YNAB is an online software tool that imports transactions from all your financial accounts allowing you to categorize your spending and subsequently budget against each category.
Plenty of times we overspent on eating out or spoiled the kids, or whatever in a given month, but that just meant we would cover the overage from money already budgeted in another category. But most importantly to me, I had broken down our spending so granularly that I never, ever, ever had a surprise expense come up that I didn’t have money to cover. We paid off our credit card balances every month, we set aside small amounts of money from every paycheck for larger, irregular expenses - including the fun stuff. Before 2020, our finances were in incredible shape. I have been using YNAB for exactly six years. But, it’s not going to hang around for long. So, the credit card debt was unfortunately inevitable. The not so good news: we had some other punches to roll with, namely losing 30% of our household income, blowing past our furniture budget pretty easily, and having additional living expenses (ahem, rent) due to the two month delay.
The good news is that we had cash and additional savings to fund a portion of that overage, so we didn’t have to fully rely on credit. So, not quite 20%, but definitely not nothing. Different math: it was 14% over the original estimate. Having just done the math, our total out of pocket expense was 12% of the real construction cost. Photo by Karolina Grabowska on Debt happens While I’m working that growth plan, I’ll lean on the greatest budget management tool, You Need a Budget, or YNAB, to make sure we don’t end up digging a deeper hole. And while I hate, hate, hate credit card debt, it’s a great motivator to kick my financial discipline in gear, and get some earning momentum going. I’ll get into some details in just a minute, but the bottom line is that we’ve got some unplanned debt to pay down. Well, we pretty much hit that nail on the head. What’s the cliched formula for any construction project? Take the estimate, add 20% and two months?