![]() Rule Three gives you permission to adjust your budget whenever you need or want to without feeling bad about it.īeing able to change and adapt your budget when life throws you a curve ball or your priorities change is one of the key aspects of making a budget that works for you. (Although I will probably revisit Rule #2 and create a new “Clumsy Accidents” budget category.) I know I can pull that money out of other categories to cover the extra expense. So, for example, when my antsy kid falls out of his chair and ends up needing ten staples in his head, I’m able to focus on taking care of him and not stress out about paying the bill. And just like with travel, there may be delays and detours that cause you to re-route, but you’re still on track to reach your ultimate destination. You know where you want to go (your financial goals), and your budget gives you a route to get there. Most people think budgeting means pre-determining how much money you can spend in any given category and then forcing yourself to stick to that decision.īut your budget isn’t written in stone, and no matter how well-crafted you think it is, life happens. Rule Three is my favorite because it encourages you to be flexible with your budget. The third rule of YNAB is to roll with the punches. Or worse, put it on a credit card and risk going into or adding to your debt. Things like annual insurance premiums, holiday gifts, and car repairs can all catch you by surprise when you’re focused on the day-to-day.īut Rule Two can help you acknowledge these expenses and plan for them in advance.īy anticipating and budgeting for your actual expenses, you can break your savings up over time and avoid the stress and financial strain of having to find the money on short notice. You’re probably well aware of your regular recurring monthly expenses, but this rule encourages you to save for irregular and infrequent expenses as well. YNAB’s second rule is to embrace your true expenses. After all, savings goals are really just future spending goals.Īnd while it can be tempting to stock away some unassigned money (just in case), there’s another purpose behind forcing yourself to decide.īy giving every dollar a job, you ensure your money is being spent in alignment with your priorities and values. The beauty of Rule One is that you treat all your dollars the same, regardless of whether you plan to spend them now or in the future. Looking back has its uses, but if you’re trying to save money and get ahead, you need to assign some dollars to that job in your budget. YNAB’s first rule is meant to break this habit of looking back and create a new one of planning ahead. Most budgeting software functions more to track your spending, showing you where your money has already gone. The reason this is the first rule is that it helps you get intentional with your money, making sure you’re deciding where it will go before you spend it. This means that before you spend any money, you deliberately decide what to spend it on. ![]() The first rule of YNAB is to give every dollar a job. DOWNLOAD THE FREE GUIDE! Rule #1: Give Every Dollar a Job ![]()
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