How YNAB changed me.

Some of you may remember that my old car died unexpectedly last May. I didn’t have quite enough saved for the car I wanted, so I borrowed the difference.  Well, just four months later, I paid it off! WOOT!

The boring stuff -- some stats:

The Loan: After paying the loan in full, in four months, two weeks, and three days (But, who’s counting?!), I paid a total of $31.84 in interest. I could have paid for the car in full, but I was really uncomfortable with how low my category balances would get if I did.  I would have had to raid my emergency fund and probably a few other categories. My bank balances would have really plummeted.  I wanted some peace of mind. And for me, that $31.84 was worth the peace of mind.

New Car Plan:  My new-to-me car cost $11,100.  I expect prices will be higher down the road, so I’ve decided to save $15,000 for my next car, which I’ll be prepared to buy five years from today. I’ve set up my budget to save $200 a month for this first year, then $250 a month for three years, and then $300 for the last year.  I’ve made notes in YNAB indicating this in the appropriate year and month.

Another way to do this is to schedule a transaction with no amount on a specific date.  YNAB will pop a reminder transaction into the register on that date. You can delete it, but you will still see the reminder.

The Good Stuff -- My YNAB Transformation

Enough of the numbers -- here is the good stuff: I’ve been budgeting for a long time now, but I have to tell you, this car loan was an eye-opening experience for me. For the first time in a long time, I realized how much my relationship with money has changed.

YNAB has changed me.

After taking out this loan, I grew more and more uncomfortable with the debt. Even though I felt it was the right thing to do at the time, I wanted it gone as quickly as possible. Every extra dollar I could find I threw at the loan. If a little extra money came in, I made an extra payment. In September alone, I made five separate payments!

I was not always like this.

Before YNAB,...

• Debt was a given -- When I first started teaching music (back in the olden days), I decided I needed a high quality, $2,000 digital keyboard. So what did I do? I took out a loan. No one can save for that kind of expense -- that’s why God created credit cards, right?

And nine years ago, pre-YNAB, when I bought an old farmhouse which needed major renovations, I just forged ahead. Home equity line of credit and credit cards to the rescue!

• Debt was the grown up thing to do -- In 1990, I bought a brand new Mazda hatchback (You could fit anything in that car -- I loved it). I took out a five-year car loan because who has that kind of money lying around? I remember feeling like a real grownup because I finally had a new car payment.

After YNAB,...

• Ready for the Unexpected -- Now, I feel like I can save for anything. Just two weeks after my car died last May, my Macbook died -- but I didn’t have to borrow a cent, because I’d been saving for a replacement since the day I bought it. No panic. No debt. I just walked into the Apple store and got exactly what I wanted.

And last summer, when I was told my furnace would likely need to be replaced in five years, I created a new furnace category and I’ve been funding it ever since. In five years, I will be more than ready.

• My Priorities In Focus -- YNAB has helped me see what really matters to me. A year ago I started saving for an antique wood cook stove for the kitchen that I have always wanted. But I had trouble motivating myself to fund the category. I had the money, but when I weighed it against the other needs of the budget, I just wasn’t excited about it. Ultimately, I decided that I probably didn’t want (or need!) one as much as I originally thought. I moved what I had saved (not much) someplace else and deleted the category.   Maybe I’ll revisit down the road, but right now I have no regrets because my dollars ARE doing the jobs that are most important to me.

Gone are the days when I was happy I made it to the next paycheck without overdrafting. In fact, I often forget that it’s payday because I don’t need that money right away.

Budgeting didn’t just change my financial situation, it changed me.  And that change empowered me to make better decisions regarding money.  I’d love to hear from some of you.  How has YNAB changed you?