YNAB methodology for managing money is extremely effective as it allows me to be be more proactive with budgeting and spending. It lets me know how much money I have and how much money I can spend on any given category. I find this proactive approach in dealing with money very freeing and powerful.
I assign the budgets for the categories at the beginning of each month and am strict with adhering to the budgets. If there is no budget left for eating out, I don't eat out.
I have few Income categories where all the money I 'receive' come from:
All the money in my 'Income' I have to budget. Which I do as follows:
There is a
Save category group above and in there, there is
Save category itself which basically acts as my savings account.
I then spread the remaining money I have into categories and am taking money from
Save as necessary.
Save category group can also include new categories for big purchases I want to save up to (i.e. Tesla). I strive to always have at least 600 inside my
Save category in case of emergencies.
Bills category gets updated at the start of every month and it includes my recurring subscription costs. Such as Rent, my phone provider or some software services.
I use Bobby iOS app to track my ongoing subscriptions. I review it at the start of every month and update the
Bills category of my budget and reassess the subscription costs I have so I can cut down on unnecessary expenses. Here is how it looks for me:
Actual will also soon let you automate setting of budgets in the future so that some of my categories like Food will have a fixed budget every month.
I also use N26 as my online bank which I love.
FI is possible everywhere. The idea stays the same, save more than you spend, try generate passive income through stocks, dividends and property.
I think most people are going to mention credit cards in some way, but for me, it was how my actual bank accounts don't matter. It doesn't matter if I have $X in my savings and $Y in my checking account. I have $(X+Y) to budget and I need to budget $X for an emergency fund.
Also, having $Z left over after budgeting doesn't mean I have $Z to blow. I have $Z to budget for next month since I already budgeted for my frivolous spending. That doesn't mean I don't just move $Z to something frivolous anyways.
It's a different way of thinking about budgeting. It's an envelope system. You have a pile of dollars (real dollars - these are all the dollars you own, right now, in your accounts), and a pile of envelopes. You begin stuffing dollar bills into envelopes - some into the bills coming due before you get paid again, some for groceries until you get paid again, some for gas until you get paid again, and with the smaller pile of dollars after those needs are taken care of, you begin to stuff dollars into your True Expenses - things like Car Maintenance, Insurance Payment, etc. When you run out of dollars, you STOP.
You stop, because you can't put imaginary dollars into envelopes.
YNAB is all about the now - about giving jobs to the money you have. Not to the money you might have later on. It is a different way of thinking, but once you make that mental shift, it comes clear and works beautifully.