YNAB’s Rules (You Need A Budget) is a budgeting approach based on the financial philosophy which can be boiled down to Four Rules. These YNAB’s Rules are basic, but effective and easy to apply. In order to get a better control over the money you have, you have to let go of the paycheck-to-paycheck status of living, and start to follow your financial plan dream.

Rule 1: Give Every Dollar a Job: YNAB’s Rules

The idea: Use this money for something as soon as it is received, You should be able to know exactly what you are spending your every dollar on. if you do not know what is best to do – consult with an advisor. There must not be any arbitrary dollar, each of them must signify something in your budget.

In practice: Split your income with your expenditure. In this case, one should use YNAB’s Rules to budget for needs such as rent, food, and water bills. On the next steps, designate money in line with the YNAB Rules: for extra savings, for an emergency fund, vacation, or any fun “wants” and for paying off the debt. Just so you know, the purpose of YNAB’s Rules is to see zero dollars out of your income unwritten for.

Rule 2: Embrace Your True Expenses with YNAB’s Rules

The idea: There are so many reasons why budgeting often proves unsuccessful, primarily because no one takes actual expenses into consideration. You should focus on the ones that catch us off-guard and are infrequent but bigger ones, for example—car insurance, annual subscription fees, etc.

In practice: It means that you should use YNAB’s Rules to divide all those costs, which you face once or twice a year, into more easily manageable monthly payments. Pay $50 for your car insurance monthly so as not to be caught off guard by $600 at the close of half year. Different from the allocated budget approach, YNAB’s Rules ease out spending and leave behind the surprise element.

Rule 3: Roll With The Punches

The idea: Nobody knows what the future holds for him and it’s the same thing with money or better known as budget. This means that one can never be prepared enough for the financially unpredictable times that are sure to occur.

In practice: Adopt YNAB’s Rules by not stressing if you go overboard in one part of your budget. It is easy to re-budget at YNAB. This is all about compromise, not about getting everything right! It also tells you when you actually require an increased income in order to finance your expenditure, giving a clue for modifying the financial lifestyle.

Rule 4: Age Your Money

The idea: It is important to try to change the cycle of living from paycheck to paycheck. The aim should be to be using today’s earnings to cater for next month’s demand.

In practice: As you stick to these YNAB Rules, your money will start to get as old as your finance management plan. What I am getting at is you will have a buffer created. In the long run, the paycheck you receive today will cater for all other expenses you have for the next month. This makes a lot of financial sense when practicing on YNAB’s Rules of Money management.

Why YNAB’s Rules Work

YNAB’s Rules force you to:

Be proactive: This is because when using YNAB, you are proactive with your money, and making decisions based on the Rules instead of your available balances.

Be proactive: YNAB breaks down the way you handle your cash into a set of straightforward, decision-based on the Rules, rather than dictating your behaviour to correspond to the amount of money you have in your bank account.

Be aware: When personal budgeting according to Rules of YNAB, you get a better idea about how you are actually spending your money.

Getting Started with YNAB and YNAB’s Rules

Ready to try YNAB’s Rules? YNAB comes with a 34-day free trial and lots of resources that can help you to start to budget effectively. Their website and community are helpful. Stick to YNAB’s Rules Stay loyal to YNAB’s Rules and let the result change your financial life. It will not be magic, but it will be an empowering event!