You’ve heard me talk about YNAB plenty of times. YNAB is also known as You Need A Budget, an awesome budgeting program.
While I use the YNAB application, the important thing is the method.
- Give Every Dollar a Job
- Save for a Rainy Day
- Roll With the Punches
- Live on Last Month’s Income
Seems easy, right? Well, I’ll admit, step 4 scares people. But trust me, you’ll get there. Over the next few months, I’m going to talk about how I’ve made YNAB work for me.
Since I just came back from an awesome vacation, I thought I would talk about how I make YNAB work for me when vacation planning. One of the budget categories I set up for myself is called “Vacation.” Some people break down their vacation budget into things like Vacation Travel, Vacation Lodging, Vacation Food, etc. I like to keep it simple. Every month, once I’ve budgeted money into my required funds (mortgage, bills, food, etc), I put a little bit of money into my Vacation fund. Some months it’s more than others. Some months, it’s nothing at all, depending on what expenses I had that month. But it’s an easy way to make it add up.
Some people vacation plan by putting money into a separate bank account they can’t touch. That’s always an option, I suppose, but it’s not one that I like. First off, I don’t always set aside the same amount of money for vacation expenses each month, so setting up an automatic withdrawal every month wouldn’t work. And I don’t always spend the vacation money at the same time.
Let’s say I’m planning a trip in August. If I were putting money into a separate account, on February 1, I would have put money into that account. Then, on February 15, I decide to buy my plane tickets because I see a good deal (and I use Southwest, so the money is refundable in the form of Southwest credits – that’s a post for another time). Now I have to transfer money back from that account into my bill paying account or directly to my credit card.
By using a YNAB budget category, there is no money to be moved around. I just log the expense into the Vacation category and then pay the credit card bill when it comes. It’s a whole lot easier.
Couldn’t I inadvertently overspend and not have the money for the trip? Sure. But I work hard to make sure that doesn’t happen. And let’s be honest – if an emergency comes up and I have to spend the money, well, I can put my vacation off to another time. That’s what Rule #3 is all about.
It’s nice to see the money add up every month, knowing that I will be able to have a bit of fun. If I have an idea of the expenses, I can be sure I’m setting aside enough money. And then, when I come back from a trip, I know that it’s time to buckle down and start saving again so I can afford the next trip.
I’ve been traveling a lot lately, so my vacation budget is GONE. It’s kind of sad, to be honest. But I’ve got some vacation planning on the horizon, and when I do my March budget, I will definitely be assigning some money to that Vacation category.