In years past, one of the major symptoms of a hypomanic episode for me was excessive spending. My hypomanic episodes usually came after an extended period of depression. Perhaps it's the other way around, but I'm not sure it really matters. The point is that I'd feel depressed for a very long time, then it's as if I woke from a long sleep and the world was bright, shiny and new again. I wanted to jump out in it and make up for all the time I'd lost. So of course, I'd need a new wardrobe. Not a few new things, but an entire wardrobe - even new pajamas. Then I'd convince myself that I needed to spruce up my home, so maybe I'd buy new furniture or home furnishings. I think it wasn't so much about what I was buying, but about the fact that I was taking control, taking charge of my life, making positive changes, doing something big and bright to overcompensate for those long periods of darkness.
The problem was that I couldn't afford these spending sprees, but there was always a handy little piece of plastic nearby. The bad news is that I'd inevitably run them all up to the limit during these splurges. The good news is that thankfully, my credit limits weren't so high as to bury me in debt - although I came close a few times. It's really sad to spend years paying off things that you don't even have anymore. But that's exactly what I did.
I knew that I needed to make a budget and stick to it. This sounds like simple advice, and maybe it is, for some people. But not for me. Sure, I'd start with great plans, and it would work for a short time, but I could never make it stick. I tried several software packages, tried doing it myself on paper and on my computer, but nothing seemed to work. Then, about 8 months ago, I found a piece of software that literally saved my financial life.
It's called You Need A Budget. I know, kind of a ridiculously simplistic name for an amazing piece of software, but it really is amazing. I liked it when I started with the original version which was a fancy Excel spreadsheet, but after a few months, they came out with a free-standing application which is absolutely awesome! It is only $39.95, and it was money very well-spent.
It has all of the things you'd expect in a personal budgeting software program - a register to record expenditures, a monthly budget planner, a way to see if you're over or under your budget for the week, and even a way to automate recurring expenditures. But the beauty in this simple system is that it goes well beyond that and fundamentally changes the way you approach the budgeting process, and I think therein lies the reason that it works.
First, it forces you out of the habit of living paycheck to paycheck. No matter how much money I was making, I was always one paycheck away from financial disaster. If I knew that I got paid on the 1st and the 15th of the month, I'd figure out which bills to pay with the first check and which bills to pay with the second check. This usually worked, for the most part, until a big expenditure popped up, like they always do. Whenever it was time to pay homeowners or auto insurance, an unexpected medical bill, or a tax bill, it would take months of robbing Peter to pay Paul before I was back on track.
Not so with YNAB. The system is set-up to "force" you to work one month ahead. In other words, the money you make this month is used to pay next month's bills when they're due. This may not sound like a big deal, but in reality it's HUGE. Before, I always found myself trying to figure out which bills I'm going to pay with the paycheck I just got, and hoping all the time that the check came before those bills were due. Now, at the beginning of the new month, I already have all the money that I'm going to have to pay that month's bills, so I can pay all of my bills for the month on Day 1. Of course, not all of the bills have come in by then, but I know what I've budgeted to spend on them, so I can write those checks when they come in. Admittedly, this took some getting used to, but it has revolutionized my relationship with my money. Finally I feel like I have some control over it, not the other way around.
The second fundamental paradigm shift that YNAB uses is the concept of zero-based budgeting. No matter how much you have available to spend in a given month, you allocate all of it, every single dollar and cent, to a category (which you define). This does not mean that you have to spend every cent, it just means you have to prioritize where you want it spent. Don't worry, all budgets are living, breathing documents, and you can change your priorities at any time. The point is that you're constantly making choices, rather than reacting as things come up.
Why is this such a big deal? Take those pesky auto insurance bills that I pay every six months. Instead of trying to figure out which bill not to pay for those two months each year, now I figure out what the semi-annual bill is, divide that number by 6, and "set-aside" 1/6 of the semi-annual payment each month so that when the payment is due - viola - the money is there! I do the same thing with savings, my vacation fund (which I wish was much bigger), my self-employment taxes, and even auto repairs. Imagine the relief knowing that the money will be there when I need it.
I also discovered another unintended benefit. It annoyed me at first to discover that because there was money being put aside (I call it forced savings) that was allocated but not yet spent, my YNAB budget balance at the end of the month was always $0, but my bank statement never was. The two never match anymore, which takes some getting used to. But the good news is that because there is always that extra money there that I've set aside for some future expenditure, if there were a major emergency and I needed the money, it's there. And of course, I know longer worry about accidently overdrawing on my account because that cushion is always there.
If you're interested in learning more about YNAB, visit their website here
The problem was that I couldn't afford these spending sprees, but there was always a handy little piece of plastic nearby. The bad news is that I'd inevitably run them all up to the limit during these splurges. The good news is that thankfully, my credit limits weren't so high as to bury me in debt - although I came close a few times. It's really sad to spend years paying off things that you don't even have anymore. But that's exactly what I did.
I knew that I needed to make a budget and stick to it. This sounds like simple advice, and maybe it is, for some people. But not for me. Sure, I'd start with great plans, and it would work for a short time, but I could never make it stick. I tried several software packages, tried doing it myself on paper and on my computer, but nothing seemed to work. Then, about 8 months ago, I found a piece of software that literally saved my financial life.
It's called You Need A Budget. I know, kind of a ridiculously simplistic name for an amazing piece of software, but it really is amazing. I liked it when I started with the original version which was a fancy Excel spreadsheet, but after a few months, they came out with a free-standing application which is absolutely awesome! It is only $39.95, and it was money very well-spent.
It has all of the things you'd expect in a personal budgeting software program - a register to record expenditures, a monthly budget planner, a way to see if you're over or under your budget for the week, and even a way to automate recurring expenditures. But the beauty in this simple system is that it goes well beyond that and fundamentally changes the way you approach the budgeting process, and I think therein lies the reason that it works.
First, it forces you out of the habit of living paycheck to paycheck. No matter how much money I was making, I was always one paycheck away from financial disaster. If I knew that I got paid on the 1st and the 15th of the month, I'd figure out which bills to pay with the first check and which bills to pay with the second check. This usually worked, for the most part, until a big expenditure popped up, like they always do. Whenever it was time to pay homeowners or auto insurance, an unexpected medical bill, or a tax bill, it would take months of robbing Peter to pay Paul before I was back on track.
Not so with YNAB. The system is set-up to "force" you to work one month ahead. In other words, the money you make this month is used to pay next month's bills when they're due. This may not sound like a big deal, but in reality it's HUGE. Before, I always found myself trying to figure out which bills I'm going to pay with the paycheck I just got, and hoping all the time that the check came before those bills were due. Now, at the beginning of the new month, I already have all the money that I'm going to have to pay that month's bills, so I can pay all of my bills for the month on Day 1. Of course, not all of the bills have come in by then, but I know what I've budgeted to spend on them, so I can write those checks when they come in. Admittedly, this took some getting used to, but it has revolutionized my relationship with my money. Finally I feel like I have some control over it, not the other way around.
The second fundamental paradigm shift that YNAB uses is the concept of zero-based budgeting. No matter how much you have available to spend in a given month, you allocate all of it, every single dollar and cent, to a category (which you define). This does not mean that you have to spend every cent, it just means you have to prioritize where you want it spent. Don't worry, all budgets are living, breathing documents, and you can change your priorities at any time. The point is that you're constantly making choices, rather than reacting as things come up.
Why is this such a big deal? Take those pesky auto insurance bills that I pay every six months. Instead of trying to figure out which bill not to pay for those two months each year, now I figure out what the semi-annual bill is, divide that number by 6, and "set-aside" 1/6 of the semi-annual payment each month so that when the payment is due - viola - the money is there! I do the same thing with savings, my vacation fund (which I wish was much bigger), my self-employment taxes, and even auto repairs. Imagine the relief knowing that the money will be there when I need it.
I also discovered another unintended benefit. It annoyed me at first to discover that because there was money being put aside (I call it forced savings) that was allocated but not yet spent, my YNAB budget balance at the end of the month was always $0, but my bank statement never was. The two never match anymore, which takes some getting used to. But the good news is that because there is always that extra money there that I've set aside for some future expenditure, if there were a major emergency and I needed the money, it's there. And of course, I know longer worry about accidently overdrawing on my account because that cushion is always there.
If you're interested in learning more about YNAB, visit their website here
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