If you’ve read the article last week, you know how to why it is important to embrace your true expenses, and what they are.
Once we know about Giving Every Dollar a Job, and Embracing our True Expenses, the next rule is Roll With the Punches, which is my favorite rule, because it is what transforms YNAB from an expense tracker to a guilt and shame free budget planner, and allows your budget to fit your life, instead of trying to fit your life to your budget.
You can read the rest of the series here:
- What is YNAB
- What is the Purpose of Your Money?
- What Are True Expenses?
- Make Your Budget Fit Your Life (not the other way around)
- Aging Your Money
How does it do that? Well, with the first two rules, we are creating our budget plan. We know we need to plan for every dollar (Rule 1) and we need to plan for every expenses (Rule 2). But what do we do when life doesn’t go according to plan? Do we throw out the plan? Or do we adjust the plan to work with our new situation?
Of course we work with our new situation. Most budgeting techniques tend to fall down on this part. You might make the most perfect plan at the start of the month, but if it isn’t easy to adjust the plan as you go along, you’ll find yourself gradually abandoning the plan. And you might even feel bad, like somehow you’re “bad at budgeting”. But that’s not true. Your budget is failing you, not the other way around.
So YNAB has “Roll With the Punches”. Lets say your brother calls and says he’s unexpectedly going to be in town this weekend, could he come see you? Of course you want to have some fun with him, you don’t get to see him very often. So you plan to cook a nice dinner, and maybe you decide to surprise him with tickets to the local symphony. Maybe you have the money for the entertainment in your budget, but this special dinner is going to cost you $50 (you both sure like steak!), money that will take you over on your grocery budget. What should you do? You can just let the category go over $50, but that means that you can’t be sure you’ll have money available for your other categories (see the post on envelope budgeting for more information). So we need to find that money from somewhere else in our budget. Maybe we reduce our savings on one of our savings categories, maybe Vacations or something like that. Or we might reduce the amount in one of our variable categories, like Entertainment, or Personal Care, or something like that. Wherever we might have money that you aren’t prioritizing as highly as this time with your brother.
And that is the key to Rolling With the Punches – What are your priorities right now? Do you want the manicure or the steak dinner more? Do you need to pay your electricity or save for emergencies? We make these choices all the time, but YNAB gives you a very clear way to see those choices, while making sure we don’t get into debt trying to do everything. There are no right or wrong answers to “what is my highest priority”? There’s only the answer that aligns most closely with your values and goals.
I want to leave you with one last thought about Rule 3. Sometimes when you’re just starting out, you might think the goal is to stop needing to Roll With the Punches. You do want to stop having to move things around due to poor decision-making, or emotional spending. But I’m here to tell you that I’ve been working with YNAB for four years, and I have used Rule 3 every single month I’ve used it. You want that flexibility to change our budget, because if it is inflexible, it won’t change with your changing circumstances, which means you may abandon your budget. Budgeting isn’t here to strangle you, or tell you what you “should” do. It’s here to help you prioritize your spending. And Rule 3 helps you do it.