheet. I need to see it. But yeah, not only that, but these kind of things happen. You don't have to create a spreadsheet to have this panic moment. I mean, life happens, right? And I still have this, I've been budgeting for 10 years and I still have these panic moments, either self-induced like Lisa or because something
unexpected happens, right? But then I look to the budget and I make a plan and I
immediately feel better. - Make a plan, yes. Love that. - And even if it sucks,
like even if it's a bummer, like, ugh, like I have a two, I'm looking at a $2,200
car repair right now, okay? It's a bummer, but I have a plan to take care of it. - Yep, I'm looking at a $6,500 fence. - Oof. - Not fun, but I got a plan. - Man, ridge really expensive, isn't it? (presenter laughing) Oh no. - We gotta move on. - Struck a cord, all right. Yeah, yeah. Make a plan. It makes you feel better. - My YNAB win comes from Michelle. Michelle commented on the budgeting is all about trade off's YouTube video. I don't even remember
when we did that one. That was probably a number of months ago. - It's a while. - "I wanted to share my latest YNAB win. "Earlier this year, "I was only contributing
6% to my retirement plan. "I watched a Budget Nerds episode "where Ernie suggested contributing
extra 1% every quarter." And that recommendation
I heard from Jesse. "Since I've been contributing to a Roth "and preferred to do things monthly, "I figured I'd increase my
retirement contributions "$10 a month per month. "This triggered a shift in mentality "where suddenly $10 a month
was a real meaningful amount "to contribute. "Instead of staring down "my colossal ultimate retirement goal, "my goal was to get to a
7% contribution then 8%. "I largely ignored the salary
retirement calculators. "And when I used them, "it was more for a compass "than for actual realtime instructions. "I got a job that paid more "and had better retirement
benefits, cut expenses, "and today I signed paperwork "to contribute 16% of my
pre-tax income to my retirement. "I'm not done yet, I
started contributing late, "so I have some catching up to do, "but just passing the
15% mark has been huge." - Awesome. - Congratulations, Michelle. That's incredible. And I love the approach, right? Just small little steps
forward and focus on that. Don't look at the retirement calculator. I don't do those things either. They're confusing and
they're depressing, and so. And I like what she said, like she uses them as
like a compass, right? Instead of an actual, real time, this is what you need to do. That's a smart approach. Congratulations, Michelle. - Love that, Michelle. That's great. Well, if you have a YNAB win
or if you just have a comment, you can always email us
at budgetnerds@ynab.com. Or if you're watching on YouTube, hit up the comments there. We read every single one of them and we comment and we reply
to a lot of them as well. So, please jump in there
and introduce yourself and tell us your YNAB wins. We'd love to hear it. - We'll see you again in a couple weeks. We have a really, really,
really nerdy episode, coming up next. - We do. - I think you're all gonna love it. - Oh, just tease them a little bit. That'd be good. (presenter laughing) - Until then, happy budgeting. - Happy budgeting, bye.
