Of course, this doesn't happen overnight.

Instead, your goal is to get a month or more ahead of your finances. That means that you aren't spending money that is freshly earned.

Rule 4 is unique to YNAB in that it encourages you to age your money. That way, you start to value the process of budgeting more than the initial budget itself. Instead of thinking of your budget as permanent, view it as fluid and dynamic. That means that all budgeters need to be willing to shift and adjust their plans. Some things go according to plan, but most don't. As you move through the month, life happens. Basically, Jesse says that all budgeters have to be willing to make adjustments. If you're ever felt that you failed your budget, there's a good chance you weren't budgeting with Rule 3 in mind. Rule 3ĭon't call it overspending! Instead, Jesse Mecham suggests that a better phrase for Rule 3 is reallocation. That's why Jesse says it's key to start saving small amounts for these expenses now. Just because your vehicles are running well now, doesn't mean they always will. Despite the best efforts from essentially every store that alerts us to the holiday season months in advance, it still sneaks up on people. Jesse uses two different expenses as examples: affording Christmas and our cars. Instead, they are larger, less frequent expenses that can sneak up on us. These are not monthly expenses that most of us focus on. Jesse Mecham's second rule of budgeting is to embrace true expenses. Doing so helps get you closer to your money goals. When you follow this approach, you have to really embrace making financial tradeoffs. This rule requires users to be selective. YNAB is a zero-based budget system, which means that every dollar in your budget is allocated somewhere–it could be to spending or it could be to saving. The first rule of budgeting says that you need to give every dollar a job. In fact, some of them are totally unique to the YNAB budget approach. Before you cringe at the thought of more rules, it's important to understand that these aren't your typical money guidelines. One of the things that makes budgeting so powerful is how Jesse Mecham approaches the rules of budgeting. Jesse says the point is to say yes to what you want more of.īy reframing the act of budgeting, many people feel like their money is going further. But you may also find categories where you want to dedicate more money. Ask yourself what you want your money to do.Īs you get more clarity around your finances and your goals, you will find places where you want to trim expenses. Instead of focusing on what you have to eliminate, start from a different mindset. However, he challenges everyone to turn that belief on its head. Jesse says that people have the instinct to associate budgeting with cutting. The good news is that doesn't have to be true of budgeting either. Of course, that's not what sustainable healthy eating looks like long term. Jesse says that like dieting, people worry that there are no more treats ever. People see budgeting as a restriction, so it makes sense that they think they don't like budgets. Thanks to those conversations around budgeting, they were able to get on and stay on the same financial page. A common question they returned to is “Why are we spending our money here?” Rather than just focusing on their money, they talked about different goals and values. The power, he says, is that their budgeting conversations allowed them to think about the bigger picture. They used their budget to guide their journey as a young couple and as young parents. He also continued to have money conversations with his wife. As their family started to grow, Jesse realized that perhaps other people could benefit from his spreadsheet system as well.

He was newly married with a meager income, determined to watch his dollars.įor the first year or so of their marriage, Jesse and his wife worked from a spreadsheet to guide their finances. When Jesse Mecham first started budgeting, he started from where many people start. How Jesse Mecham Created His First Budget If you're looking to get on track this year and allow your budget to be a tool for your wealth-building success, check out this interview. Jesse Mecham is a wealth of knowledge and a family man. Why you should talk to your spouse about life instead of just numbers.How the YNAB Rules help you enjoy budgeting.

You need a budget jesse mecham