Simplify Your Budget & Your Life

Simplification is kind of a running theme in Budget Nerds, but Ben and Ernie haven't done a whole show dedicated to simplifying -- simplifying the budget, your bank accounts, even your life! Today they discuss various ways they've tried to simplify their finances over the years, what has worked and what hasn't.
Do I Need a Savings Account? by Ben Barlowe
www.youneedabudget.com/do-you...
Is It Bad to Keep Money in a Savings Account? by Matthew Amster-Burton
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Ben and Ernie want to hear about your YNAB wins! Send them an email:
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Timestamps:
0:00 Intro
2:02 Simplify your personal finance life
3:21 Why we overcomplicate things
5:16 Simplify bank accounts
17:29 Simplify credit cards
21:34 Simplify categories
26:26 Simplify personal finance apps and spreadsheets
34:53 Other odds and ends to simplify: automate bills, consolidate retirement accounts, go paperless, and payoff debts
46:50 YNAB Wins
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#budgeting #youneedabudget #ynab

[@YNABofficial]

Ernie's video got a little choppy in this episode, but happy for all, he just got a new computer, so we should be good going forward! 💙 If you prefer to listen, you can find the Budget Nerds podcast wherever you listen to podcasts. podcasts.apple.com/us/podcast/simplify/id1606054345?i=1000593645867

[@YNAB_Ernie]

My bad, y'all 😅

[@bacigirl]

No worries, Ernie! Your exuberant energy (happy guy) still came through! Thanks to both of you for all you do and share! Happy 2023!

[@nosirrahm]

@@YNAB_Ernie I hope that laptop was in the budget. 😬

[@YNAB_Ernie]

@@nosirrahm it was in the budget! Even better, it was YNAB's budget and not mine 🤣

[@justaskin8523]

I was starting to feel like I was having a seizure. Man, the little things really DO matter.

[@LisaMoore-ye3ok]

I'd LOVE to see an episode about handling financial paperwork, scanner, the routine, etc. Great idea!

[@austintehguy]

Realizing that it doesn't matter at all where my money is kept was an insane realization for me. I'm so glad to be where I am now and I mourn all the interest dollars I could have been earning years ago had I realized that I didn't have to keep 80% of my money in my checking account because it wasn't part of my "emergency fund"! It's so interesting to me how we all have these baked-in ideas and perceptions of how our money works and where to organize it, when none of it ultimately matters and it's all just an imaginary construct that becomes irrelevant when you use a system like YNAB.

[@AIRFORCEFREAK1]

I immediately started inputing every non-monthly subscription into its own category group. Making it exactly the amount and the date it needs to be paid. It makes me feel so good that I know I'm saving for those and I can look at that big list in YNAB to understand where my money is going. I think monthly and non-monthly subscriptions can really add up and surprise you. I'd highly suggest it. Its definitely a YNAB win for me in my first year of using YNAB.

[@XGARXS]

I just have one category and Ieave the names in notes, I also use an App for Subcriptions so I get the annual amount I need to save

[@Tesla-Cannon]

I used to have an account for every savings goal. Took me maybe half a year or more with YNAB but now I have just one checking and one savings. So far so good

[@bedafu]

I also have a HYSA. I keep about $1500 in my checking and everything else I move to savings when I get paid. With the high interest rate, I'm currently making $50/month at least in interest. That's $600 a year, so a bit more than a few cheeseburgers! And totally worth it for me!

[@jacobfuller9532]

Yeah can’t say I agree with them on the savings rates. It adds up

[@rachelcrossen8136]

Does that mean that you then transfer back into checking when you need it? I’m torn

[@bedafu]

@@rachelcrossen8136 No I only need $1500 to cover my expenses. In fact, I don't even need that much, because I only have a few bills being paid from my checking. Other than that, I do all my spending on credit cards and my credit cards are set up on automatic payments from my savings account. I have three credit cards. Those with my rent payment (which also comes from savings) equals four transactions, which is less than the six transactions I am allotted per month. I would choose whatever you need to cover in checking for whatever spending/bills comes out of there, and keep the rest in savings. That might be more than my $1500, but at least the rest will be earning interest. Choose an amount that works for you, so that you don't worry about over drafting or have to transfer out of savings more than the allotted six transactions per month.

[@AIRFORCEFREAK1]

I'm with you and I need to get more comfortable with a smaller amount in checking. I'm getting near $10k in there and my HYSA is making me alot of money right now for doing nothing. I'm at $70 a month in interest and still adding to the HYSA since I'm saving big for a dream car.

[@YNABofficial]

Ahh yeah, that's a lot more than a few cheeseburgers! And the setup you described below is really interesting and one I haven't thought much about-making payments from the Savings account. I think I'm so obsessed with simplifying because I want to avoid the constant back-and-forth transfers. But if you set it up in a way where you know how much you need in your accounts to cash flow everything, you have yourself a simplified system-one transfer when you're paid and then the spending. Nice! ~Ernie

[@laurenb4289]

I love listening to you guys, gives me something to do when I feel like spending, but after checking ynab 3 times, I can see there’s no money 😂

[@tammifitzgerald9285]

I have 2 checking and 2 savings accounts. 1 savings in a high interest savings for longer term goals and the other savings with my the bank I use for checking for shorter term goals where I need to access the money more quickly. the 2 checking accounts is for 1 for just bills / debts and the other for fun spending.

[@wendielliott8454]

I use OneDrive to scan my paper stuff in. Then, if needed, I paste the url for that document into the memo field in YNAB

[@sabinapieterse5855]

Wow such a nice idea!

[@YNABofficial]

Yes, that is a nice idea! ~Ernie

[@nealforreal]

Ernie choppily nodding his head with enthusiasm is giving me life

[@minjung2949]

I totally want a gif of that

[@YNABofficial]

😊 ~Ernie

[@andrewmitchell571]

YNAB was a gamechanger for me in building out a plan and getting on track financially. But, I would love to see more content on actually building wealth. Yes, how my categories are structured is important, but so is making sure one of those categories is an emergency fund, and one is a contribution to a brokerage account. Sure I have my paycheck mapped out to category goals, but I've also made sure I'm getting my full employer 401k match and contributing to an HSA before it ever gets to YNAB. Would love to make sure we're telling the whole story about how YNAB can enable long term wealth building.

[@YNABofficial]

I really love this idea, Andrew, and Ben and I will be sure to consider it as we plan out future episodes! ~Ernie

[@amandabender7216]

Thanks for making me feel better Ernie! I was frustrated with my budget template being higher than my income becuase I have a large category of Rule 2 things with targets for everything so I don't forget about those things and how much they cost (thanks ADHD for my long term planning deficiency). But now, I'm just going to go with it and embrace Rule 1 when my paychecks come in. I'm going to look at it from a "gamifying" perspective (which my ADHD brain loves) instead of a defeatist perspective from now on. (I've been bingeing your episodes while at work and am working hard at becoming a budget nerd!)

[@carolea7158]

I'm gonna come back to this episode for sure! I've been a YNABer since lockdown 2020 and I love these budget nerds episodes. I just lost my job in November. Can y'all do an episode on what to do with your budget while you've got no income? I've got padding to keep me going and I think I need to do a fresh start to figure out where my dollars should go. I'm concerned about inflation & prices jumping left & right.

[@RachelSmith-rq5ku]

Such a good episode! We set our template just under what our paychecks should be, so then there is (usually) a little bit of extra money after we hit "underfunded" on a new month's budget. That is our "rule 1 money" every month.

[@joannaraquel78]

I do what Ben does, when I want to change targets, it's easier to do it on a spreadsheet first! I would love for it to be simpler in YNAB! I had to laugh at Ernie's comments about credit card points though because I love credit card hacking and I think YNAB makes it so much easier.

[@dpayne1943]

Sorry for the second comment (great episode!). Like Ben, I have two budgets for subscriptions/memberships, one monthly and one annual. I am considering making subscriptions its own category. Now this is coming from a person with only four categories. But I figure, I can budget accurately and also be fully aware of what active subscriptions I have and their costs. Nothing gets lost, I know what I am paying for and I am reminded to review their value to me every month. (Edit for spelling)

[@TatianaR31]

I need to know more about this Evernote process that Ernie has perfected. I, like Ben, am enthralled.

[@YNABofficial]

The key is having an app that converts documents into PDFs! ~Ernie

[@darkANDsqually]

I just asked a question on Reddit of the YNAB community if their targets were less than, equal to, or more than their income (although I accidentally called targets the old language of goals lol). I like that Ernie has targets that are higher than his income. It's an interesting perspective and is part of the fun and flexibility of YNAB. I just made our targets pretty much meet our income as we had income loss and I'm trying to make sure we stay within our budget before resetting long-term goals/targets.

[@xXbraintrafficXx]

I find most of my categories to be a mess, but this episode inspired me to put certain bills into a single category called Utilities-Insurance for phone, internet, electric, car/rental insurance. The rest needs some more thought. As far as Targets are concerned, I've mostly stopped using them, save for a few savings goals. Instead, I've set up 2 big 'ol recurring split transactions. I get paid at the end of the month, so on the 1st there's a transaction for the important stuff (bills, debt payments, groceries, etc) and one for the flexible stuff (fun$, streaming platforms, etc.). They both pull from Ready to Assign and disperse it into the various categories. Then around the 10th I'll take a look and make adjustments to the flexible categories and also assign any remaining $ from Ready to Assign. So far is working pretty well for me, but the flexible categories need a ton of siplifying since i tend to overthink them. Thank you for this episode. I'm going to let it stew on my budget for a bit.

[@billriley2550]

Just became a budget nerd. Been watching videos on your KZbin channel. Please, Please share a screen showing what you are saying on all the videos. It's extremely important to show people what you are talking about. Everyone on your youtube channel should do this. Regardless of how easy things are for you, it's not so easy for us.

[@momhouser]

I agree with the point made at the end...targets and the underfunded button make it "too fast", and too easy. The automation discourages you from questioning the assumptions you made back when you set up the templates. Do I still need to set aside $50 for garden and yardwork? Am I still getting $16 dollars worth of value from Netflix? I use targets only for the truly non-negotiable and unchanging categories such as the mortgage, property taxes, etc. Otherwise, I fund the remaining categories "by hand" each month and really stop and think about whether this is still what I want to do.

[@autumnm3751]

Automating bills - I automate every bill I can or I forget to pay. Anything I can’t automate - I just switched to a bank that you can schedule recurring etransfer payments. So anything that comes off a card, I can auto pay before, or same day it will come out, but I only have to set it up once.

[@robertcarignan2983]

Oh my gosh, that’s what I’m doing right now: multiple accounts! My wife’s pay goes into checking (which is what we live off) and my pay goes into a separate checking account that I call BillPay. However, I keep on moving money back-and-forth to make sure things are balanced with the categories. I’m playing the matching game! I’ve been considering moving everything back to one checking account to streamline my YNAB but was unsure whether I should make the effort. I think I’ll now try it for a couple months to see how things go. The rationale in having a bill pay and a checking account was that bills will be taken care of and wouldn’t interfere with the living expenses (groceries, gas for the car, Target runs, etc).

[@elizabethgadsby9641]

Ben, if you have a newer phone it has document scanning built into the camera! I scan all my documents through my phone now and it does an awesome job.

[@lavs23]

You guys have inspired me to simplify in many ways. I have a checking, savings, cc and brokerage account. My checking requires a certain number of debit card transactions (which I don't normally use) a month to get the 2ish% interest. On top of that the saving interest rate is lower than the checking! I've decided to target 2-4 weeks of cash in checking and put the rest in a money market in my brokerage account for my emergency fund and close my savings account. I'm now down to 3 non-retirement accounts and I'm going to try and break free of the matchy match game and the game of getting a number of transactions on a card a month. I also got a Venmo debit card and I'm auto-loading that up with a small amount every month to try and limit dining out. I keep it in a phone case that stores 2 cards (Venmo and License). Now I leave my wallet at home unless I'm going somewhere out of town or planning on spending money to help curb impulse spending further. My Venmo (off-YNAB) account now counts for all my dining out/vending machine. My transactions to input in YNAB are simplified too!

[@vladimir.zlokazov]

Having to budget several accounts in two separate countries in three currencies - that's a level of compexity I've got :)

[@elizabethgadsby9641]

I used to have my subscriptions in one category, but then found that I was saving TOO much money over time. That was the prompt I needed to give them each their own category. It also lead to simplifying what I'm subscribed to, including scrapping the Prime subscription!

[@elizabeth1234..]

Our septic and water plus culvert mowing (I'm not hooked with septic and water btw) gives us a quarterly bill. Luckily they don't charge late fees but they're constantly losing checks that we send by certified mail because the website DOES NOT WORK. So we have to take time off work to drive over to town hall to pay in person

[@RoyleneBuser]

We have a higher interest savings account and one checking account. We get $120 a month from our savings account so it’s worth it for us!!!

[@Rollingstone2009]

$120 a month? What bank is that? Do you have $50,000 in a savings account? Or $25,000 at 5%?

[@autumnm3751]

For playing with budget amounts, being able to copy a budget and create a sandbox version would be a great option. So you can play and not affect what you currently have setup and also don’t have to manually recreate your budget. Budget to the penny vs not - I round up all my bills and categories to the nearest $5 or $10 for simplicity. And any allocated budget that isn’t used up (even cents worth) I will transfer into a savings goal of my choice. Kind of like a card that rounds up your purchases for auto saving. It all adds up over time!

[@amyaston8521]

To me, using the "right" credit card to earn the most points with different retailers is a fun game. I end up getting a few thousand dollars of flights and hotels per year doing this (without buying stuff I don't need)which helps me reach my travel goals. To each their own, but it's legitimately fun to me. I don't mind doing multiple accounts to earn high interest too. I like a really hands on budget that I can play with frequently, but I can understand how that's not fun for everyone.

[@YNABofficial]

Good point, Amy! And I totally remember the days where playing the "right" credit card game was fun. ~Ernie

[@marccoppejans1046]

I have 5 checking accounts. But they have all a function. I need at least one Dutch account. I need that for the Dutch online payment system for webshops. I have a German account for holidays. I have a REVOLUT account. I have a Spanish account for my daily expenses and a Spanish savings account where I get the highest interest. I only have to pay a fee for the Dutch account. The other accounts are free. Except for one German account, I can link my accounts to YNAB.

[@nosirrahm]

I need YNAB to come up with an assignment report. It’s only spending, but I want to know what percentage of how I’m assigning my money.

[@vincentapa1376]

I disagree about the credit card conversation. If you choose the cash back cards it eliminates some of the problems but I made $2G from cash back last year running mostly a 2% card with some discover and amex thrown in for specials. It also helps the credit score when you manage it.

[@YNABofficial]

I just wish my wife and I had 1 rewards card and not 3 😭 ~Ernie

[@nagarpoe]

I look forward to every budget nerd video 😊

[@Peter-kt2gb]

I've always viewed the credit card game as a side hustle. It's been nice for me the past couple years to churn welcome bonuses. But it is a lot of work, and I don't think I'll keep it up forever.

[@darrin320]

I'm more than fine having several accounts, especially for bonus rewards. It'd just be nice if YNAB would allow me to nest them into groupings (i.e. checkings/savings/credit cards).

[@Ann-Marielivingonabudget]

Here is my latest YNAB win: we realized this month that we will be short on our taxes when we file this year. We could avoid a penalty from the tax man by making an estimated payment (it feels large to us) before mid-January. Because we've been using YNAB and saving to get 3-6 months ahead, we were able to reallocate some of those funds to make that estimated payment. Now we can change our withholding for the coming year so we'll be prepared next time. No need to lose any sleep! Thank you, YNAB!

[@CommunityTheatre]

Top 10 anime battles: Ben vs the municipal water supply

[@SonjasMaschensalat]

It’s not very common here in Germany to have a lot of accounts, I think. I have two: one for savings for the long run with higher interest and a checking account. Maybe that made my beginnings in YNAB so easy

[@mittendad]

Regarding scanning, also love Scannable, but if you have iOS, you can scan documents into the Files app, or even into Apple Notes, etc.

[@lauramoore9567]

I feel Ben's rant about the water company IN MY SOUL.

[@benc3726]

My wife got tired of what were supposed to be surprise gifts getting spoiled when I was reconciling stuff. So this year, in addition to our regular Savings and Checking accounts, we've got a Checking account set aside for just that, which we put a set amount into and I don't get to look at until after the gift has been given.

[@YNABofficial]

I totally get that-a situation where an extra account actually makes your life easier and better. Nicely done! ~Ernie

[@bcase5328]

I can see six accounts beside credit cards: Checking and Savings, each having His Hers Ours.

[@conureron3792]

I love to individually assign the money, too.

[@lesliedavis5323]

Yes, I complicate things because I enjoy the process so much! The software makes it too easy!

[@YNABofficial]

So true! And it makes me wonder-would I have gotten so deep into the credit card weeds if YNAB didn't make credit card handling so easy?! 🤣 ~Ernie

[@mtnjulz]

Funny, you are talking about using a spreadsheet or being concerned about yearly subscriptions and YNAB 4 covered both beautifully. I still miss the yearly budget capability.

[@NoName-sz4yk]

I like to take advantage of the bonus' that banks offer and YNAB is literally the only way to stay organized with this system

[@sherrainehiggs7380]

Can see you lost weight Ben, looking great, healthier. Its what im trying to do 2023.

[@dutchdilemma]

There is another reason to have more accounts. In europe if a bank goes bankrupt the gouvernement is required to fund up to 100K per account (and a savings account is always linked to a checking account) so the economy doesnt get a big hit. So if you have more then 100k in savings it is wise to have another checking account at another bank to get the same protection!

[@elizabethgadsby9641]

We have a similar thing in the US with FDIC protection. We're not at a point where the limits matter to us yet, but I think it's in the $200k range.

[@jeweledsnail]

I have everything in my credit union checking account right now. The interest rate is better than my savings account and it just keeps it simple.

[@lmbarnes3]

Some military people people when you move, back in the day if you opened up account in Texas locally , when you the. Moved to Connecticut you would have no way to access that account. Then you would open up another account locally. Now you can transfer used share location, and online. One CU gives me better rates than the other (mortgage, cars loans, etc). But the other has better locations. I have one credit card with points. By the end of the year I use all the points for gift cards during Christmas. Usually around $500-1000.

[@leakedavid]

Ben, What bank are you getting a good checking interest rate with? Do you get 3.2% or more

[@jordanhoman0212]

32:00 a lot of tax software has a "calculating" screen at the end. It's really done in less than a second, but they want to make you think it's working hard.

[@robcrosby2104]

@Ernie - what was the app you use for scanning docs using your phone?

[@YNABofficial]

Evernote Scannable! ~Ernie

[@robcrosby2104]

@@YNABofficial thanks!!

[@beckybarrett7452]

Do you track your cash account? I have a cash item on my budget but I say withdrawal cash for lawn service, birthday gift etc.

[@YNABofficial]

Hi Becky. I just switched from a cash category to a cash account. I like this a lot more because it doesn't require me to go to the bank so much-when I receive or spend cash, I simply add the inflow or outflow to my cash account and categorize in the budget. ~Ernie

[@shakeit0031]

Just found you guys.what is rule 1 work?

[@YNABofficial]

With Rule 1, you're deciding what the money in your bank account needs to do before you spend it. It's really powerful because now you have clarity around what your money needs to do between now and the next time you're paid. More info on the rules here! --> www.ynab.com/the-four-rules/ ~Ernie

[@dpayne1943]

I have money that is sitting in savings and I am making nearly enough to buy groceries for one each month. If I move it to another institution (currently in my CU) I could make double. It might be becoming worth it.

[@karickm]

I completely disagree with your no savings account assessment. 1) I earn 3.5-4% on my "emergency fund" money and that brings in a couple hundred $ a year. That is significant. 2) Having all your $ available in 1 account is dangerous for the reason you mentioned about someone getting illegal access. 3) It also is, for many, too easy to use that money if it is easily available. There is no emotional disconnect between that money and the monthly bills (unless the categories are very closely followed, but that reduces rolling with the punches). If it's in another account, just the extra effort of having to go through transferring that extra, un-budgeted spending from savings to checking is enough to discourage spending over the budget.

[@margaretcraig6538]

Minimalism applied to accounts!

[@williamwarren9448]

The regret is real - missed out on getting refund (costco citi) buy using a wrong card (only had three in my wallet) at the hotel (2 rooms 6 nights in SO cal over new years think EXPENSIVE ) I cried when I realized I missed out on points - UGGHHH glenda

[@mirainoivuyo984]

I feel like blogs / podcasts in the personal finance space don't talk enough about rewards checking offered by credit unions. A lot of these rewards checking accounts offer better interest than their savings counterpart and all you have to do is interact with the account (direct deposit, 10 debit card transactions of any amount) which is stuff you do anyway. I think it's like 1.5% APY for balances up to $10,000. So if you use a system like YNAB that compartmentalizes your money in categories/buckets, you can just keep all the money in your checking account and not deal with multiple accounts at the bank level. You get some kind of return while keeping your money accessible and liquid. Having an app like YNAB or an accurate tracking system would be necessary tho to make sure you're not overspending from your transactional account.

[@YNABofficial]

No lie-just minutes before I read your comment I was looking at my credit union's rewards checking account! ~Ernie

[@iraray4708]

I know that this video was made in December, but the advice about savings accounts and checking accounts to me is flat out wrong. Why wouldn't I grab a 4+% rate from an online bank savings account (backed by the FDIC) compared to .5% or nothing for a checking account. It's about way more than a cheeseburger or 10 at the end of the year. This is just bad advice to me. Not that inconvenient to have 2 accounts.

[@kemikunle9360]

There has to be a way this information could be made more interesting... We might be budget nerds but will still be bored by long overly specific rants

[@nosirrahm]

I had my Smartypig account to split up sinking funds. After using YNAB, I realized that I didn’t need them anymore. I got rid of about 4 separate bank accounts. In the past year. I was thinking about closing down my credit union account since I only get one distribution a year from them.

[@santiagoarteta2993]

I using paycheck by payckeck to paycheck I change method ynab ahead month bills to Two paycheck ahead what you think a change