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No Spend Days

As of late I have not been maintaining my "no spend" days. When I did do the "no spend" days I would put the money into My emergency fund and try to reach my goal of 5000.00 dollars

Well, along came YNAB, which was sugggested by my fellow blogger Maria at Life Goes On...... YNAB is shor for You Need a Budget, and it is a software program that helps to organize your money AND to eventually build up one month's of income that will alway be on hand.

The following is an explanation from the YNAB website....

"The concept of living on last month's income is critical to understand, and something I want you to be working toward. If you don't spend January's income until February, what are you spending in January? I highly recommend You save one month's expenses in your checking account as soon as possible!

Can I Use YNAB Before I Have One Month's Expenses?
Absolutely. I discuss how you use YNAB without one month's expenses in the setup guide. As you begin following Rules Two, Three, and Four of YNAB, you'll notice that you have more money. Some people call it magic, I just call it good ol' fashioned budgeting. With that increased awareness of your spending you will find the cash necessary to build one month's expenses in no time.

With one month's expenses saved you'll notice you:

Are less stressed about money
Can handle small financial storms without anything sinking
Will make better financial decisions (because you won't be as pressured)
Will no no longer be living paycheck to paycheck
Strive toward Rule One! You're going to have to begin doing something different or things will just stay the same."

Anyway, I am "striving" to build up one month of expenses to always have on hand or in reserve. For me that amount will be about 2600.00. Now I am no where near that number, but I do want to reach that goal of not living from paycheck to paycheck. I think it will be a great peace of mind for me.

So, do you think that cushion amount of one month's expenses can be counted towards my emergency fund total? Hmmmm... I would almost think so. But I don't know for sure.

So the no spend days are on hiatus.


lndsymaria said...

I'm going to have to say yes and no on your YNAB question.
Here's what I think after being on it for an entire year:
Yes- it can count towards your Emergency Fund in regards to one area- Lost income. If you were to suddenly lose your job, you would still have one month in your account and could get by for that long.

No- Because in order for YNAB to be completely effective, you mustnt draw from it except for budgeting.

Technically YNAB creates a one month buffer in your account. You would never see your account at zero unless you stopped receiving bi-weekly/monthly payroll deposits.

As for me- I technically have $4500 in actual cash. ($3500 for monthly expenses- this includes absolutely everything even debt repayment- and then the $1K in my ING Savings)

If I were you I would work on the one month's worth of expenses as separate than your emergency fund. Kind of daunting but there are alot more benefits of living on last month's income than just keeping money in a savings account. I like the fact that I dont live from paycheck to paycheck but yes, I did have to take out the last $3500 out of my savings to get there.

Hope I havent lost you! I was wondering if you were using it like Jesse suggests or trying to accumulate.

lndsymaria said...

On another note- part of me wants to take that $4500 and throw it at my debt but I dont know if I would know how to budget any other way now that I'm on YNAB. LOL

Missy said...

Hi Maria,

Thanks for your insight to YNAB again. I am trying to accumulate the one month buffer on my own. For now.

That does not mean I wont pull some out of savings to "jump start" the one month savings.

The new job will have some overtime and I will try to use that.

And right now I am still adjusting my "catagories" and the amount that they are alloted.

I am finding that what I thought was an adequate amount for me to spend is not always enough.

The budget has only been going on seriously since Jan 1. I have sort used it since Nov.

Anyway, I will be keeping the buffer seperate and will slowly build the emergency fund.

Thanks for your input Maria. I really appreciate it.

lndsymaria said...

Now that I've had a chance to think about it, this topic has inspired a post! Thanks!