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Are you tired of living paycheck to paycheck and constantly experiencing a lack of funds in your bank account? Does it always feel stressful? If you're ready to learn how I address this issue, then this is the video to watch. In less than ten minutes, I will show you how you can effectively budget using apps and techniques that you may not have tried before.
WHO
As a global DevOps contractor living in Cambridge, I was born in 1980 as an immigrant to UK. I belong to Generation Y and who loves videos on self-learning, showcasing strategies that can be used with technology.
WHY
I have experienced the challenges of financial anxiety and living paycheck to paycheck. Despite earning a million dollars in the last five years, I realized that there was something missing in my financial plan. At the age of 45, I made the decision to address this anxiety and take control of my finances.
WHAT
So, you're probably wondering how I started this journey? Well, let me show you. It all began with me binge-watching Dave Ramsey's videos. I mean, I watched so many of them. There's just so much to learn about money principles. You see, I had been following Ray Dalio and trying to understand his "How the Economic Machine Works" concept, but some parts just didn't quite connect for me. That is until I stumbled upon Dave Ramsey.
Dave Ramsey is doing the radio show for 30+ years so the video production skills caught my attention, and as I started listening to what he had to say, I realized that his approach to managing finances was exactly what I was missing. He was promoting this app called Every Dollar, and it got me interested because, to be honest, I really didn't understand what budgeting was all about. I mean, I thought I could do it in in a spreadsheet, right? It seemed like a simple concept, mostly common sense such as just spending less than what I earned. But soon, I realized that there were multiple problems behind my money managent issues.
I also do not aggre with Dave as I am a disaggrable person, for most of the public what he does would work. In my case i have to create a branch in his baby steps and move the college funds,house and the retirement out as i do not believe the goverments would be here. And i could be biased as I have experienced a military coup and that is my evidence that the retirement funds might not be there.
So, I decided to give it a shot. I installed the everydollar app. But it did not supprt the British pounds so i had to swith to the competitor YNAB app which stands for you needs a budget. Which I lhave also learned about from the emotional youtuber John Sonmez in one of his videos.
Soon I was able to connect I connected it to my bank accounts, but I couldn't quite make sense of it. It just didn't click with me. Two years ago i installed the moneydashboard it looked similar but i was getting all the red signs. In fact i was having the cashflow problems. It took me three months to figure out the basics.
As a side note, I am an IT contractor and I run a small business. Initially, I thought I could handle all aspects of my business using QuickBooks, including bookkeeping and accounting. However, I soon realized that the YNAB app offers the convenience of multiple budgeting systems that can be reset as needed.
I started using one budget for my business and another for my personal accounts. Being an IT contractor who provides business loans to myself, it was important for me to have a proper format for those loans to avoid overpaying taxes. Therefore, learning about budgeting became crucial for me.
I had to consider whether it was better to pay myself more in terms of salary or to distribute dividends. It's worth noting that accountants are not typically there to provide financial advice, but rather to ensure compliance with government regulations, such as HMRC. Understanding this reality, I realized that I needed to learn about financial matters myself.
Now, let's not forget that there were other challenges along the way. I also use QuickBooks for my business, which handles bookkeeping and accounting. Terms like forecasting and budgeting were a bit foreign to me, but I had to understand their differences. If you're an IT contractor like me, QuickBooks is great for entering invoices and expenses, and accounting helps you stay on top of taxes. On the personal side, it was a different story. I had an accountant doing my taxes, but I didn't have a budget in place. It was important for me to spend my money properly, considering things like the Volvo XC90 I bought and even understanding the PCP system. But without a budget, it became a bit of a spending frenzy and getting things for business was only an Amazon click away. That's when I realized I needed to play with the ratios, as Ramsey says. The ratios was not present without the budgetting app.
Look, I understand that it might seem daunting, especially for someone like me who is starting this journey at the age of 45. However, if you're starting at 25, you're really lucky. Now, let's discuss the true meaning of budgeting. It's about wisely managing your time and money.
You have 24 hours in a day, and through budgeting, you allocate your time to what is important. If you don't plan, you won't make any progress. Similarly, you allocate your money to different categories, ensuring it is spent in the right places. Once you master this, you will have a clear understanding of where your time and money are being utilized. Replace the keyword "money" with "story" and concentrate on developing your story.
But here's the thing, budgeting is not just about forecasting and entering numbers on a spreadsheet. That's accounting. Budgeting is a whole different process that involves understanding the steps, familiarizing yourself with the terminology, and using it correctly. While Ramsey suggests that it is 80% behavior and 20% math, I believe it goes beyond just behavior. It requires developing a rational mindset and fully embracing budgeting as part of your identity. As a quickstarter by conation, I realized that I need to continue working on my budget before making any purchasing decisions. This does not mean that I cannot start things, but rather, I should approach them with a different strategy.
Now, keep in mind that everyone's budget is going to be different. Each person has their own condition, personality, and conative style. What works for me may not work for you. For instance, my friend Kevin never really needs to budget because he's naturally frugal. However, for someone like me who enjoys problem-solving, budgeting, and monitoring my income and expenses, it is crucial. Therefore, it's a personal journey, and you have to tailor it to suit your own needs.
That being said, I want to emphasize the importance of community. Throughout my budgeting journey, Reddit became my go-to place for support and feedback from the YNAB community. If you have any questions or doubts, don't hesitate to ask on Reddit. The community there is great, and they will be more than willing to assist you. In fact, most of what I know now, and I'm still learning, I learned from Reddit. Consider utilizing a WordPress blog to document your progress and record yourself on Loom to be transparent and ask for help. Reddit is a fast and practical platform for seeking assistance.
So, if you're interested in joining me on this journey and exploring tools like YNAB as an IT contractor, I think it's definitely worth it. I'm documenting my process and sharing screenshots of my budgeting experience, as well as any questions I have, with the YNAB community. If you're an experienced YNAB user, I would greatly appreciate your help and insights. You can leave comments on YouTube or directly reach out to me on LinkedIn.
Remember, budgeting is about allocating your money to new adventures that await you. You cannot make any assignments until you have the funds. Be prepared to remove money that you don't actually have and start over if needed. It's important to version your budgets and adjust them as you progress. Budgeting is a continuous process of evolving and customizing your budget to meet your needs. Each month is a fresh start, and if you missed any steps, it's okay. Treat it as a new hand dealt in the new month and play accordingly.
So, welcome to this journey of self-learning. Budgeting may seem easy at first glance, there's a lot more to it. We'll explore these concepts together, and I encourage you to leave your questions and comments down below. Let's engage in meaningful discussions within the Reddit community of YNAB.
NEXT
And remember, it's never too late to start budgeting and take control of your finances. Let's embark on this journey together! If you are interested in learning how I use tools and tactics for self-learning, subscribe to the channel and ask your questions.
OLD TEXT
Last month I decided something important for myself. At the age of 45 I said yes, it is time to stop my anxiety.(...) Letting paycheck to paycheck did not really make sense. Do you have all the anxiety in the world and you are living paycheck to paycheck and you are feeling this stress because there is something missing with yourself? Welcome to the club of the age of 45. I made a million dollars in the last five years but I felt like there was something missing. Let's look at what was missing in this plan.
(...)
How did I start this journey? The reality is the way that I started this started watching Dave Ramsey and I started watching meaning I have been so much of Dave Ramsey's video so I might become Dave Ramsey and start better than I deserve to every sentence. So that was my reality. I was looking at these financial gurus but I never got the concept of Dave Ramsey. The reality was his video production skills were interesting. He was creating good content then I got focused on what he was saying as well.(...) He was promoting this app called Every Dollar and I was interested in the Every Dollar app. The reality I was interested in this app was because the Every Dollar app was a budgeting app and I really didn't understand what was budgeting and I thought about I could do this in PowerPoint. I could do this in spreadsheet so I thought this should be easy to forecast and be able to do it. I was just going to spend less than I had made so that was the thing but soon I realized there was not only one problem but **multiple problems **behind this problem.(...) So I gave a shot. I gave a shot of installing ynab app which I learned from John Sonmez in one of his videos. I installed it. I connected it to my bank accounts but I couldn't make that much of a sense because it just didn't click with me and then I started watching Dave Ramsey. He was talking about his own app, the Every Dollar. So I gave both a shot but the reality was Every Dollar was not supporting the British bank accounts so I moved on back to YNAB app and gave it the second chance.(...) I'm a business owner though and I thought I could do everything with QuickBooks. The reality is the good part of YNAB app is it gives you two budgeting systems or multiple budgeting systems and you can always reset those budgeting systems. I'm using one of the budgets for my business which I'm guilty which I didn't do right now but I also have a budget for the personal accounts because I'm an IT contractor. I'm giving business loans to myself and I need to make sure that I give the loans in a proper format that I don't get over tax for me to learn the budgeting is very important otherwise I will pay more money than I should to the government so that is also one of the key factors that I really need to learn how to budget it because if I increase my salary I will pay more taxes to the government but I will pay less taxes in personal assessment so I really needed to learn this process.
(...)
And don't forget there is multiple issues though such as when I do my business I do use QuickBooks. QuickBooks is for bookkeeping and accounting there is other terms that will come into play forecasting and budgeting those two terms was a little foreign to me though so I will make sure that you guys understand what is the differences between them. If you are an IT contractor like myself you are going to use QuickBooks to be able to enter your invoices for your customers and for expenses and you are going to do accounting to be able to pay your taxes so that is all about the business but for the personal side what's going to happen is I have an accountant who is doing my taxes but I didn't have a budget doing taxes all right but spending properly is also very important such as I went and bought this Volvo XC90 I want to learn this PCP system first hand then I learned that I didn't have a budget for it so that was the key parts that you have to be able to understand how much money you are making and what is the percentage that you are spending your money on should you go out to eat that's an important question I was like spending crazily because I was not playing with the ratios as the Ramsey says.
(...)
And don't be stressed though I'm at the age of 45 and I'm doing budgeting if you are doing this at the age of 25 you are very very lucky though so what is budgeting we have to understand what a budgeting concept means budgeting means you are going to budget in terms of what you are going to do every day we get this debt meaning we have 24 hours to spend if before the day we run into the budgeting. And for the day we write what we are going to spend on and we look at the day we can definitely understand we spend our time and money in the correct places so that is the critical piece we have to understand if we are spending our time and money wisely. Once we understand yes we are spending the time and money wisely it means we did budgeting if we just want to look at the future and put that onto a spreadsheet it means we are forecasting.(...) If we are paying the money to the government then we are doing accounting if we are just entering the numbers it means we are doing bookkeeping so there's all these different DSL domain specific language keywords that we have to learn so we can pay our numbers pay our taxes have in a budget and be able to save the money.
(...)
And as Dave Ramsey says it is 80% behavior 20% math but I do not fully agree with him though because all these keywords that you have to learn and be part of your vocabulary is going to take your rational side as well so I will welcome you to learn all these new keywords and be able to use them in correct places. Most of the time people don't get financial education in the school but right now there's YouTube so you have no excuse to go to the Ramsey's channel try to learn it though. YNAB has good videos try to learn it but don't forget your first budget is the hardest one to do.
(...)
And even though I'm making this video it doesn't mean I'm perfect though I'm right now trying to set up a prompter trying to make sure that I'm shooting this video properly. I am also trying to understand there are gaps though and I'm creating this video for the Reddit community of YNAB if I got the things corrected though because some of the parts I am also unsure though but it doesn't stop me creating this video and getting the comments on YouTube. I hope I get the comments on Reddit and YouTube so I fill my gaps as well so take this as a self learning journey for yourself budgeting sounds easy but it is not as easy as it looks and there's a lot of catches that we got to learn and go. So where do you start though if you go to the Dave Ramsey's route it has got seven steps and budgeting is one of them though because you will start saving $1,000 and you will start paying all of your debt. Once you are paying your debt you need to make sure that you have a budget so you can have this debt snowball method pay your smallest debt and create some kind of a motivation for yourself because as he says it is 80% behavior. I don't believe it is 80% behavior though because as I mentioned you need to learn all the keywords behind the section and have some identity around this and this identity is going to be addressing your rational side. You are going to say alright right now I am doing budgeting.
(...)
And everybody's budget is going to be different than each other what do I mean everybody's budget is going to be different than each other. Once you start budgeting you are going to realize if you're a business person it's going to be true budget if you are just a person it's going to be a single budget. I have a friend called Kevin he never needs to do any budget because he never spends any money as a principal but for myself as I'm a problem seeker I need to budget and see which money is coming in and which money is going out so it is personal though so you have to do it categorize it personally.
(...)
Having said that the personal budget is an important thing I really want to emphasize on the Reddit because the Reddit was the main place that I was able to get feedback from the vine up community. If you have got questions like myself please go ahead and ask your questions on Reddit you will get answers though because it might not be very straightforward to be able to connect all the dots ask there and try to get the help from them.
(...)
If you are not very very sure do my tactic ask your questions in the Reddit community and the community is great at least in the 2023 September I was getting all my answers and they were really helpful for me.
(...)
So what did I learn from Reddit though the main thing that I learned is this budgeting is a monthly task you cannot say I did my budget once you can do that in a spreadsheet that is forecasting what you need to do is you have to do this budget on every single month so that is what you are going to do you need to make sure everything that you do is monthly September you do one budget October you do one budget November you do another budget. You are going to learn and YNAB up is going to force you assign the money that you have and it's going to show you you don't have the money so you will enter into a semblance you are going to say okay I have all these symbols but I can't make any sense of this it means you are at the correct place you are having issues so do not give up at this stage don't give up because you can't make the numbers you might be a little bit behind so it is very very normal though if you are here you are probably behind and you are trying to find out how you can learn budgeting like myself so that is very very normal.
(...)
So what do you do on a daily basis I have the mobile app what I do is I make sure that the action goes on to here on my mobile and what I do is I daily look at my transactions and I make sure that I have categorized them once you start categorizing your transactions you are going to see that the bank accounts that you connected will automatically get assigned to your categories that is the critical part of YNAB for you to be able to connect your accounts and automatically categorize so your job will become easier and easier every time you use it but don't forget you are going to unlock other sets of problems each time you use especially in your first use case.
(...)
So the other part that I want to use the YNAB is I'm sharing this budgeting with my wife so that's also critical for you to use the same account and make sure that you guys both login and see what is going on in YNAB so you guys are both aware of this I use the Google Gmail login so that is practical for me I have the two accounts so she can see how much we are spending if you have a joint account it's even easier for you but you need to make sure that you have this integration in your family especially doing personal budgeting and you are going to start speaking and giving yourself some clues on how to use your money wisely.
(...)
YNAB has a cost so how are you going to deal with that cost you are doing on a budget you are behind but YNAB asks $80 from your $90 from you what do you need to do you need to understand that the extra money that you are spending YNAB will pay itself by you being smarter but it will take time if you start budgeting and if you get into discipline maybe you might stop using the YNAB though but if you are delegating to your partner. It means for $8 a month it is very cheap for you to be able to delegate the process to somebody else to categorize and to follow up so you are sharing the work so $8 is not that much as as long as I can do my business as well as share it with my partner.
(...)
What is the main value that you get the main value that I get is the discipline though because I see the numbers coming in I see them attaching to categories and I see them I'm over spending eating out I'm not spending enough money on my kids junior ISA so they will become waiters in the future so that's very very critical. I need to make sure I save enough money for my kids future I do not go out to eat but I saved money there so it gives me the options it's like the road not taken I didn't go out I saved money so I have another top-on-air release system because I have set my budget. How many FTJ are you getting today? Also every month starts from zero meaning you are going to always new to your budget and re-start from scratch and every month you go in you are going to of course use all the metadata home.
(...)
But don't look at it that is like definite though you are going to evolve your budget. It's a personal budget It's going to evolve and you are going to learn how to assign the money how to create the account So that is very very normal for you to learn
(...)
What else you are going to learn how to create the categories you are going to learn the Ramsey says put the Necessities on the top. I also did that as well in the beginning I didn't do that But after a while you learn that you have to put the necessities on the top and see how much you are spending on the Foot how much you are spending on the rent you are going to see everything on a top-down Approach as well as on a bottom-up approach. So you are going to say, okay I can right now rationalize how much money I'm spending
(...)
So Welcome to the journey if you guys are interested in watching me going through the tools like YNAB up for an IT contractor I really think it has value though. If you guys get the value out of this I heard the YNAB from John Sonmez. He said definitely go ahead and use it, but I want to share my process I'm sharing right now my screenshots of what I'm going through and also My questions as well to the wine app community which parts don't make sense I will add them as questions at the end. Don't be afraid create the YNAB app Create your questions ask to the community on reddit I think you guys will also get the answers But if you are somebody who is watching this and who is a seasoned wine app user, please help me with those questions I really appreciate it. You can write it on the comments or you can write them directly on LinkedIn
Assign the money you have > Wait till you got the funds
Be ready to unassign the money which you do not have > start from zero
Be ready to nuke the budget > Version it
Be ready to version the budgets with multi budgets
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Imported from rifaterdemsahin.com · 2023