After my divorce, I decided to be better with my money. The ex and I were never very good savers and planning things very well financially. We tended to live paycheck to paycheck and when we wanted something, we never hesitated to charge it. When it came to the divorce being finalized, we both walked away being in a lot of debt to a couple of credit card companies.
And I contributed to that debt soon after the divorce was finalized by engaging in retail therapy and racking up even more debt.
I was determined to break this bad habit. Now I only had myself to rely on financially. Also my hope was to own my own home again in the future. That dream would never be realized with a credit score in the tank.
Somehow I stumbled upon YNAB and decided to try it out. What I love about this program is it’s simplicity. As soon as you receive a paycheck, you assign every dollar a job. When I get paid, I first go through and assign monetary amounts to my bills. Then I go through and assign monetary amounts to those items I want to beef up a little bit, such as my gift category (for gifts I know I need to purchase throughout the year) or the charity category. Last I go through and assign monetary amounts to some of my more fun categories. Every category I try to assign a little bit more than is needed in case something comes up and I need to “WAM” some money from one account into another. Most months I’m very successful at spending less than I make and having money left over for the next month. One of the goals in YNAB is to being able to pay for current stuff with last month’s money, meaning that you have money left over to cover for at least a month.
The two credit cards I have are essentially paid off each month because when I use them, the purchases are assigned to a category that is already funded. For instance, if I buy anything from Blick’s using my credit card, then that purchase goes under the “Creativity” category that has already been funded. It really has made a huge difference in how I look at money and my willingness to be more mindful of what I’m spending my money on each month. It’s the first time I have felt like I have control over my financial picture.
This month is the first month (in a long time) where everything has hit and no amount of “WAMMING” is going to help very much. Since my dog got ill last month, I’m having to take her in for check-ups every few weeks so they can run lab tests. This month’s credit card statement will not be paid in full next month. I also needed to help someone else over a small financial hiccup. They paid most of it back already and I know they will pay me the rest within the next couple of weeks. It’s still a hit financially though. I have to laugh though because there is such a thing as being “YNAB broke,” meaning that even though it feels like you are broke, you still have money in your account. Life before, when I was broke, it meant that I was worried that a check would bounce or I had a few dollars that I needed to make last until my next paycheck.
So yeah, while I’m stressing about the hits to my account right now, I also realize I’ve come a long way in feeling very out of control and not wanting to really look at my financial picture very much. I finally feel successful financially adulting.