Pretty awesome read based on Rafi Sela’s input. He was the head of security for Ben Gurion, the world’s safest airport, and one of the most threatened, in the world.
Recently, I decided to try something new: budgeting. My friend Andrew told me about the system he’s using, YNAB. They make the principles of budgeting simple. Namely, they are:
- Give every dollar a job.
- Save for a rainy day.
- Roll with the punches.
- Live on last month’s income.
However, I wasn’t keen on paying $60 for their software. Meanwhile, Simple says that their Goals feature is great for budgeting (and free). So I decided to combine YNAB’s method with Simple’s features. It basically works like this:
- Create Goals for scheduled expenses. I mix this with scheduling checks for payments (since this causes the money to disappear from your Safe-to-Spend balance, same as putting it in a goal). Don’t forget annual or semi-annual expenses such as car registration.
- When paycheck is deposited, move every penny into Goals as necessary. This includes using Goals as digital envelopes for food and entertainment. (#1: Give every dollar a job.)
- As transactions post to your account, promptly use Spend from a goal to deduct the purchase from the appropriate goal.
- Have an Emergency goal; put money in from each paycheck. (#2: Save for a rainy day).
- Realize that you will move money between Goals on occasion. Things happen. (#3: Roll with the punches.)
- If money is left over in a goal, strive to leave it there for the next month. But still put your normal amount into the Goal each paycheck (e.g. I put $60 toward fuel each pay period, even if I have $10 left over from the previous one). This works toward YNAB’s point #4: Live on last month’s income.
Yes, using Goals this way means that Safe-to-Spend always shows as being empty, but I can easily check all my Goals from the app and see what I have available before making a purchase.
This particular combination of YNAB and Simple works fairly well. I have a gut feeling that it could use some improvement, but I’m not exactly sure how at the moment.