If you’re one of the thousands of people who have checked out YNAB ^[2] through this site, I’m sure you’ve been as impressed as I am with this incredible budgeting ^[3] software. If you’re one of the dozens who has taken the plunge and decided to follow up on your New Year’s Resolution by implementing YNAB’s ^[2] budgeting ^[3] philosophy in your financial life, you may be wondering what to do next. Well, after setting up your budget ^[3], you’ll quickly discover that you’re in one of four different categories:

• Your income and expenses are close.
• Your income exceeds your expenses.
• Your expenses exceed your income by a small amount.
• Your expenses exceed your income by a large amount.

If your income and expenses are close

Congratulations. You probably only need some small lifestyle changes to begin experiencing financial success, saving money, and eventually investing for your long term goals. Consider cutting back on dining out, clipping coupons, using NetQuote to help you get better insurance rates, or other small changes to decrease your ongoing expenses.

If your income exceeds your expenses

Big congratulations are in  order! It’s time to investigate which savings account ^[4] to use and begin investing for your long term goals. Try reading How A Second Grader Beats Wall Street ^[5] for some solid ideas on investing for the long term while decreasing your investment costs.

If your expenses exceed your income by a small amount

What is a small amount? In this case I’d say less than 5 percent. If this describes your situation, tighten up those budget ^[3] categories and begin implementing as many changes as you feasibly can to save money. Cut your cell phone ^[6] bill, do away with your land line, suspend your cable, clip those coupons, lower your thermostat (in the winter), carpool, raise your insurance deductibles, stop using any credit cards ^[7], and shop with a list.

If your expenses exceed your income by a large amount

Step back and take a deep breath. It’s time to decide what’s important to you and wipe your slate clean. It’s time to start over. Are you going to:

• Severely slash your expenses by using the above suggestions … and more?
• Learn ways to make extra money ^[8] by utilizing your current skills and experience?
• Sell some of your possessions?
• Work on finishing your degree ^[9] so you can get a better job and get paid what you’re worth?
• Cash in some investments? (first check with a financial or tax advisor)

Regardless of your personal situation, you do have choices. You can change your future by using your YNAB ^[2] budget ^[3] to correctly identify what categories you need to tweak, and where your expenses can be trimmed. You’ll find that you can identify where you’re wasting money and where you can manage to save for your future.

About the author

Ron has written 1083 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal ^[16] in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a partner in a national building materials company.

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