Do I Have to Give EVERY Dollar a Job?

When we say give every dollar a job, we really mean every single dollar!

Let's talk Rule One of the YNAB Method: Give Every Dollar a Job. You know it (or maybe you don't yet), you love it (or you will soon), and it goes like this:

Every time you get paid, you direct all of your dollars to categories, like little digital envelopes waiting to be stuffed.

All the dollars sitting around in your savings account need a job, too—a more specific purpose than waiting for their big break. Even that last fifty dollars of your paycheck that you’re not sure what to do with needs a job (otherwise it gets hired for late-night Door Dash). Every single dollar gets employed to support the things you care about!

Why do we practice Rule One though? Is it such a big deal to leave some money unallocated? Is the universe going to come crashing down if you don’t determine what every last penny needs to do for future you? Well, no, the fabric of the space-time continuum will remain intact...

But if you don’t give EVERY dollar a job, you’re going to miss out on some of the core benefits of using the YNAB Method, at best. At worst, you just might miss the point entirely.

Why we resist giving EVERY dollar a job

If you’re one of those people who tend to leave some dollars unallocated, use a generic savings category, or leave a savings account off YNAB entirely, let me tell you... I get it. It can be hard to get all the way to zero every single time.

Every time I get a paycheck, the first jobs are easy. I obviously need to cover the basic bills first—my family needs a shelter, my kids need clothing, and we’ve got to eat. But once all the basics are covered and I squeegee down to the last few hundred dollars, the decisions get a lot less straightforward. 

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Maybe for you, it’s the last thousand dollars. Or maybe it’s the last 5 dollars. The amount is going to depend on your income and expenses. But most people get to a certain threshold where it’s really hard to decide what to do with what's left.

When you hit that wall, it feels easier in the moment to just let that money sit in Ready to Assign or a holding category. In fact, leaving some unallocated dollars either from a portion of your paycheck or in an off-YNAB savings account may even feel really good. It feels good, because you’ve already allocated those dollars in your head. Why should I allocate the money on paper when I already know what it’s for? But if you examine your thoughts on this, I think you’ll often find your thinking does not line up with reality.

Let’s say you’ve got $1,000 sitting in a savings account that has not been allocated in YNAB. You might say to yourself, I could use that money for a vacation, to cover an unexpected home repair, or even to start saving for a down payment on a new car.

Thinking this way is very common, but it’s flawed, because you just spent that money in your head three different ways. In a very emotionally powerful way, you’ve multiplied that money. You no longer have $1,000 in a savings account. You have $3,000! Wow! You just tripled your money with the power of your mind!

This is why it often feels good to leave money unallocated. Spending it multiple ways in your head multiplies it in your mind. But if you decide and write down its true purpose, all those many possibilities collapse into one.

What felt like $3,000 all of a sudden feels like $1,000, because the act of allocating forces you to face the fact that your money is scarce. Saying yes to one of these opportunities automatically means saying no to the other two. In the moment, that can be profoundly painful.

So we often resist giving EVERY dollar a job, because it allows us to avoid grappling with difficult trade-off decisions. This feels easier in the moment, but it will cause enormous money stress in the long run. Let me break down the four reasons why.

1. You’re living in false reality.

Yeah, I said it! If you give your money multiple jobs in your head, you’re deluding yourself. That’s (unfortunately) not how money works! You can only spend it once. If you don’t write down a concrete purpose for every dollar you have, you’re not embracing the scarcity of your money. 

YNAB is all about ruthlessly rooting out self-delusion, and that’s not because you’re "bad with money" or irresponsible. It’s actually because you’re wildly creative and powerful. Your mind is so amazing that it’s capable of tricking itself. We are fantastic storytellers. Our stories are so compelling that we sometimes believe the fictions we make up ourselves. 

But your mind is also honest and thoughtful. If you live in the delusion that you can spend a dollar three (or more!) times, you’ll know it. Subconsciously, you’ll know you’re deluding yourself, living a lie. And this cognitive dissonance will manifest in a whole lot of stress. It produces an insidious feeling—something is wrong. And what’s even worse is you often can’t articulate what it is.

And that’s a tragedy! Because you’ll lose the opportunity to discover something immensely important.

2. You may never determine what you want out of life.

I don’t know of any better way to uncover your true priorities than to consistently give every dollar a job. If you follow Rule One every single time you get paid, you’ll get constant practice asking and answering one of the most important questions: “What do I want out of life?”

The jobs you give your dollars are the jobs that you value most. That’s true, by definition. Every time you decide, you discover your true, ever-changing priorities. Over time, this practice will make it crystal clear what you want out of life. And once you know, you are empowered—maybe for the first time—to actually start making the future you want a reality. 

This skill will spill over into other parts of your life unrelated to money. You’ll make different choices with other finite resources, like your time, energy spent building relationships, even your health. Constantly practicing giving every dollar a job all the way to zero helps you know what you want so you can make more consistent decisions in all areas of your life. 

But if you don’t do the work to discover what you want out of life, you’ll live in constant ambiguity. And that leads me to the third problem with avoiding giving every dollar a job.

3. You lose all-powerful clarity.

If you don’t know what your true priorities are, you’ll constantly question how you spend. This leads to unproductive stress and second-guessing. If you don’t plan your spending, you’ll never know for sure if any single purchase is wise, dangerous, or even just optimal. 

You’ll constantly ask yourself, “Is this how I should be spending my money?” Without a framework to help you give a concrete answer, that nagging question becomes completely unanswerable. So you won’t answer it. You’ll just ask it—over and over again. You’ll be caught in a loop of constant ambiguity and unease. That’s just no way to live, as Jesse Mecham would say.

4. You lose control over your tradeoffs.

We’ve already talked about how avoiding giving every dollar a job means you’re not embracing the scarcity of your money. Because money is finite, saying yes to one opportunity necessarily means saying no to another. We avoid giving every dollar a job in order to avoid the tension of that decision.

But you will make that decision, one way or another. When you go to spend, you’ll make a tradeoff. But rather than making a mindful decision, you’ll make a mindless one. You’ll have no possible way of parsing out what tradeoffs you’ve already made. 

This all has to do with Rule Three: Roll with the Punches. Rule Three is my personal favorite rule, because it allows for flexibility in your plan. Here’s how it works:

Every time you spend money, check your plan. If you have the money for the purchase, go ahead and make it, no problem! 

If you don’t have the money, you have two choices. First, you could move money from a lower-priority category to cover the purchase. That means you’re saying no to one priority in order to fund another. You’ve made a conscious tradeoff decision.

Second, you can choose not to spend the money. If you take that route, you’re saying that all of your other priorities are more important than the purchase you were about to make. Again, you’ve made a conscious tradeoff decision. 

But when you spend unallocated money, you are unable to make that decision intentionally. Sure, you’re still making a tradeoff, but it’s difficult, even impossible to know what that tradeoff was. Maybe if you knew what you were giving up, you wouldn’t have made that purchase. Maybe you would! Who knows!?

But when you give every dollar a job, you plan when you’re considering everything at once and when you’re in a sound frame of mind from a crystal-clear perspective. And because you have a plan, you can consciously change it while remaining aware of the scarcity of your money. That means you’ll consistently make active decisions about tradeoffs with your eyes wide open. You’ll have control. You’ll have the power to build the life you want. *Evil villain laugh.*

Go forth and give EVERY dollar a job

So why not start now? Whether you’ve never used YNAB before or you’re a veteran YNABer who has even a teensy amount of unallocated money, go give all of it a purpose today. Have your Oprah moment with your categories as an audience!

And every time you get paid, do it again and again forever! What will you get for your efforts? You’ll live with more peace, you’ll discover what you want out of life, and you’ll gain the clarity and control to make it a reality. 

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