Avoid Spending More than You Earn
People who don’t follow a prioritized spending plan tend to spend everything they earn—and even more. In fact, in 2006 the average savings rate in the United States fell to –1%, its lowest level since 1933. Most people start by overspending and end up in debt because they fail to compare the amount of their income to the amount of their spending (the basis of a budget plan).
Sticking to a budget helps you avoid the temptation to spend beyond your means, even if you do use credit cards. Budgeting properly also leaves you with a surplus of money each month that you can use to save, invest, or cover unexpected expenses, such as medical bills.
How YNAB is different
YNAB bills itself as different than other budget or money management programs and the reasons are many:
- They don’t demand your banking passwords or logins.
- They use the highly reliable envelope system with some interesting twists.
- The system helps you save for those” rainy days” and large purchases – including insurance or taxes!
- YNAB forces you to focus on budgeting leaks.
- The software makes adjustments if you overspend, helping you fix those mistakes before you go to the next month.
- It even works for those “spontaneous people!”
- The system frees you from the paperwork monster!
1. From now through January 31, 2010, readers of The Wisdom Journal who purchase YNAB’s winning budgeting software are eligible to receive 10 percent off their purchase when they enter the coupon code: WISDOM at checkout.
2. Check out YNAB today and tell me what you think in the comments. One reader will receive from me – at no charge – a gift certificate to get YNAB for themselves. All you have to do is comment by midnight January 31st (no multiple entries). Include a budget or finance related topic you’d like to see discussed on this blog in the future and you’ll receive TWO entries!
I’ll announce the winner on February 1st.