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    New approach to budgeting = no clothes for awhile

    Is anyone else here familiar with and/or use You Need a Budget (YNAB) software? I just started using it and while it's revolutionizing the way I think about my money in a positive way, it also means I won't be able to buy any clothes or other discretionary items for awhile. Basically the YNAB method forces you to budget using only the money you have now, as opposed to spending based on what you think you will have at the end of the month. For example, in the past I would give myself a "budget" of $150 at the start of each month for buying clothes, music, books, and other things I enjoy. Now that I'm using YNAB, the first thing I need to do is pay off my credit card debt from last month, then put my remaining dollars towards things like food, gas, and other essentials. Only then can I start putting dollars towards "fun" things, including saving for future big purchases like a new suit, blazer, nice shoes, etc. Traditional credit card spending is based on the premise that you buy now and will pay for it later. YNAB is based on the premise that you only buy things with the money you have sitting in your checking or savings accounts right now.

    In any case, it's a good thing and empowering that I will now have more control over and understanding of where my money is coming from and going and thus can buy clothes in the future guilt-free because I know I can afford it and/or have saved for it. The downside is that I have to buckle down in the next few months and not buy ANY clothes until I have a better handle on how my income is being used. I'm almost 40 with a wife and twins so cannot just buy clothes and upgrade my wardrobe on the fly anymore.

    Just wondering if there are any other guys out there who have gone through a similar transformation and/or are dealing with the same financial issues. One negative about this as well as any other hobby involving the spending of money is that you're constantly tempted to spend due to all the bargains and sales out there. I'm just going to have to step back for awhile and ignore all the emails (Land's End, Sierra Trading Post) and posts on Dappered and Put This On about the "best" time to buy things.

    #2
    I haven't used the YNAB software, but I'm a bit meticulous when it comes to personal finance. We're in rather different situations (single 20s biglaw attorney in NYC), but I have my fair share of expenses that come rain or shine as well (student loans don't repay themselves), which keep my fun budget in check a bit. I definitely splurge on occasion more than I should, but only after I had a system in place that builds itself up---for example, direct deposits that save for retirement and set aside money for monthly loan payments before my grubby little hands see the money hit my checking account. I don't split out my fun money into categories (whether via different accounts, the envelope approach, etc.), so I feel it the most when I have to pay for flights/hotels/etc. for weddings--which I have many for close friends at my late-20s age range--and that takes away from my clothing and other fun things I'd normally spend it on.

    There are a lot of methods to revamp your finances out there, some better than others, but opinions vary... whatever works for you and gets you moving in the right direction is a right choice. Personally, I always recommend the book, "I will teach you to be rich" for those new to personal finance. It's geared toward young professionals (new to jobs and having income), but is easy to read, is not overwhelming and contains good lessons for people of any age. My favorite is with regard to budgeting, it's ok to spend on things that make you happy; just make sure you cut in other places to make sure you're living within your means.

    Note: The book is a little dated on some items (e.g., it talks about savings account interest rates that actually beat inflation), but overall the lessons still apply.
    Last edited by hornsup84; August 1, 2013, 02:28 PM. Reason: Added note

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      #3
      Matt, I hear ya, bud. I've been trying to get a stranglehold on spending recently too. It's tough when all of these sweet deals keep popping up, right? UGH! Apparently sales-marketing works.

      I have done pretty well in the past few months, but I really need to stop visiting Nordstrom Rack every - damn - week. Jeesh!

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        #4
        That is an interesting strategy, and would be very useful for someone with outstanding debt (especially CC).

        Personally, I do not have any debt. I was lucky enough to have a Dad that covered my college expenses, and I pay off my CC in full every month.

        For someone in my position, I've found Mint.com to be very useful. It's helped show me where I spend too much (food) and other areas where I'm doing well.

        My clothing expense isn't too bad. I'm normally $100-150 a month. When I'm planning on a bigger purchase, I'm a firm believer in the one-for-one (or more) rule. I won't buy something major until something expendable leaves my wardrobe. A lot of the time, the new item cost more than the sale of the earlier one, but that difference goes into my budget for the month. That helped me make great improvements in frivolous spending.

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          #5
          Matt, I also have recently started using YNAB, (our church introduced us to the software). So far I love it. I'm right there with you on the not being able to spend for a while, but whatever it takes I suppose.

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            #6
            I don't use that software, but when I used to budget a lot more carefully, I switched to using a debit card instead of a credit card for everything. Same premise - if the money isn't in your account, you can't spend it. Worked out really well for me.

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