7 Reasons Why You Should Be Using YNAB

You Need a Budget, or YNAB, is an amazing budgeting software. The basic idea of it is that you are living off last month’s income. So you’re only budgeting the money you already have, not the money you hope to have. So the money you make in July is saved in your account until August. This software encourages you to budget, not necessarily spend, every last penny you made. They call this rule: “give every dollar a job”. For example, there’s a category for Christmas. If you budget $40 in January for gifts, obviously you’re not going to buy Christmas presents in January, but that money is going to roll over into February and you can add another $40, making it $80 on so on… That money still sits in your bank account untouched, but it’s “job” is to buy Christmas present. So come December, you now have $480 to spend on gifts.

This also works for irregular bills. Personally, I use this with my electricity bill, it’s due every other month, but I set aside half every month, that way if something comes up one month, I still have half of it there, and only have to work a couple extra hours or give up something small rather than take money out of savings.

I’ve been using YNAB for about a year and it’s fantastic. My mom also signed up about seven months ago – she loves it too.

The 8 Reasons Why You Need A Budget

June Goals

As I said in my previous post, June is going to be a hectic month for me. I’m going to be spending a lot more on gas driving back and forth between my two jobs. I’m also going to be driving a lot of the other waitresses from the club home as well, however, I’ll be getting a gas allowance for that 🙂 I hope that two jobs is worth it.

I’ve got a lot I want to accomplish in June, both financially and personally.

Financially:

1. Cancel Netflix subscription – I actually have already done this, it’s summer and I’m too busy anyway
2. Walk to work when reasonable – I work mostly early mornings and nights, but in the afternoon, I can walk an hour 🙂
3. No starbucks!
4. No impulse buys – I’m usually pretty good at this, but I want to see if I can go the whole month without one
5. Save all tips – working in a cocktail bar, I’m not going to spend my tips, this is “extra” money.
6. Learn two good, cheap and healthy meals.

Personally:

1. Lose 5 lbs. – I’m trying to lose all my travelling weight, 15lbs to go!
2. Stick to my meal plan – I’ve planned out this whole week and everything’s cooked and in the fridge, I just hope it doesn’t go bad before Sunday
3. No alcohol – Except my birthday
4. Cross stitch something – I hope I have enough spare time for this
5. Write eight blog posts. (2.5 down!)

I’m finding this blog really helpful for accountability, it’s much easier to stick to the things I say to myself when I’ve written them down and told other people about it. I’ll do another post at the end of the month to recap how I did.

June Budget Report

The past two weeks have been a little crazy, I drove home for a family event and extended my hours at my job to full time.

By Tax Credits via Flickr

I’m working an average of 6 hours a day, six or seven days a week now, AND I picked up a second part-time job at a night club. I don’t start until Thursday, hopefully everything ends up working out, I’ll be working nights there and mornings at my full time job. I’m going to have to start sleeping in the afternoon if I want to keep both of them and this blog without running myself down.

In May, my only goal was to get my credit card down to a 0 balance without touching the money I had saved for tuition. And I’m happy to say I did that!
I had racked up a $530 bill in two months and I wasn’t able to pay it off completely in April. (I know this goes against EVERYTHING I said in my previous post, but having that money set aside, guaranteed to be there come September, was worth the $7.43 I paid in interest). 

How to Have Fun for Cheap

I’m terrible at sticking to my food and entertainment budget. The budgeting software I use and love (YNAB – it’s free for students or

by Kristina D.C. Hoeppner via Flickr

$6 off if you click this code) –  allows you to continuously adjust your budget throughout the month, and I always end up siphoning a little bit here and there when I go over budget. Which is a great feature when Costco has a great deal on soup or toilet paper and you end up spending a little more to stock up. But for me, I don’t like seeing my budget go over into the red, so I steal money from somewhere else to go see a movie or grab a Blizzard because I have absolutely no self control when it comes to cheesecake anything. I still end up spending the same money – but i always find myself regretting seeing that movie over a new pair of shoes I really need.

So what I’ve done is got myself a glass jar – I just washed and peeled the label off a pasta sauce jar – and filled it with cheap (or free!) ideas to do when I’m bored or craving a snack. And whatever it is, I force myself to do it for 10 minutes. – I know this always works for me when I have homework or cleaning to do, I’ll tell myself I’ll only do ten minutes and then go back to doing whatever I was doing to procrastinate completely guilt free. And I always end up finishing it. 

Easiest $50 I Ever Made

Way back when I signed up for a TD credit card, knowing that I was going to the UK in a year, so I got the TD travel rewards card, which offers 2 TD points for every $1 spent. You can redeem points in incriminates of 10,000 and every 10,000 points is worth $100.

My plan was to use my credit card in lieu of my debit card, collect points and cash them in on my way back home, and save some money there. Because I didn’t want to start spending money just to earn rewards, I didn’t check how many I had until I was ready to by my ticket back home. But TD has this thing with Expedia, and if you book through them, you can get 2 or 3 times the normal points when you book through them. I must have not read it carefully because I was convinced that you had to book through Expedia to use your points and I had found cheaper tickets through a different site. So I completely forgot about it until now.

Now that I’m back home and don’t plan on doing any travelling, I wanted to switch to a different card. After I logged onto my rewards site to see what kind of cards they had, I noticed they added a cash back feature!!

I had accumulated 28,500 points! Awesome! I just cashed in the maximum 20,000 for $50 to be credited to my credit card statement. Once I spend another $750 I’ll redeem another 10,000 for $25. This is only 0.5% cash back, once I use all these points, I’m thinking of switching cards, but I don’t want to deal with the hassle of transferring my points points or limit myself to only TD cards.

This really just made my day, as I’ve been out of work for a while now, this really couldn’t have come at a better time.

-Kayla

Emergency Savings are Costing You Hundreds!!

I don’t have an emergency savings account and never will. Neither should you.

by 401(k) 2012 via Flickr

The first step in Dave Ramsey’s financial plan is to build a $1000 emergency fund, then pay off all your debt excluding your mortgage. And this is completely stupid.

Everyone knows that the earlier you save for retirement, the more you’re going to make in interest. But what the banks conveniently forget to mention – It works the other way too. If you’re in debt, you will pay a lot less interest if you start paying it off sooner.

The average person had debt. Whether that’s credit card, a mortgage, student loan, car payment. Whatever. So, let’s look at some math.

Let’s say it takes you three months to save $1000 in your “emergency fund” so that’s $333.33/month. Now in my savings account I don’t earn interest unless the balance is over $5000. But let’s say for argument’s sake that you earn 1% interest, compounded daily. At the end of your three months, you’re bank statement will read: $1001.67. That puts you at a $1.67 gain.

Don’t get me wrong – yay for free money. But let’s say you have $8,000 worth of credit card debt. My interest rate is 19%. I’m going to lay this out in two different scenarios, the first, you continue to pay the minimum balance on your card while building your savings – Ramsey’s way. The second, you take the $333.33 you would have put in savings and added it to you CC bill – My way.

Why I’m Buying a House so Young

I find a lot of people are wondering why I want to by a house so young. I get a lot of questions like “Don’t you want to wait until you’re settled down and in a stable job?” “Why not wait until you’re married?”  “What about your masters” and even “Owning a house is too much work.”

Firstly; and most importantly: I don’t wait on men. If I meet someone, they can join me in whatever stage of life I’m in. I’m not going to put my goals on hold because having a man would make it easier. Yes – a second income would make a house more affordable, but I don’t want anyone else’s name on the title. My things and money should be mine, I don’t want to lose half of everything in a divorce or breakup. Also, this imaginary husband might not be in the same financial situation as I am, or up to his eyeballs in debt.

I’m Broke

I took last school year off to go travelling in the UK and a little bit in Europe, the plan was to spend a year working overseas,and come back right before university started in the fall. However, I quickly found out that labour standards aren’t quite as high in London as I’m used to and plans very quickly became: Blow all my savings and party everyday!! Which, I’m proud to say I did quite spectacularly. It was well worth every penny I spent, and I’d do it all over again I had enough saved for one year, but somewhere around… November? December? I noticed the Canadian dollar started to dip and I started paying $10 for a cup of coffee. My rent went from $800/ month to $1015 a month. Mid February,  I decided it was time to come home – my savings were severely depleted and the oil industry in Alberta started taking a hit. I knew it’d be tough to find a job.

So right now my financial status is less than ideal. I’ve found a part-time job that covers my expenses, but not much else.

Currently, my savings account (not including my retirement funds) has approximately $550 in it. Which is not so great, but hey, a start is a start. By the end of September 2018, I want to have $40,000 saved for a down payment on my first home. That’s only 40 months away – did I mention that I’ll also be a full-time student for the next three years? Right now it seems like an impossible goal. But thankfully, my parents are in a position that they can pay for my tuition, and my scholarships should cover my book and materials costs. I really feel with a blessing like this, that I should put the money I would have spent on my education and loans towards something more useful than clothes.

To make my goals a reality, I really need to take advantage of these summer months, when I’m not in school and stick to a tight budget. In addition to my part-time job, I need to find either a full-time position or two more part-time jobs as well. I want to be working an average of 60-70 hours a week. The way I see it, the more I’m working, the less I’m at Starbucks.

I’m doing a whole savings progress report at the beginning of June, where I’ll get into the specifics of my income, expenses and account balances.

– Kayla