There are plenty of personal finance software programs available but most of them are simply too complicated for the average user. Even free budget spreadsheets found on the Internet seem to have this confusing and over-designed quality. Daily tracking of your budget is necessary for it to work, but if you have to spend more than a few minutes a day on it, chances are you won’t stick with it long term.
Live on Last Month’s Income
Several years ago I did some research on the Internet on personal finance software reviews. I was unhappy with Quicken (too overwhelming) and was instantly intrigued by a particular sentence that caught my eye: live on the previous month’s income. The program being reviewed was called “You Need a Budget”, or YNAB for short.
I’ve been using YNAB ever since and found that it has a built-in philosophy that slowly changes your perception about money. Let me explain…
Build a Savings Account for Future Expenses
I think you would agree that in general, most people live paycheck to paycheck. Income is used to cover immediate expenses, while credit cards cover anything else that gets missed, or for expenses that you simply can’t afford. In the YNAB software, as income becomes available you’ve got a choice of using it in the current month or for use the next month. You can also split the income – some for use now and the remaining for use later.
Over time, as you track your expenses and save, you can be allocating most of your present month’s income to the next month. In other words, you are living on last month’s income with extra money sitting in the bank at all times. You will most likely have to look for ways to increase your income and then change the way you spend it, but that should be part of the plan to begin with and YNAB can help you do that.
Create an Abundant State of Mind
Of course, this change in perception from lack to one of abundance will take time depending on your state of affairs and the amount of debt you have. (You may think this would be impossible in your situation, but then I thought the same thing about mine at first.)
Eventually, you’ll have sufficient savings to cover occasional expenses such as auto registration renewals and annual insurance premiums because they are planned for in advance. That is crucial in keeping your financial integrity and not rack up additional debt.
You Need a Budget is a simple personal finance manager that only takes a few minutes a day after the initial setup. Because of the forward-thinking nature of the program, there will be far less worry about making ends meet. And this can be especially reassuring while paying down debt.
Download YNAB today for a free 7-day trial and I’ll bet you’ll be just as impressed as I was!