interview with a budget and money coach

by Alison Green on August 11, 2016

Lynne Somerman is a regular reader here, and she’s also a budget and money coach. I asked her if she’d do an interview here about her work, and she gracious agreed. Here’s our Q&A (and here’s her website).

So you’re a budget and money coach! Tell us more about what that means — what kind of work do you do with people? What does a typical client engagement look like?

In a nutshell, I’m a budget and money coach who’s passionate about working with women entrepreneurs. I help people work through both practical issues and the fear, blame, and shame we have around money. I believe that budgeting is an act of self care and that they change lives.

I primarily work with small business owners, and what I do for them is a combination of the practical (setting up and maintaining their budget, keeping their accounts up to date) and what essentially amounts to money therapy. My clients and I meet regularly to discuss their goals, progress, their successes and failures, and how they’re feeling about how things are going. This can mean some tough love conversations, some celebrating together, and a lot in between. For some folks, we end up spending a lot of time talking about the things that block them from success financially — things like fear, shame, and blame. For a lot of female entrepreneurs in particular, I help them to stop “playing small” and charge what they’re worth, admit they need help, things like that.

What does “playing small” mean?

I mean that I bring a clarity for my clients about their money that helps them be bolder and wiser about their decisions and their next moves. A lot of people come to me saying things like “I don’t know if I can afford X” where X is to give themselves a raise, to hire an employee, or to take a risk on a new product or service. I answer those questions for them, freeing them to do things like charge what they’re worth and take the risks that help their businesses grow.

What do you think is behind people’s fear of charging what they’re worth — that no one will pay it? That they’ll be laughed at?

I think both of those play into it a lot, particularly for women. I think it really comes down to impostor syndrome, something you talk about on your blog a lot! Just like putting together a resume or negotiating salary, I think the tendency can be towards downplaying your value — “well I did X but I was part of a team” or “My clients all say they think I do a great job for them, but they’re probably just being nice.” Another part of it is that people think “If I charge that, I won’t get any clients and then I’ll never be able to do this at all!” which is a fear I know I’ve had, and which I haven’t found to be true. It is so, so hard to state your value, ask for what you’re worth, and then close your mouth. But, I’ve gotten a lot of courage from reading your site over the years to do just that! On the occasions when I’ve had potential clients hesitate at my prices, it’s always, always been about not knowing whether they could afford it and never about whether my service was worth it.

How did you get into doing this?

I like to say that I’m only good with money because I used to be terrible with money, and that’s completely true. I do this because I’ve been there, and I know how awful it is, and I have spent years teaching myself how to get out of a dark place money wise. I taught myself about mundane things like credit scores and also worked a lot on my emotional responses to money (i.e. terror and avoidance). I started sharing what I’d learned with people and found I loved seeing how it changed people’s lives. It started with friends and family members and grew from there.

Are there common patterns that you see come up over and over with people?

The most common issues I see, that I work on with every single client, are a lack of awareness which usually leads to anxiety, and a thought pattern that tells people that budgets are all about restriction and being frugal.

In terms of awareness, I have learned that most people think they don’t make enough money and that’s the root of their money issues; in reality most people I work with have enough money but they spend too much because they don’t pay attention. Often, they don’t pay attention because they’re afraid of what they’ll learn. It’s very cyclical. There’s a lot you can do about this (namely: a budget), but I think the single most powerful thing anyone can do to take charge of their finances is to record every penny that goes in and out of your life. It’s like money meditation. Your goal here isn’t to change in a big way what you’re doing – the same way meditation asks you to notice your breath without asking it to change, necessarily. Big changes like paying off loads of debt will likely take more work, but I’m always amazed by how much can be accomplished by just paying attention to it. I started out carrying around a small notebook and just jotting everything down. No categorization, and I never looked at it after the day was over. It didn’t take long before things started to change.

A lot of people believe that budget is a four-letter word. It has a big negative connotation, and it can feel like a prison sentence. It feels inflexible and restrictive, it feels like someone is telling you what to do, and it feels like you’ll never be able to do anything fun again. What I teach people is that budgeting is an act of self-care. When I work on my budget I try to come at it from a place of loving detachment, rational and fact based. For me, a budget is all about reality layered with priorities. When I want to spend money on something, I take a look at the budget (not at my bank account) to determine whether I can spend it. It’s not about restriction; the budget is there to reflect my own goals and decisions back to me, and I can change it if I want. Also, I always encourage people to put things in their budgets that make them happy. I had one client who loved breakfast burritos; it went in her budget so she could eat them guilt-free.

I feel like having savings is one of the nicest things anyone can do for themselves — the peace of mind that it brings you to know that you have a safety net if you need it is worth so much more than any purchase I can think of. I feel like people should get the same high from saving that they might get from buying a new iPad or eating really delicious chocolate. What do you think holds people back from looking at it that way? (Obviously there’s a huge caveat that some people are in such difficult financial situations that they really don’t have the option to save, but I’m talking about people who are.)

I think most people think of saving “for,” but not saving for savings’ sake. The focus is always on the eventual spending of the savings, other than personal finance gurus who advocate for having 3-6 months of emergency funds saved before working on anything else financially, which frankly seems pretty daunting to most people. I also think a lot of it comes from the way we talk about savings culturally, and that it’s become the norm to not have much in the way of money stashed away — “everyone’s doing it” mentality. There’s also this cultural image of people who save as miserly homebodies who never have fun. In fact that’s why I named my business The Wiser Miser — I’m all about turning that image on its head.

To some extent I think this is made worse because people don’t save, so they don’t know how great it is. I think it’s something you have to experience to understand. I’m a big advocate of building a one-month financial cushion as quickly as possible, which is often a stretch but much more doable than 3-6 months, and which is usually enough to get you through a major car repair, home repair, or other short term issues while you focus on other things like debt. I can’t describe how amazing it felt when my manager pulled me aside one time a few years ago to say they’d made a mistake and I wouldn’t get paid that week — and I honestly didn’t care.

How long does it typically take for someone to start changing their thinking around money once you really buckle down with them and start focusing on it?

This depends so much on their own commitment to it, but I’ve seen results in as little as a few weeks, and some folks never make it happen. Making long-term perspective shifts usually takes a few months. Like any hard new thing, it is exciting at first and then you start to lose momentum, so breaking through that can be difficult. That’s where having an accountability partner (a spouse, friend, someone like me, or an online group of budgeters — of which there are many) can really make a difference.

Do you think there are differences between the problems people run into with managing their personal money and the problems they run into managing their money as entrepreneurs? I’d love to hear about that if so.

The biggest difference is that entrepreneurs spend money on things that they’d never spend money on if it was “their” money vs. belonging to the business. Stuff like trips that are only tangentially business related, lots of cool software that they use one time, and especially spending on coaches and consultants. Ironic that I’m saying that, as someone who works as a coach for entrepreneurs, but I see a lot of wasted money here. With personal money, it really is more a lack of awareness of what they’re spending, along with some nickel and dime money wasting. Usually when you bring someone’s attention to what their personal money is doing, they see what they want to change. Business money, on the other hand, is very easy to justify spending.

Can I ask you my own entrepreneur/money question? One thing I’ve struggled with as someone who now works for myself is how to know when enough is enough. You could have a good client base and the right amount of work and income, and so you turn away new work (because you don’t want to work around the clock) … but then if you lose a client, you might really regret turning away those clients earlier. In the past I’ve struggled with the temptation to take on more work than I really wanted, as a buffer for that hypothetical time in the future where some might go away… which of course left me working way too much, but nervous about scaling it back. Has anyone figured out how to solve this?

I may be biased, but I think you solve this by having a budget! It comes back to awareness. If you know how much money you need to operate, and you are able to build up some funds to cover the necessary things like taxes and payroll, along with things like saving to take a vacation or hire an employee, you’ll have a much better idea when you’ve got enough, because you’ll have your neatly laid out financial goals and they’ll all be met.

Additionally, over time I work with my clients to build a reserve of cash, usually equalling about 3 months expenses, which helps them as a sort of “no thanks” fund. So you get your reserve and then you get an opportunity that you’re not sure you want, but because you have money stashed away you, get to say “no thanks” to anything that doesn’t move you closer towards your goals, doesn’t feel right, or is simply more work than you want to take on at that time.

I’d say enough is enough when you are working the amount of time that feels good to you, you’ve got a few months cash in reserve, and your bank accounts are growing — even if your revenue no longer is.

I budget and I turn away clients, but I still just want all the money. I want to sit atop a pile of gold pieces and rub my hands together while I count them. That’s a separate problem, though. In any case, thank you, Lynne!

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{ 271 comments }

{ 271 comments… read them below }

  1. Leatherwings*

    I’m a big advocate of building a one-month financial cushion as quickly as possible, which is often a stretch but much more doable than 3-6 months

    I’ve just recently started getting on top of this, and you’re right: it does feel amazing. Having even a small safety net is a huge relief. But how do you know when it’s appropriate to take money out? I recently had to have a medical procedure and I ended up putting it on my credit card instead of using savings, and I can’t decide if that was a dumb decision or not!

    Great interview, thanks to you both!

    1. Cambridge Comma*

      I guess you would compare the interest you are paying for the credit with the interest you are foregoing by using the savings plus any penalty for accessing the money earlier?

    2. Lynne (The Wiser Miser)*

      Hey Leatherwings – I think there are a few approaches here. Personally I am a big fan of a software called YNAB, with which I have no affiliation and receive no money from, I just love it. The team that makes it advocates for “living on last month’s income”, which is what I do with my own one month cushion. This is huge as a business owner as things change so much from month to month. So for me, I don’t spend money I earn in August until September, if that makes sense. I also keep a separate emergency fund for situations like when my pellet stove broke in the winter time, in Maine (what a nightmare!). I’ve seen people approach this a few different ways, and a lot of them are really about things like how big an issue it is (would the cost wipe out your emergency fund?) and your comfort level with using the money. Would it take a long time to re-fund? Things like that. Totally dependent on your situation, but there are definitely circumstances where putting something on a credit card for a short term makes sense. I’m very pro-savings and very personally frugal, but not anti-credit for some situations.

      1. Cordelia Naismith*

        I’m also a YNAB user, and I really like their philosophy of having different budget lines for different types of emergency funds. I have one general emergency fund that’s a “if I unexpectedly get laid off” fund — I’ll only touch that money if I lose my job. Then I have a bunch of smaller funds, one for car repairs, one for medical stuff, one for home repair, one for electronics, etc. Psychologically, it’s a lot easier for me that way. When I had to have a dental procedure done unexpectedly, I just used the money in my medical fund because that’s what it was there for! I don’t have to worry about not having any emergency money because all my other emergency funds were full — I only had to rebuild the medical fund.

        After a while, it’s actually kind of fun, like a video game. I filled up my medical fund — level up! Now it’s time to take on the big boss, credit card debt!

        …Yeah, okay, I’m a giant nerd.

        1. Cordelia Naismith*

          Oh, and just to clarify — these aren’t different accounts. All my emergency money is in the same savings account. These are just different line items in my budget.

          1. Ife*

            That was going to be my question — are they all in the same account. How do you keep that money separate in your mind and in practice? Is that something YNAB helps you do? Right now I am saving for a down payment so my savings account is down payment + emergency fund, but it is really tempting to think, “yes, this is ALL for the down payment!” I cannot imagine if I was trying to keep three or more things separate!

            1. b@sketchee.com*

              YNAB does it, you can do it without it though. The trick to any system is to avoid keeping things in your mind. Write it down somewhee. Then the paper does the work! =)

              For me, the always makes it feel real. After all, the account is just a number on a screen. So write out your own “Emergency fund = $5000 / Car Payment Savings = $3000”. Then it’s done!

              2. Van Wilder*

                I use CapitalOne 360 (formerly ING Direct) for my checking/savings accounts. It’s so easy to create a new savings account, I would personally probably just set up a separate account for each one.

              3. Cordelia Naismith*

                Yeah, exactly. It’s written down in YNAB for me. I don’t look at my savings account balance to know how much is in each fund, I just look at YNAB.

        2. AVP*

          Oh this is amazing, I may have to get this software.

          I also just started a new business venture and it never occurred to me to consult with someone like Lynne but now I am really thinking about it! My biggest budgeting woes are that I need a budget line for “every three years when I break my Mac and need a new one” which I somehow never remember to start…so every time there’s a computer problem it feels like a huge emergency cash outlay, not something I should have been planning for because it’s obviously coming.

          1. Lynne (The Wiser Miser)*

            Totally! Having set time for budgeting can help, so you don’t “forget” to budget. Also, cut yourself some slack (and build in some wiggle room in your budget). Life happens. I love having a budget because it allows me to decide what I’m going to do and then just, you know, do it! I don’t have to make a decision in the moment because I already made it when I wasn’t in the middle of an emotional reaction.

        3. themmases*

          I find it easier to eventually part with the money if it has some kind of label on it… Even just in my mind. My partner and I have both been dipping into personal savings in order to move and we just started combining our money so nothing is where it is supposed to be yet.

          I honestly think it is easier for me than for him because I have the one savings account and this is truly a once every 5-10 years situation. I can look at it and go, this is exactly why people squirrel money away and now’s the time. My partner had left his (much bigger) cushion sitting in his checking account. He was obviously not going to just passively spend down the cushion, but it is a whole different feeling when you see your checking balance change drastically and money you’d just been kind of holding onto is gone.

      2. Mona Lisa*

        So glad to see some YNAB love! My husband and I started using it about it a year ago, and it’s really helped us to talk about money in a more substantive way. We have fewer arguments about how much money we do/don’t have and more discussions about priorities and what they should be for us.

        1. Lynne (The Wiser Miser)*

          Cordelia – great point. I hadn’t really thought of some of my categories as mini-emergency funds but that’s totally how they operate in reality. Car breakdown? Car emergency fund to the rescue!

    3. The Cosmic Avenger*

      Taking money out of your emergency fund even for an emergency can be daunting. All that hard work! All that saving! But remember, that’s what it was all for.

      Let’s say you built up an emergency fund of $12,000 over 5 years, saving $200/month. Your medical debt is $6,000. Go ahead, give yourself an interest-free loan! (I’m sure your credit card interest rate is many times higher than anything you can get with a safe investment like a CD.) But start putting another $200/month back right away, more if you can afford it. If you only needed $1,000 from your fund, I might say $100/month was adequate.

    4. VA anon*

      I take money out of my emergency savings for unexpected necessities. I pay for the expense on my credit card, transfer the money over from savings, then pay off the expense.

    5. Althea*

      Use your savings to pay off that credit card debt immediately! The debt is sooo expensive. The emergency money is there so you don’t have to go into debt for emergencies. Taking on debt makes the emergency last longer because it ends up costing more, and having to put more of your money toward recovering from it.

      Consider if you have $100/mo. in totally disposable income. You used it to build a $1,000 emergency fund (EF) over 10 months. Then you had your emergency and you spent $1,000.

      You would then rebuild your EF and it would take you 10 months and $1,000.

      If you instead use your credit card, and you put your $100/mo. toward payment, you’ll be earning interest every month. For most credit cards, you’d have to put in at least one EXTRA month to pay off the interest. Your $1,000 emergency just cost you $1,100 and took you an extra month to recover from.

      Using credit is a totally valid fallback IF you don’t have the cash at all. Otherwise, you’re just increasing the pain!

      1. Ask a Manager* Post author

        Yeah — by putting it on a credit card, you’re essentially raising the price of the thing you’re buying (unless you pay it off within a month and avoid the interest).

        If it makes you nervous to spend your emergency fund, and that makes you want to use a credit card instead, (a) using the emergency fund will be cheaper and (b) if you need the emergency fund again before it’s replenished, that’s what the credit can be there for. But don’t make the credit card the first place you go; make it the last.

        Also, if you’re wiping out your emergency fund, take it as a sign that you need a bigger emergency fund!

        1. Lynne (The Wiser Miser)*

          Good point re: credit card as a de facto back up to the emergency fund. A credit card often is just an expensive flexible emergency fund. The pain of using it helps you know it’s a real emergency, too.

    6. little spender*

      In that scenario, I think it depends on whether you can pay off your credit card in full (and avoid any interest from the unexpected expense). If that’s the case, then it really makes no difference whether the funds came out of your emergency savings. If that’s not the case, then it might have been better to use your emergency account. Whenever I use any of my emergency funds, I always make paying myself back (i.e., replenishing those funds) top priority for next month.

      1. lilly*

        Yeah, that’s how I (in an ideal world) use it. I put a lot on my credit card and then use the miles rewards from that to put on my coffee card for guilt-free iced coffees or treats!
        The only un-ideal part is when I don’t pay it off, like I did when I was unemployed, and now I’m struggling to pay down the chunk that’s been sitting there for two years mocking me.

  2. Cambridge Comma*

    Great topic!
    For the question of what do you do when you have more work than you can take on, I wonder if as well as a budget, that might be a moment to take on a member of staff to do any lower level tasks?
    ( I dream of the day that I could take on a bright young whippersnapper to check bibliographical references for me while I do the rest of the editing.)

    1. Lynne (The Wiser Miser)*

      Hey CC! Lynne here. That’s a great point – and for a lot of people it’s the right decision. It all depends on your priorities. Do you want to grow your business that big, or are you more interested in keeping things small and manageable? Do you have the time, interest, and skills to manage someone? As we know from Alison, that’s a different skillset. The benefits from having some staff are many, like being able to hand the work off and take some time to yourself, but there are some downsides too. I’ve definitely seen folks who thought the solution was hiring staff and then ended up backpedaling a few months later. I’d love to hear from others on this, too!

    3. SJPufendork*

      When I co-owned a small business year ago, when we got to the point of having too much work, we really looked hard at our medium term forecast before we hired anyone. This was mainly because, if someone took a job with us, we wanted to be able to commit to them that they would still have that job (in a sense of workload) for at least a year. Many times, we realized that the work spike was really just a short term blip (3-6 months) so it wasn’t fair to a potential employee to bring them on knowing full well we’d likely be laying them off shortly. Likewise we had to make sure we willing to absorb the fully loaded cost of the a new person (taxes, benefits etc) to move forward with hiring.

      This meant, in a practical sense, there were times when we turned down work because the price point/amount of work didn’t make sense in work load terms. Other times, we looked at our forecast and realized it was time to make the hire, but we were generally cautious (after having to backpedal at least one because we were overly optimistic about the income stream).

      It worked out ok in the end. We were profitable while we were in business, were able to pay ourselves market wages, and eventually sold to a larger firm after making it work for ~ 9 years. But that was because we oftentimes decided that we didn’t really want to grow and were happy just to make a comfortable living.

      1. Lynne (The Wiser Miser)*

        This is a really great point to consider! Important to make sure the growth is sustainable before bringing on more folks. It’s one thing to take the risk on as a business owner, but you don’t want to pass that uncertainty onto employees.

      2. Natalie*

        That can also be a sign that some subcontracting relationships might be helpful, obviously depending on the nature of your work. My dad farms out coding projects to other, smaller freelancers during those blips. He gets to make some cash and keep the clients, the other coders get work, everyone wins.

        2. SJPufendork*

          That’s actually what we ended up doing a fair amount of the time. We subcontracted as need be (and had reciprocal relationships so the other firms would subcontract with us), which worked well except that occasionally we couldn’t find a contractor at a good rate to make things worthwhile.

          I think we were in year 2 or 3 before we realized it was ok to turn down work and/or majorly up the going rate. I think that and the cautious approach we took was really where our (I am a woman, as is my former business partner) socialization/imposter syndrome kicked in. We didn’t want to “let people down” (where people = potential clients).

          1. Lynne (The Wiser Miser)*

            Raising rates and turning down work just feels wrong, somehow, even when you know you should, you know you deliver that much value, and you know it is not that big of a deal to potential clients usually.

            I recently saw a quote that was something along the lines of “I wish I had the confidence of a mediocre white guy” so I’ve definitely found myself asking “What would a mediocre white guy do?” and then doing that. It’s been great.

  3. CM*

    Alison, I’m picturing you like Scrooge McDuck, diving into a swimming pool filled with gold coins.

    I’d be very interested in learning how Lynne gets and cultivates her clients.

    1. Lynne (The Wiser Miser)*

      I am also loving the mental image I have of Alison rolling around in gold coins, throwing them in the air, laughing softly to herself. SO GOOD.

      I have gotten my clients almost 100% from word of mouth. Initially it started because friends of friends heard that I was “good with money” and reached out for help, which eventually became enough of a thing that I started doing it professionally, and it’s sortof rolled from there. I’ve been very lucky!

    3. OlympiasEpiriot*

      I imagined it more like Smaug on the heap of gold in The Hobbit.

      Not that that would be comfy…

      1. Sigrid*

        I’ve often thought that that “hide so thick arrows can’t peirce it” trait was an evolutionary response of dragons to their habit of nesting on piles of metal and (cut) stones rather than an evolved defence mechanism.

  5. Broke*

    Oof. I keep hearing about budgeting as a panacea for financial ills, but I’m in a position right now where I’m living right on the edge and a budget really only tells me “okay, try not to eat this month.”

    Lynne, if you don’t mind me asking more here, what is your advice for people who find that the numbers really just aren’t adding up?

    1. Lynne (The Wiser Miser)*

      Hey Broke – I totally get that. To be real, there are some times when the numbers simply don’t add up, like it sounds like is what happening in your situation. That said, a lot of folks come to me thinking that’s their situation and when we’re done they find that they’re not as bad off as they thought, and we’re able to identify some areas where acting frugally can help, or a budget can help. Oftentimes there’s some hidden spending that they’ve been a little blind to, or a partner or spouse who isn’t on board with their financial goals, and we work together to figure out a plan to work on that.

      But like you said, a budget can only go so far. Without knowing your specifics it’s tough to say, but often that calls for getting drastic for a period of time. Being a one-car family often can help if it’s doable, getting a roommate, looking for a new job, moving somewhere else can help. I know there have been times in my own life where I’ve done things to save money that I wouldn’t want to do long term or if I didn’t have to, but they worked at the time. Things like taking in a renter in my house, doing a ton of dogsitting (great gig, perfect for nights and weekends!), and doing a series of bizarre side jobs like mystery shopping (not recommended). Would any of those work for you? Hard to say, but having a clear goal in mind can really help you get through a few months or a year of something crappy so you can get your head above water.

      And finally – the number one recommendation I have for anyone, but particularly those who are truly broke, is to record all the money that comes in and out of your life. I used to carry around a small notebook and do this. You don’t need to categorize anything or even look at them again, but bringing your attention to your money in this way has an amazing ability to start to change things for the better, and the effect usually lasts at least a few months. That, combined with some short term drastic frugality might get you to a place where a legit budget could move you ahead. Hope that helps!

      1. Broke*

        Thank you! I’ve been doing what I can for the moment, and tracking every penny is already something I’m employing (the last thing I can afford is to have something bounce!) but the distinction between what is survivable short-term versus long-term is a good one. I tend to think any option needs to be long term, but you’re right, it doesn’t necessarily.

        1. Lynne (The Wiser Miser)*

          It can help so much to think of things as being concrete things with a clear end in sight. I did a sprint triathlon last summer after working really hard for years to get in shape, it was my holy grail. It was so so hard, but eventually I found myself repeating during particularly grueling training sessions “I can do anything for 12 minutes”. Life became a series of 12 minute increments. (why 12 minutes? who knows, I have an odd brain).

    2. Catherine*

      For me, what made a big difference when I was in that situation was going to my former boss (in food service) and asking to pick up an occasional shift. It was rough because it was a long drive, and I was already working full time, but when every penny counts even 2-4 shifts per month = breathing room. The stress of working extra days was less than the stress of not being able to pay a bill.
      Then, since my employer offered a fantastic tuition benefit, I went back to school to finish a degree (allowing me to defer my $200/month student loan payment), while still working full time and picking up shifts at the restaurant. It was a lot, but once again, less stressful than worrying about money.

  6. EddieSherbert*

    Hey Lynne, what do you think of the site Mint.com? I’m halfheartedly working on my budgeting skills, but I know I could be doing better, and a couple friends recommended that one.

    (though I’ll probably check out YNAB too, since you mentioned it in an earlier comment)

    1. Libervermis*

      I’m not Lynne, but I’ve found the difference between Mint and YNAB is that Mint is good for tracking what you’re spending while YNAB is good for planning what you’ll spend. Mint is reactive/current, YNAB is current/proactive. Both are great depending on what you need them for.

      I’ve been using YNAB for several years and love it! I’ve heard good things about an app called Mvelope, if you’re interested in a free option.

      1. Van Wilder*

        Agreed. I used mint for a few years (technically still have an account but rarely check it). It’s interesting to see where my money’s going. And I set up budgets but there was nothing to encourage me to stick to it. I also find it a lot of work to recategorize purchases that have been incorrectly categorized.

        I haven’t been able to use YNAB because I’m always in overdraft =\ and it requires you to budget the money in your account, which doesn’t work if you have -$500. (Short term problem which will be over in November when my husband starts his new job – maybe I’ll finally shell out for YNAB then.)

      2. Natalie*

        This is relevant to my interests. My husband and I started using Mint when we first combined finances, basically because it was easy to set up and we were only looking for information about our spending patterns at the time. As we’ve moved into more active budgeting, I’ve definitely found it wanting. I guess I didn’t realize how YNAB worked, but now I’m intrigued.

    2. Lynne (The Wiser Miser)*

      Hey Eddie – here’s my one second opinion of Mint : better than nothing, not that good.

      Something like Mint can be helpful in that it helps you bring your attention and awareness to your money, which I am 100% in favor of. That said, it’s entirely backwards looking and just tells you where your money already went. Don’t you want to tell your money where to go, instead of it just waving at you from the rearview mirror?

      1. EddieSherbert*

        Thanks, that makes sense. I’ll keep that in mind when comparing it to other sites (I have plenty of recommendations to check out now!)

    3. Stephanie*

      Yeah, I think Mint’s great for seeing where things are going. What I do find annoying about it is the upselling, e.g. “Hey, you spend a lot on gas. Why don’t you sign up for this credit card and get 5% back?”

        1. EddieSherbert*

          Ah, that could definitely get annoying (I guess that’s how it’s free when some of the others aren’t)!

          1. Natalie*

            Yep, that’s what keeps it free. All told, they’re not as bad as some with the up selling – you can close or “ignore” the suggestions and there’s no blaring ads or anything. But it is more of a starting place than an ending place.

    4. Kyrielle*

      I used Mint and I ultimately deleted my account. I found it automated (handy) but not very informative (not handy), retrospective (not handy), and largely covering what went through my accounts. (I don’t know if there was a way to reflect cash transactions, but I didn’t see it).

      It didn’t improve my awareness of my money much at all, and they tried to sell me investing services. Not for me.

      I tried YNAB, but I had troubles with it and didn’t love the feature set/cost. I’m now using an app called Goodbudget that does a lot of the same things, including allowing my husband and I to share information between our devices (I believe YNAB did that also, but I never deployed it all the way). It’s more manual than YNAB, not linked to my accounts at all, but I find that helps me actually pay attention to what’s going on. (I do reconcile my accounts with it once or twice a month in case anything was missed, though, and to catch the auto-bills and auto-deposits.)

      It can be used, like YNAB, so that you’re living on last month’s money (assuming your financial situation allows), by just dropping earned money into the “uncategorized” trough and then categorizing it at the start of the next month. It does have limits unless you pay, but the limits work for our household.

      1. Lynne (The Wiser Miser)*

        Kyrielle – I hadn’t heard of Goodbudget, I’ll have to check it out! I’m a longtime YNAB fanatic but always interested in what else is out there, particularly since a lot of folks have (justifiably) issues with the learning curve with YNAB.

      4. V Dubs*

        I used to use GoodBudget, but changed to Dave Ramsey’s EveryDollar app/site when he rolled it out (almost a year ago?). I prefer EveryDollar to GoodBudget because it lets me set the budget for the month, I see what percentage I spend in certain categories, and I can do savings/spendings there too. Goodbudget was a bit clunky for me because I budgeted monthly, not based on my pay schedule, and I had to fake my income at the start of the month to set up a budget.

    5. fposte*

      Just to throw another possibility into the mix–I use an app called Best Budget. It’s completely self-contained, which I realize is a drawback for many users since everything (save for recurring stuff) has to be entered manually, but it works for me. It’s basically a step above an Excel sheet for devices, so it’s got really low bars to entry, which is what I appreciated.

      1. fposte*

        I should clarify that I don’t think this would be great for work (where I do use Excel), but it’s great for getting into the habit of personal expense tracking.

        1. Lynne (The Wiser Miser)*

          Manual entry has some downsides, like being a pain in the butt, but I do love how much it makes you face the money. If you aren’t looking at the money, “touching” it (virtually), it’s easy to not take it seriously.

          1. Ife*

            When I was learning MS Access, I created a database to help track my expenses and show what I had spent. It works really, super awesome for exactly that reason — I have to save my receipts, check my bank account, and enter everything in manually, so I know exactly what I and my fiance are spending, and it’s a helpful reminder of, “hey Ife, you went out to eat a lot this week, cut that out.” It also works really terribly for that reason — I tend to let receipts pile up and then the pile is too daunting, or I forget to ask for a receipt, etc. Maybe this is the kick I need to get back into the habit of tracking! I did it for a year straight, I’m sure I can do it again.

          2. fposte*

            It’s all about the habit, isn’t it? I update every week, checking all the credit card and bank accounts, on a weekend morning with music playing and a special coffee treat. It’s therefore kind of a relaxing maintenance thing.

            Then there’s the quarterly orgy of updating all the spreadsheets, but that’s too much pleasure to publicly discuss in any decent way.

            1. fposte*

              Oh, and hand-entry can be useful on the “no” side when it comes to impulse purchases–if it’s not worth typing it in, it’s not worth spending the money on.

    6. Bob*

      I’ve never used Mint but I recently signed up for Credit Karma. In addition to seeing all of my account sin one place (which I assume Mint would also do), playing with the tools on their site gave me a better understanding of how credit scores work. You can run scenarios like what if I apply for a new credit card, what if I close my oldest account or what if I let an account get past due and it will show an estimate of how it will affect your credit score. There are ads for credit cards and stuff but nothing too intrusive.

      2. LBK*

        Another fan of Credit Karma here, I signed up a while ago and I love it. It’s totally supported by their deals with credit card/loan providers, so the pushiness of those products is a little annoying, but I find it’s worth it for the tools they provide (and the credit card suggester actually was helpful when I was in the market for a new one).

        One of my favorite features of the site is that it shows all of your credit card balances in one spot, which is helpful because I have a bunch and every so often I’ll find a charge from some auto-pay thing I’d forgotten I’d signed up for on a card I don’t use anymore (and therefore have stopped reading the statements for since I usually assume they’ll all say $0).

    7. Charlotte*

      I, too, didn’t find mint.com very useful for me. I started keeping track of my expenses in a spreadsheet using a free spreadsheet template I found online almost 10 years ago. As tedious as it is, I enter in all of my (now our) expenses in the spreadsheet just to keep track of where things are going. At the end of each month (usually) and at the end of each year, I add up expenses into categories (gas, parking, food, restaurants, etc.) to get a rough idea of where things were going. It’s been so freeing just to be aware of where the money is going, as Lynne mentioned. I also put in another column our income and what we’re putting into our 401k’s every month. It’s not exact; sometimes I miss cash expenses, but overall, it’s been really helpful simply having the knowledge. Like Lynne, I often advocate to friends as well to start by just keeping track of every penny in and out for a few months, the whole year if you can. That is a solid first step in managing personal finances.

    8. themmases*

      I’ve been using Mint for several years but have been considering switching to something else.

      It is really useful for understanding where your money *has been* going. When my partner and I combined our money, we used it to get an idea of what we’d each been spending on things that should come out of a joint account in the future. Want to know what groceries cost you in a normal month, or quickly find out what month your cable bill went up? Mint is great for that.

      However, the automated nature of it is a double edged sword. I can easily not check it for weeks or months because no action is required from me to get all the data in there. At the same time, it will automate things you may not want. For example, it will try to automatically detect the nature of your transactions which is only a good thing if you agree with Mint’s categories. Personally I don’t consider it useful to group restaurants and groceries under “food” since one is a treat and one is a household expense.

      You can create new categories, but I’ve never been able to delete the old ones. Mint also does not understand what’s going on with my student loans– because I am not in repayment yet, if I make a goal to start paying them a little early, that goal will get updated to “complete” immediately. The budgets (and reconciling “budgets” and “goals”) are confusing at best.

  7. fposte*

    For us more on the miserly side, do you suggest treating budget elements as “must spend” as well as “must not spend more”? I’m not an entrepreneur but I do run a unit whose budget I have at least local control over. We don’t have much money and aren’t getting more (state university), so my reaction tends to be to lock up the purse completely–which is dumb, because often that means somebody else will take the money.

    1. Lynne (The Wiser Miser)*

      fposte – I totally get this. There’s a reason I call myself “The Wiser Miser”. I’m totally a penny pinching weirdo who delights in reusing ziploc bags. (NB: I don’t recommend other people be like this, you do you, this just makes me happy). I used to really focus on reducing spending as much as possible. That’s obviously a huge part of the equation, but particularly in a business context the money you’ve allocated is because *you think that’s how much you’ll need*. Use the money! Especially since otherwise someone in marketing or HR will get your money and you will receive no reward for your frugal ways.

      In a personal/family context, I think to think of the money in a budget as available for whatever I’ve noted it for. That way I can spend the money without feeling guilty, but if I change my mind, something comes up, whatever, I can make it available for something else. An important part of any budget is putting some money aside for savings, too, which can help satisfy the part of you, like Alison, that just wants to hoard gold.

      1. fposte*

        Yeah, I’m great at the hoarding gold, which has been a great help personally. But at work it’s more like hoarding raspberries–use it fast or it’s gone :-).

      2. Aurion*

        Haha, someone else who delights in reusing ziploc bags? I’ve found my people! (Er, person.)

        I’m also a weirdo who has Issues about “But Waste!1!!111!” :) Generally, if it’s not reusable to the end of eternity, I won’t buy it.

        1. EddieSherbert*

          I was just going to say – there are some great meant-to-be-reusable alternatives to plastic ziploc baggies! Count me in!

        2. Lynne (The Wiser Miser)*

          Aurion – I feel like you’d appreciate that I am just now replacing a pair of shoes ($40 flats from Target) I bought for my wedding 2 years ago and then wore basically every day since then. I’m only replacing them because they’re ridiculously falling apart. The fact that I haven’t yet figured out where to wear my wedding dress again is bothering me. Big fan of things having multiple purposes!

          1. Aurion*

            Haha, I purchased the shoes currently on my feet (a pair of Clarks slip-ons) in…2008. Still comfy and quite wearable! I wore them out considerably at my last job when I wore them every day because I couldn’t find other comfy work-appropriate shoes to rotate with; otherwise, I think these shoes would have about 20% less wear on them. I still plan on wearing these for another two years at least!

            I actually texted my friend a picture of the mug she gave me in 2007. Her comment: “wow you’ve kept it in really good condition. No chipped paint or anything”. Short of dropping it, I fully intend on keeping it in mint condition (despite regular use!) for another 10 years or so. (It helps that it’s really, really cute and worth the effort.)

          2. OlympiasEpiriot*

            Quilting. Seriously. I know more than one person who has made a quilt out of Special Occasion Clothes. Of course, if it was covered in sequins or seed pearls, that can be uncomfortable. Ymmv.

            1. Lynne (The Wiser Miser)*

              I have a huge bin of fabric scraps that I’ve collected over the years with the idea that I’d quilt them. It hasn’t happened yet – my wife wants me to throw them away but I’m leaning in.

          3. karenelainer*

            I have worn my wedding dress three times. Once to an event in college, once in my actual wedding and once to a work event. I bought it with an employee discount at David’s Bridal as a college student.

      3. LBK*

        I was raised by a mother who reused Ziploc bags (we had a giant drawer full of them). It wasn’t until several years after moving out that I realized that wasn’t a thing that everyone did.

  8. TMA*

    In terms of awareness, I have learned that most people think they don’t make enough money and that’s the root of their money issues; in reality most people I work with have enough money but they spend too much because they don’t pay attention. Often, they don’t pay attention because they’re afraid of what they’ll learn.

    This is so true! My husband and I recently (probably about a month ago) got serious about monitoring our spending and while also working to save more. I can’t tell you how freeing it is! Money used to make me so anxious, but lately I have been so relaxed about it because I know exactly how much and where we are spending. The

    1. fposte*

      It’s amazing, isn’t it? It’s also been really helpful for me in flagging any creep tendencies, when what used to be splurging starts to look like the norm.

    2. Lynne (The Wiser Miser)*

      I mentioned it in another comment, but I think the single most powerful thing you can do is to bring awareness to your spending. I suggest people record their spending and income in some way for a while if they’re not up for a full fledged budget – even a cheap notebook will do. It’s like that old business adage – what gets measured gets improved. Even if you don’t look at it again, something about knowing “I have to write this down” means you can’t lie to yourself anymore.

      1. Kyrielle*

        It can totally have the opposite effect too! I was so worried about our vacation this month and how much it would cost, at the start of the year. I knew we could afford it, I just felt like I had to be cautious and tight with the money.

        I started running the everything in/out budget in May or June this year…and by the time we got to August, I could see we had enough money. “We’re going to be on vacation, so I’m going to over-fund ‘restaurants’ because we will want to eat out, and I have to get food that won’t hurt me. And budget for the vacation itself – hotel, fun stuff. Extra money in the ‘kids fund’ for things to keep them happy on vacation and because something always comes up.” And so on. I had the money to put in the categories, so I did. (Caveat – I did this knowing our savings wouldn’t grow that money. And also that we could afford to have them not grow.)

        Result – this vacation was awesome *and* I wasn’t stressing about money. We got home after a lot of fun with a list of board and card games we had played and wanted to buy…and enough money left over in the ‘extra vacation fund’ that I just went ahead and bought several of them.

        I realize not everyone will see the benefit that way, because a lot of people really do have to be careful with the money. But if you’re worrying about it and *don’t* need to be as worried as you are, it can also be incredibly freeing.

        1. Lynne (The Wiser Miser)*

          It feels SO good to spend money on something you want to spend it on and not have any anxiety about it. So glad you got to experience that with something that can be so stressful but that should be the opposite!

          1. Kyrielle*

            My kids are too. There was at least one big “pleeeeease” moment on the trip where I looked at the time and concluded there was no time issue, opened the budget app, looked at the prices, shrugged and said “sure! We can do this.”

            I would have had 50/50 odds of nixing it without the budget – it wasn’t a cheap beg. But because family made meals (when I’d expected at *least* 50% restaurants) on the first half of the trip, we had the money for it, easily. And because I had the budget app there and up to date, I knew it.

            My youngest hasn’t stopped telling his classmates about that experience yet (he’s been back to pre-school for three days now!).

        2. Kyrielle*

          Argh. In the parenthetical, our savings wouldn’t grow that *month*. Sheesh. :) I correct mostly because “wouldn’t grow that money” almost sounds like it should make sense, but doesn’t…month. I meant month.

        3. fposte*

          That is what’s been crucial for me. I actually sat down with a document and identified what “enough” meant for various possible expenditures, so that I know when I have enough.

        4. LBK*

          This has been my experience lately, too – I travel a lot and usually stress like crazy about being able to afford it. Budgeting everything out clearly (and being realistic about those budgets!) has helped me so much because I’ve been able to have peace of mind about still spending fairly normally when I’m not on vacation and being able to afford my trips as well. Usually I feel like I have to scrimp together every cent I can for the rest of the year if I want to travel and now thanks to promotions and raises within the last year or so, I’m in a place where I can confidently relax. It’s a huge sigh of relief to see the numbers laid out in front of you and say “Huh, the math all works out just fine.”

    3. Jinx*

      I try to do this as well – I check my accounts at least once every two days, so I always know exactly how much I have and how much of that is earmarked for bills, food, etc. My husband isn’t so good at that – he tends to spend first then check later, especially when it comes to food. I used to have the same problem, and it’s very stressful – I was using a chunk of my first paycheck each month to pay off last month’s credit card bill, and it was only because I wasn’t being budget proactive.

      I still don’t have a detailed budget, but I did write out all my expenses to determine how much is left over after saving and spending – that’s my ‘fun money’ each month. It’s very freeing to be able to say “I can spent 20$ on x today, because I know I have 100$ left”.

      1. Lynne (The Wiser Miser)*

        If you’re already comfortable with this, I’d recommend taking it one step further and making sure you’re including things that are either predictable, irregular expenses (think: car registration, holidays, vacation) and unpredictable, irregular expenses (home or car repairs are a big one here, medical bills). I use and recommend YNAB because they make it easy, but including those in a spreadsheet helps too. The first time you go to pay a big annual bill without sweating it will feel incredible.

        1. Jinx*

          That’s a really good point – a couple of months ago I had to get cat vaccinations followed by a death in the family (the funeral was at my family’s home across the country), and it wiped out my savings. It was a wake up call. The cat shots especially, which were predictable and should have been saved for in advance, I just didn’t. My first thought after finding out about the funeral “I’m not even sure if I can afford to get there”, and that really sucked. My job pays well enough that I shouldn’t have those issues, it’s just bad money habits that I’m (still) learning to overcome.

          1. Lynne (The Wiser Miser)*

            Totally. I had a similar issue with a pet one time, and it felt so terrible to be thinking about the life of my beloved cat and worrying about my budget at the same time. I vowed then that I’d work to make sure I never had to make decisions about my pet’s life and quality of life because of money again. A general purpose emergency fund can be really helpful with things like family funerals, because those are obviously unpredictable.

  9. Jinx*

    “I budget and I turn away clients, but I still just want all the money. I want to sit atop a pile of gold pieces and rub my hands together while I count them.”

    I think secretly most of us want to be dragons. I know I do.

      2. Kelly L.*

        “My co-worker nuked fish in the microwave again. Should I leave a note, or just burninate the whole countryside?”

      3. Lemon Zinger*

        The answer to all questions will be “Breathe fire on [problem] and the situation should resolve itself.”

  10. TootsNYC*

    on savings:

    I’ve been able to save almost always, and right now I haven’t been doing so, and it’s stressing me out.

    I discovered the absolute peace that comes when you have that cushion, bcs I work in a field in which layoffs are common (I’ve been laid off 9 times in my 34-year career, and I’ve seen layoffs happen around me about once every 18 months).

    And when I had a job in which I was miserable, it was comforting to know that if I’d -had- to quit, I had a half a year’s salary (OK, not half of -my- salary, but half of a reasonable lower-level salary) in savings.

    We just had a big reorg, and I came out on top, but that also means I’m inching back up to that “you make too much, we’re layout you off” state, and I want to sit down and figure out how I can be banking about 1/3 of my salary. (In other words, pretend I make only 2/3 of what I do. I think that’s actually feasible.)

      1. A Non*

        Amen. I got hit with labyrinthitis in March – like most forms of vertigo, it struck out of the blue. One day I was doing aerial acrobatics, the next day I was too dizzy to drive. Unlike most forms of vertigo, mine’s stuck around long enough for me to run out of FMLA and lose my job. I have never been so happy to have a good savings account! Due to an interaction we don’t fully understand, anxiety and stress makes vertigo worse. So having enough savings has not only funded my recovery time, it’s literally made recovery faster. My PT thinks I’ll be back to aerials in a couple more months.

          1. A Non*

            :-D It is pretty darn cool. Many of the traditional circus arts – especially aerials, and even flying trapeze – are breaking out of the ‘have to be born into a circus family’ mold and into ‘lessons for everyone!’ It’s surprisingly accessible at a beginner level – I was more or less a couch potato when I started. And the age range at my school is from 5 years to 60+. The majority of adult students are women in their 20s, 30s, and 40s. If you want to give it a try, I highly encourage it!

  11. Mack*

    I love the insights in this post! My husband and I have finally kicked our budgeting/debt paying into high gear after about a year of just tracking what we were spending and making minor adjustments there. We hope to start/own our own business one day, so getting our personal budget on track is a huge step for us.

    What do you think about having multiple savings accounts to keep things like emergency fund/vacation fund/medical fund etc. separate? We also were struggle with feeling like we can’t “take” from the emergency fund for things like a larger than expected medical bill.

    1. Lynne (The Wiser Miser)*

      Hey Mack! What I’d recommend is trying as much as possible to move towards looking at your budget to tell you what you can spend, rather than your bank account. What that means in practical terms is you’ll end up with a ridiculously high checking account balance but still look at your budget and say “OK we can’t afford that nice restaurant this month, but let’s grab some takeout instead” where before you were looking at your bank and thinking “wow! let’s go out!” and then your medical bills would come in and you’d hate it. You can do this however you do budgeting, but just make sure that your budget is leaving you a little wiggle room for the unexpected.

      If that’s more than you can take on right now (I get that – I used to have like 6 checking accounts to make sure I didn’t accidentally spend my mortgage money) I have some clients that use and love Capital One 360 since it allows you to easily open a bunch of accounts for different purposes, and it’s easy to transfer between them. Offline banks you can do this too, but I know CapOne360 specifically is designed for this purpose.

    2. Cordelia Naismith*

      One service I really like if you’re trying to save for a specific goal is SmartyPig. You can open a savings account there with a pretty good interest rate. It automatically takes money out of your checking account every month and puts it into savings (you tell it how much to take, but once you’ve got it set up, it’s automatic). And if you want to take money out, it takes a couple of days to get it, so it discourages impulse spending from savings.

      Ultimately, I think it’s easier to manage if you just have one savings account, and keep track of your different emergency funds in the budget, but you should do whatever works for you.

      1. Cordelia Naismith*

        Forgot to say — in SmartyPig, you can fund more than one goal at a time. So you can set up an emergency fund goal, a medical fund goal, a new car/car repair goal, whatever. You can see the progress you’re making towards each goal separately.

  12. Master Bean Counter*

    Lynne,

    I’ve always wanted another opinion on something. Assuming you have enough savings stored away to cover two-three months worth expenses, should you focus on saving more or paying down bills (mortgage, loans, etc.) so it doesn’t cost you as much to live in the future?
    Any idea on where the balancing point should be in that equation?

    1. Lynne (The Wiser Miser)*

      Hey Bean Counter – great question. Age old question, really. I think this comes down to balancing your priorities and your comfort level. I’m a big fan of using money to buy freedom, rather than things. What that means in practice is once you’ve got some money socked away and your bills covered, if you find you have some left over I use it on whatever reduces my stress and gives me more time to spend on what I love. For some that means paying down debts more aggressively, saving for early retirement, that sort of thing. For others it might mean that a spouse can stay home with the family, or changing jobs to something that you enjoy more, or has a flexible schedule, something like that.

      Personally I’m all about reducing expenses as much as possible so that *I* get to decide whether I want to work, not my budget or my bank account. Thankfully, helping people with their money is the thing that I can’t not do (https://www.askamanager.org/2007/08/steve-at-all-things-workplace-makes.html), so I expect that I’ll be doing that until they cart me off in a pine box, but I don’t want my past self’s decisions to put a damper on what I can do in the future, as much as is feasible.

    2. Ask a Manager* Post author

      I’m curious to hear Lynne’s take on this, but I might say that 2-3 months expenses isn’t enough and you should aim for at least six months before you start thinking about paying down “good” debt like mortgages. I just think 2-3 months could get wiped out pretty fast if someone lost a job or got sick, etc.

      1. BRR*

        I’m with you on this. A lot of people say 6 and Suze Orman says 8. I think most people aren’t in danger of having too much in savings so it’s a while before they hit the point of “they should have some of their money be working more for them.”

        1. Lynne (The Wiser Miser)*

          It’s a rare person I meet indeed who I’d say has “too much” in savings. Particularly since interest rates are dismal, the security of having it there beats any return you’d get outside the market right now, and I do not recommend stocks as “savings” for obvious reasons.

    3. Annon Today*

      I have been struggling with this as well. We also have the first of multiple children heading to college in 2 years and I am in a straight up panic about the FAFSA, etc.
      I come from family of “pay down the mortgage” and spouse comes from “never pay the mortgage down – save!”

      1. Lynne (The Wiser Miser)*

        If it’s any help, while I’m generally on the “save” side, home equity isn’t factored in when calculating the expected family contribution (EFC is “the number” the comes out of FAFSA and is the primary number used when calculating how much you’ll get in aid), but savings and other assets are. I believe that equity in your primary home and retirement savings are the only assets excluded. So, in this very specific example, paying down the mortgage (or better: putting it into retirement savings) may make more sense, since if you’ve got a thousand bucks in a savings account they’re going to want that for tuition. But if your plan includes relying heavily on need-based aid, might be worth chucking a little extra in your 401K or at your mortgage for a while. That said, I’m (no longer) a financial aid advisor, so definitely worth talking to someone who hasn’t been out of the industry for a decade before making those decisions!

  13. Florida*

    Lynne,
    Are their any things that people spend money on (or too much money on) that just drive you crazy? I’m thinking of things like you have a client who can barely make ends meet, but they eat out every meal or spend buy 10 lottery tickets a week. Or even someone who is making ends meet and saving a little but still they seem to be wasting money on something that just seems absolutely ridiculous.
    I’m sure you could pick out random example from clients. I’m wondering more if there are common trends that just make you cringe inside.

    1. Lynne (The Wiser Miser)*

      With my business clients, I see a lot of recurring expenses for things like business coaches and mastermind groups, which can and often are totally helpful, but just as often are wastes of money that don’t drive a reasonable return. The other thing is what I call “business vacations”, like when a client wanted to have her business pay for a very clearly personal vacation because it would help her relax and focus on business when she got back to it.

      With individuals and families, what I see is folks buying convenience. This comes mostly in the form of eating out a ton, but there are other examples too. I think it drives me crazy because I am completely, utterly guilty of doing this in my own life (freezer full of fancy frozen pizza, anyone?).

  14. MsMaryMary*

    I’m interested in this too! Also the balance between liquid savings (an extra large balance in your checking account, or a bank savings account with pitiful interest) and longer term but less accessible savings like a mutual fund or retirement savings accounts.

    2. Master Bean Counter*

      Good question! I’m at a point where I’m starting to look at putting some of my savings over to CD’s. A little bit better interest rate and stacking a few of them so I have one mature every 2-3 months. But I have wondered about the other options.

      1. Lynne (The Wiser Miser)*

        I’ll be real with you guys – other than some money I put into investments and don’t touch, I basically keep everything liquid. Once interest rates start to improve I’ll probably change that strategy, but I’m a big fan of keeping things simple. Trying to manage what’s maturing when and when to change things is not my cup of tea for such a low return.

        1. The Cosmic Avenger*

          Even though I love spreadsheets and calculating projections, I am also a big fan of keeping it simple. It’s too common to let the perfect be the enemy of the possible, so by keeping my investment and savings strategies dead simple (investing mostly in S&P index funds, separate accounts for emergency fund/new car fund/charitable giving fund), I make it less likely that I’ll bury my head in the sand and coast because I don’t want to deal. I’ve also been able to add a few twists here and there as I feel like “I got this” with my current strategy.

          2. Just A Girl*

            +1 to simplicity!

            We have one bank account, a interest-bearing checking account with a local credit union, and one investment account consisting of one low-cost index fund. (We may diversify more later but for now good is better than perfect in theory but not done in practice.) We set a cash floor representing a few months’ expenses and transfer everything else into the investment account, which we could liquidate if catastrophe ever strikes.

        2. Master Bean Counter*

          And your thoughts are exactly why I really haven’t done anything like that yet.

  15. Elle*

    As someone who is self-employed, I’ve forced myself to become a savings guru so I can sleep at night. However, while I feel great about my savings right now, I’ve recently found I’m expecting. While I’m incredibly excited, I’m nervous for unexpected expenses and having to take a break from work. Any suggestions for how to get comfort without being able to nail out a perfect budget or planning for the unexpected?

    1. Lynne (The Wiser Miser)*

      I think the thing here is to know that your budget will never be perfect, but get it so that it covers enough that you’re comfortable that the vast majority of things you’re going to encounter are covered, but simple enough that you’re not spending a ton of time on it. That and a big general-purpose emergency fund will go a long way. I’d also suggest doing some research so that as much as is feasible, there are fewer truly unexpected things. You should be able to get at least a ballpark figure on medical costs (though make sure to check into all the costs – anesthesiologists are separate, the doctor might bill separate from the hospital, etc etc), you should be able to get a sense of child care costs, stuff like that. Buy only what you need and buy it in advance (check for sales, buy stuff used, borrow from friends) so you aren’t worried that something is going to come up that you weren’t ready for.

      And, congrats! My daughter is just over 3 months old, so I’m reeling with the costs myself. Whoa medical bills! If it makes sense for you, we are saving a ton of money using cloth diapers.

      2. Anne*

        You may be able to log into your insurance website and get an estimate for the cost of the birth at your hospital – I know Cigna has that, and from what I remember it seemed to be ballpark close when my son was born 2 years ago. Also, I have no idea how this works for self-employed, but having short-term disability insurance may help bridge the gap with pay if you can get it, so that could be something to check into.

        I’m pregnant and due next month, and am seriously considering trying to give birth without an epidural with one reason being to save money on the anesthesiologist (it was over $1,000!). This may be certifiably crazy though. :)

        And congrats! I agree with Lynne’s advice about buying on sale, used, borrowing, etc. Babies grow out of things quickly and really don’t need much.

  16. DJ*

    “To some extent I think this is made worse because people don’t save, so they don’t know how great it is. I think it’s something you have to experience to understand.”

    This is so true! Almost a year ago, we lost 90% of our personal belongings in a fire. We are Dave Ramsey fans and had our $1000 baby emergency fund. It was a stressful time, and the local Red Cross chapter helped us out (and we had renters insurance). But before we even knew they would help us financially, there was no stress revolving around money. We had the cash for clothes, food etc. All we had to stress about was the emotional well being of our children and the enormity of replacing everything we owned.

    I can imagine that the peace around finances is even greater when you’re an entrepreneur and have an emergency fund.

    1. Lynne (The Wiser Miser)*

      DJ I’m so glad you and your family are OK! Having insurance is so helpful in situations like these, but you’re right – they often don’t pay up immediately or it’s in limbo. Having access to some liquid cash to get things like a hotel for a few nights, some clothes and food, etc is huge. A number of years ago I had a situation where my employer missed a paycheck and called me panicking the day before I should have been paid. The feeling when I honestly said, with no anxiety, that it was totally fine and they could just get me next time was AMAZING.

  17. Florida*

    Lynne,

    Thanks for doing this interview. It was interesting. I think the relationship that people have with money is absolutely fascinating. I always say that money is the last taboo in our society (in America, at least). There are plenty of people who will tell you about their sex life before they tell you how much money they make.
    And all the ideas that people have about money being evil or money being good. How people view money is super interesting to me.
    I like how you called it money therapy because there probably is a lot of psychology involved in it.
    Thanks for sharing. Also, I love your business name. It’s perfect.

    1. Lynne (The Wiser Miser)*

      Thanks! You’re right, people are SO uncomfortable talking about money. There’s so much fear, shame, and blame going on. Money is just a tool, but we use it so often as a weapon to hurt ourselves and other people.

    2. BRR*

      I completely agree with you espciall on the money being evil/good. I think a lot of people think negatively of those who earn higher wages despite wanting to get paid more themselves. My husband grew up poor and he’s apprehensive about earning a good salary. Travel is a high priority for him and there’s this sense of accomplishment I think he wants in having to work harder to save for a trip. Like he really earned it instead of if we were just able to book a vacation without having to budget and save.

      1. Grapey*

        If it wasn’t for the gender I’d say I’m your husband. I also grew up poor, but with a lot of luck I’m now very financially secure.

        A note of warning I wish I had – it’s possible that when he has enough it might not feel like ‘enough’, or that spending ANY of it is reckless. That growing up poor mindset is preventing me from spending on luxuries because “I might need it someday.” When I do manage to allow myself a luxury, there’s tons of moments of “well I could take this non-stop flight for $30 more…but that’s $30…” which sounds utterly ridiculous.

        I don’t talk about it with my friends because they’re not well off and it just feels like bragging, and at the same time I don’t think it’s important enough to go to a therapist over. But it still bothers me.

        1. Lynne (The Wiser Miser)*

          Grapey – this is such a thing. Having scarce resources for a long time trains you to hoard things – attention, time, money, stuff, etc. and that can be so hard to break out of even if logically you know you should. And like you said, often it’s just big enough to be annoying but not big enough to feel like a Big Deal.

  18. Loblaw*

    Wow! I have been wanting to find someone like Lynne for awhile but had no idea where to look, thanks for posting this interview!

    Question – I know you mention your experience with small businesses–any experience helping with small restaurant finances and if not, any resource suggestions?

    1. Lynne (The Wiser Miser)*

      Hey Loblaw! I haven’t worked with a restaurant owner specifically, but a lot of what I do is applicable to any business. There are some things that are out of my wheelhouse, like inventory, tax advice, stuff like that, but I really focus on helping people get a broad view of cash flow and how that interacts with their goals. Some of the more nitty-gritty restaurant management stuff isn’t my bag, but I’d be happy to chat some more about how I might be able to help!
      http://www.calendly.com/wisermiser/free-first-call is where you (or anyone else) can schedule some time to chat with me.

  19. Nicole*

    I’m on board with saving money to the extent where I won’t buy anything that requires me to take money out of our savings account in order to pay for it. This is why I’m so anxious about needing a new car soon (mine is 16 years old) – I don’t want to touch our savings even though that is what it’s there for.

    In the same vein, I’m feeling very anxious that my husband’s unemployment runs out in a month and a half and we will have to take money out of savings to pay the bills. It’s been hard enough not being able to save since he lost his job but this is even worse. At what point is there peace of mind? We have a very healthy savings account that could support us both being out of work for quite awhile yet it still kills me to spend any of it even though that’s what it’s there for. How do I mentally get over that fear/anxiety?

    1. Lynne (The Wiser Miser)*

      Hey Nicole,

      I think this comes down to a few things. If you’ve got a lot of expenses, debt, stuff like that, even having a big savings account can feel like it’s not enough to make you feel stable and secure – so I’d recommend working on those as much as possible. It might also help to think about how often you’ve needed to take money out of savings – probably doesn’t happen that often, right? The chances are good that you’ll be able to replace the money before you need it again. That said, there are some other things going on, like your husband’s unemployment, that are contributing to you feeling less than stable, so while having savings can mitigate that it may not eliminate it. Are there areas where you can cut back expenses for a short time? You may already be doing that but worth thinking about. Can someone take on short term flexible gigs to help shore things up? I loved doing petsitting for a long time – good money to hang out and love on some great animals, and usually very flexible. If you’ve been through a lot of stress, that trauma can make it feel like things will never be stable again, so it can feel scary to take money out of savings because that’s your lifeboat. In that case, the issue isn’t really the savings, it’s the trauma and stress. Best of luck!

    2. Ife*

      I liked the suggestions others had of allocating the money in your savings account — this $X is for a car emergency/replacement, this $X is for medical bills, this $X is for true unpredictable emergencies, etc. Also for the unemployment situation, if you know how much you need to take out each month, that should help alleviate some anxiety — that way you can tell exactly how long the savings will last, and how much money it will take to get back to the same level.

    3. Mel*

      Peace of mind comes when you have enough savings to generate a large enough income stream that allows you to do what you want for the rest of your life without having to work anymore.

  20. Nanani*

    Maybe obvious since this is mostly a US based blog, but is your coaching also based in the US? Do you know of similar coaches elsewhere – and ideally for me, one with good advice on handling an international client base.

    The service sounds very interesting and I am right in your target audience, except maybe geographically :)

    1. Lynne (The Wiser Miser)*

      Hey Nanani! I am US based, though I’ve worked with international clients before. There are certainly some challenges and limitations to that, though. Currency conversion being a big one, if you work with folks in multiple countries. That said, I’d be happy to chat some more to see if I might be able to help. I don’t know of many other folks doing this that I can recommend, unfortunately, and the best one I know avoids working with international clients as a rule because it can be very tricky logistically.

      1. Nanani*

        Great! I have bookmarked your website and may get in touch in the near future.

        Currency conversion definitely is a big deal!

  21. matcha123*

    This is a pretty timely Q&A.
    I’ve been spending the past few months trying to figure out my relationship with money. I have no savings, but a lot of stuff, but a lot of stuff that I bought relatively inexpensively.
    I’ve found that in my case, I like to save, but when I restrict my spending I get anxious. When I lived at home, I’d dedicate a good amount of time to putting aside money, only to be forced to give it up to pay overdue household bills that my parent couldn’t afford. Eventually, I started spending almost as soon as I got money because I knew if I didn’t buy the thing I wanted ASAP, some thing would come up and force me to pay for a sibling’s trip or a shut-off notice.
    Having even a small cushion is so emotionally freeing. I just hate that as soon as I start saving, a family member has some kind of money crisis and I have to be the one to bail them out. I also hate that I have such a negative emotional reaction to cooking my own food. Great read and more to think over.

    1. Lynne (The Wiser Miser)*

      Hey Matcha
      It sounds like you’ve got some associations with money and family to give some more thought to. Are you still living at home? Establishing some personal boundaries might help you a lot, which I suspect you’re already working on. Saving will help, and consider that money off limits to your family. As far as buying things – not having any money to give to family gives you a great out, and the fact that you didn’t spend much on things can help you not feel guilty about spending everything. That said, the spending is just a symptom of the fact that you feel compelled to give everything to your family. What would happen if you said no? Food for thought.

    2. KR*

      Try looking at some Captain Awkward articles for establishing boundaries with your money! Also – if you budget the money to savings, it’s a valid excuse to say that you don’t have money available to spend. You need to take care of yourself first.

  22. Tomato Frog*

    This was great! Lynne, I’d be interested to hear how your clients get to you in the first place. As you note, money problems are often characterized by shame and avoidance, which are feelings that often prevent people from seeking professional help!

    1. Lynne (The Wiser Miser)*

      Hey TF! My clients come almost entirely from word of mouth. Essentially folks hear that I’m “good with money” and non-threatening and then tell others. There’s so so much fear, shame and blame around money. It can be so hard to find someone who feels trustworthy to talk about it with, so once people find me I’m fortunate in that they tend to spread the word.

  24. Church Dancing Honey Mustard*

    Question for Lynne – how exactly did you get into this line of work? I’ve been interested in making a career change (currently work in marketing) for a long time and am very passionate about financial literacy. (I’m actually getting ready to teach a class on it – that’s how passionate I am about it.)

    1. Lynne (The Wiser Miser)*

      Ha, your story is my story! I have an MBA in marketing and that’s been my bread and butter for a while, but I have long been really personally interested in financial literacy and personal finance, and gave casual advice to friends and family members for a long time. Eventually that turned into friends of friends, and then strangers who became clients. It’s been very organic.

      1. Bianca*

        How did you get around the cultural taboo of talking about money with friends and family? I think of myself as a person who handles her money quite well, and whenever I hear a friend complain about their finances (friends I KNOW make more than I do), I want to take a look at their bank accounts and implement some fixes and a budget (I find this kind of thing fun and fulfilling). But I’m not sure how to offer help without being rude!

        1. Lynne (The Wiser Miser)*

          Bianca – it really started because I talked about my own experiences first. So if someone is complaining that their cell phone bill was too high, I shared what I did to save (prepaid! so much savings). Do that for enough things and you people will start asking you for help, and before you know it you’ll be a money coach. Ha!

  25. AF*

    Lynne – thank you so much for sharing your awesome insights! It’s really wonderful to know that there are people like you who are helping women dealing with their issues and moving into self-sufficiency and living their dreams!

  26. Mel*

    I’m curious for those that have an emergency fund where exactly do you keep those funds? Is it in a regular checking or savings account or somewhere else that generates a better return?

      1. Mel*

        I have a hard time with using savings accounts. They’re too accessible and generate so little return I just keep the minimum to avoid fees.

        1. Natalie*

          I found that having a savings account at a different bank than my checking account helped a lot with that. The money is reasonably accessible in an emergency, but the fact that I have to log in to a different website and then wait 2-3 days for the transfer means I’m not just randomly moving money back and forth between my savings & checking accounts.

          1. Anne*

            Agreed. We have a smaller savings account at our main bank, and the bulk of our savings at a credit union my mom works at. It has a much better rate (0.3% compared to 0.02%! Woohoo!) and is accessible if necessary, but requires more work than just logging in and transferring.

            1. Mona Lisa*

              I’m not affiliated with them in any way, but we have moved most of our savings to Barclays recently because they offer very high yield savings accounts. The basic one is 1%, and then there’s a “dream” account, which can net you 1.05%. After just a couple of months, we’ve already earned more in interest than we earned in an entire year at our old bank.

    2. BRR*

      It should be in something that’s safe and easily accessible. I just do a savings account. Stocks would be a no.

      1. Lynne (The Wiser Miser)*

        There are many views on this – personally I like keeping at least a few months expenses pretty liquid – in checking and savings accounts. Beyond that investments might make sense depending on your situation, but I like the security of having it accessible. Depends a lot on your comfort level and how much you’re talking about.

    3. Mona Lisa*

      Ah, I was typing out the same question and didn’t refresh before posting! Great minds and all that jazz.

  27. Mona Lisa*

    Thank you for this Q&A! I’ve been on a personal finance/early retirement blog kick, and this is fitting in so nicely with that trend.

    Lynne, if you don’t mind a question, where do you recommend storing an emergency fund? We have six months’ worth in a high yield savings account with Barclays, but it feels a little silly to have so much money sitting in an account that only accrues 1.05% interest. I was intrigued by an idea Mr. Money Mustache floated of putting the emergency savings in index funds (like with Vanguard), covering immediate expenses with a credit card, and then selling some of the funds to pay off the credit card bill. Is there an incentive to keep the cash immediately available vs. in something that would take a couple of days to pull out (other than the obvious possibility of the initial investment being devalued by a turn in the market)?

    1. Lynne (The Wiser Miser)*

      This really comes down to personal preference and level of comfort. I personally keep a few months worth of expenses totally liquid at all times, but there’s a lot to say for putting savings into index funds. I think if your credit is good and unlikely to change for the worse, MMM (big fan of his!) has a good point, particularly if your income is generally stable. If you’re self employed, have a lot of medical issues, don’t have a lot in savings yet…I’d probably keep it liquid. The idea of an emergency fund is obviously that you don’t need it, but your definition of “emergency” might include things that come up pretty regularly if you’re not budgeting for them. What if your refrigerator breaks? Or your roof starts leaking? Or you ran over a big pot hole and need a new tire, wheel, and TPMS sensor? Are those emergencies? I don’t know about you but things like that happen with some regularity for me – as in, every one of those happened for me in the last 8 months. For those sorts of things, I want money available right away, and not to have to think about how the market is doing. For larger amounts and longer term, investments can be a really important tool to building wealth, but I wouldn’t consider those savings as much as investments, the same way I don’t think of my home equity as money I have in savings, even though I can access it if I need to.

  28. Tea*

    Oooh, this is wonderful, and feels very validating to me, as someone who religiously marks down every expense on a spreadsheet.

    Two questions, if Lynne is still around to respond:

    1. In working with your clients, how do you get over the ingrained culture of Not Talking About Money? What do you think of the “We Don’t Talk About Money” attitude in America? It’s always been a little baffling to me, as someone who grew up in the US but in a multicultural household– I never learned that it was “rude” to ask about wages or money or how much one spent until I was well into adulthood, which probably offended more than a couple people along the way.

    2. I, personally, like to keep about a year’s savings on hand at a time (so I can sleep at night, not cause I expect anyone else to do the same), but do you have any recommendations on what to do with your savings afterward? I’d like to save for retirement, for example, but everything about going into investments and the stock market is completely baffling to me.

    1. Tea*

      Apparently everything is baffling to me, as evidenced by how many times I use the word to describe things….

    2. Mona Lisa*

      I’ve been reading a lot of personal finance blogs lately, and everything I’ve read seems to be in agreement that Vanguard index funds are the way to go for investing. They typically perform in-line with the market and are fairly easy to set up. We’re planning to pay off my husband’s student loans in full soon, and the money we were setting aside for those is going to hopefully be going towards a new Vanguard account after that.

      1. Tea*

        I’ve heard that from a couple of sources now, so it’s good to know that more than a few people are in agreement about this. Do you know if there’s a minimum you need to put in?

        1. Mona Lisa*

          It depends on the fund type. I think some of the better ones require an initial investment of $10k, but there are others that are much lower ($2-3k). These apparently can be switched to the $10k version when one hits that benchmark.

          1. Tea*

            Do you know if you handle them all yourself, or if you’d need to involve a financial advisor in some capacity on these? (I swear when I’m off work I’ll exercise some of my google-fu! I’ve heard heard a lot of YES, you can handle all your investments yourself, vs. NO, this is a sure path to disaster without a professional helping out! rhetoric.)

            1. Natalie*

              IMO you don’t need to pay a professional, no, especially not for retirement savings. Actively managed funds don’t outperform passively managed funds in the long term. Save your money.

              1. Mona Lisa*

                This. John Oliver did an excellent segment on this recently. I won’t post the link so as not to get caught in moderation, but if you google “John Oliver Retirement Plans,” it should be the first thing that comes up.

            2. fposte*

              Set it and forget it. The reason why women tend to outperform men in investing is that we are less likely to fiddle. Put it in a target date fund (making sure it’s a low-cost fund from Vanguard or elsewhere) and only pay attention to it to add more. Don’t siphon off the modest gains to somebody to make it more complicated and possibly more tax-unfriendly–as well as quite likely less effective.

          2. fposte*

            It’s $1000 for Vanguard Target Date Funds; they automatically switch to Admiral class when you get to $10k, but those aren’t better funds–they’re just a teensy bit cheaper in an already very inexpensive category of funds. Non-balanced funds are $3000 for entry.

            However, if you have Vanguard (or Fidelity, which is another good company as long as you stick to the low-cost funds) among your retirement offerings from your employer, your minimums will likely be much lower than that.

            2. Tea*

              If I were to have the money on hand, do you think it would be better/easier/cheaper to go right in with the 10k? That said, all of this information is super helpful and I’m going to look into Vanguard tonight and see if I can get something going there!

              1. fposte*

                Don’t get hung up on the difference between the fund classes–it probably matters a lot less than the difference between what you’re being charged now and what Vanguard would charge you for anything.

                And I realized I was wrong–they don’t offer an Admiral class for target date funds anyway, and those would be the easiest thing to do if you’re not sure of what you’re doing and we’re talking for your IRA.

        2. fposte*

          It’s $1000 for mutual funds, no fee if you get statements electronically. However, there’s no minimum for Vanguard ETFs (though you have to buy at least a share), and they’ve got ETF versions of their mutual funds that you can treat exactly like mutual funds if you want.

    3. Natalie*

      Do you currently have any retirement savings? If not I would personally make that a priority. Even if you are super young. In fact, *especially* if you are super young, since a fairly small investment now will be worth a ton more later.

      Your 2 common retirement accounts are IRAs and 401(k)s (or different letters if you’re in a particular industry). A 401(k) is a type of pension account (a defined contribution account rather than the traditional defined benefit account) so you start one through your job. An IRA is an individual account that anyone can start at any time. Exactly how you invest the money that is in each account can vary – stocks, bonds, index funds, CDs, etc, etc. You don’t need to know a lot about the stock market, and in fact there’s little evidence that actively managed stocks have better long term rates. And index fund or target date fund will be just fine. Vanguard & Fidelity are 2 companies that offer these kinds of accounts with really low fees. (Watch out for those fees, they can get high for basically no work.) And if your employer offers a 401K match, start taking advantage of that as soon as you can. Otherwise you’re giving up free money.

      The thing to do is just start your retirement savings. You can change your investment strategy and even your bank in the future if you decide you need to.

      1. Tea*

        I currently have a Roth IRA, “managed” (sort of) by a parent’s stock broker. The money is all mine, however, but I feel like…. I don’t really understand anything about it, or what’s going on there. This is really useful though– I absolutely need the kind of basic grounding different types of investment accounts that you’re describing right here, so thank you!

        1. Natalie*

          If you end up opening your own account with Vanguard or Fidelity or whatever, you can transfer that Roth IRA with no tax consequences. The “direct transfer” option is the easiest; once you get your own investment account set up they should have instructions on their site. (If your parents’ broker pushes back, just say something about “consolidating accounts” and hold firm. This is a business relationship, don’t feel bad.)

          Once you are controlling your own IRA, be aware that you can only contribute a certain amount per year ($5,500 at the moment). The rollover doesn’t count. So again, if you have a 401(k) available through your job, consider opening one of those as well. 401(k)s also have limits but they are much, much higher so it’s fairly unlikely they will affect you.

      1. Tea*

        Thank you for the links! What I didn’t ask for, but really appreciate (and in retrospect, this might have been a good place to ask) are guides with basic information about this kind of stuff, since I feel so uneducated about it all.

        1. fposte*

          The easiest place to start is with William Bernstein’s small (12-16 page) free minibook called “If You Can.” I’ll attach a link in followup, but Google should get you to it as well.

        2. The Cosmic Avenger*

          Sorry, Tea, I was in a rush yesterday, and I thought fposte covered a lot of what you were asking, too. I hope you do watch both of those videos, though, as they cover incredibly important issues with investing, but they can wait until you’ve done a bit more reading, if you feel you need more of a primer first.

          Here’s one of my preferred sources for that: http://www.investopedia.com/university/beginner/

    5. Lynne (The Wiser Miser)*

      Hey Tea!

      In response to your first question – you get over the culture of Not Talking About Money by…talking about money. I talk about my own finances a lot (hi internet!) but generally still steer clear of naming things like my actual income, because that tends to make people feel a little squeamish. But I find that the best place to start is just being open about things. A good way to do that is that if something is about money, name it. For example: coworkers ask you to go out to lunch but you want to eat your brown-bagged lunch because: budget? Just say “hey, I’d love to eat with you all. Do you think we can do that here instead? I’m on a budget.” That can be a great way to start a conversation. In my experience, everyone thinks they should be on a budget but few act that way in reality, so they’re likely to ask you about it. Generally I just do not shy away from talking about my own struggles and questions about money, so it invites other people to do the same.

      As for your 2nd question, it looks like everyone has great answers for you!

  29. Your Weird Uncle*

    This was a really helpful and enjoyable read, thank you!

    I have to say that I appreciate the approach especially with women and their personal relationship with money. I wonder if you’ve noticed whether the relationship women have with their money changes with regard to their own personal relationships? Using myself as an example, I really only decided to take charge of my money/career when I met my soon-to-be-husband, and it surprised me how much of that was an almost-instant, conscious decision. It was very much ‘well, now I’ve figured out the love part of my life, now I can focus the time and attention on my career and savings’. I think that very often we’re told as young women that our love life is the most important part of ourselves, and everything else has to wait until we’re happily paired off (or perhaps I’m projecting my own experiences here).

    I regret waiting so long to take charge of my finances! But now I am a happy YNAB user, and was able to pay off a huge unexpected bill thanks to my budget. That sort of thing would have financially ruined me a year ago.

    Thanks again!

    1. Lynne (The Wiser Miser)*

      You know I hadn’t thought of it in exactly that way, but you’re totally right. I think that culturally there’s a “well first things first!” mentality that for women means “marriage first!” and can really lead to folks putting off other important tasks, like taking a hard look at their money or careers. I think it comes back to self-care for me. Now that I’m a happily married homebody with a baby and a business, I definitely have less time than I used to but also am more motivated (and supported!) to practice good self-care. For me, budgeting is a crucial part of my self-care regimen, probably moreso than almost anything else, but then I’m a budget nerd.

  30. Cafe au Lait*

    Lynne,

    How do you handle clients who like to assign cutesy names to their budgeting, and it makes everything harder. My husband and I are trying to budget (we’re off the bandwagon, but jumping back on this weekend). I’m a pretty straightforward budgeter–I have budget lines titled “savings,” “mortgage,” “cash,” etc.

    My husband, on the other hand, likes to create categories with names. We’ve used “vault” for savings because he felt that the budget line “savings” was too confusing with the savings account. He also enjoys having $60 in “emergency cash,” which isn’t recorded in the budget, where I say he likes to have a baseline of $60 in his wallet. (and it is recorded).

    He didn’t grow up with parents who shared their budgeting practices with him, so he’s still a newbie at this. I’m not as patient as I could be because I’ve always budgeted. Maybe not strictly, but I’ve always tracked my spending somehow.

    1. Lynne (The Wiser Miser)*

      Well first, I’d agree that it sounds like your husband is making things too complicated with this way of approaching things. That said, it’s pretty common to get confused when you’re first getting started and it’s all very overwhelming, and for a lot of folks, it brings up all sorts of feelings – fear, shame, and blame being the big ones but also emotions about how they feel like they “should” know this stuff, especially for men!

      I think that this issue, like so many in marriage, is really about communication and compromise. Maybe you can throw him a bone by letting things have names that don’t resonate with you as strongly until he gets his bearings more? He’s probably feeling anxious about it and so this is a way of exerting some control over what can feel pretty restricting, especially if he looks at you and thinks “you make it look so easy, why is it so hard for me?”

      A lot of folks start out complicated and a few months in do an overhaul and simplify, if that’s any consolation to you. The important thing is to get started, and then just keep checking in about it. As he gets more comfortable with it, my money’s on him being open to a more straightforward, simple view of it.

    2. Yetanotherjennifer*

      I would think that if a cute name takes the stress out of budgeting then go for it. But there should be sound principles behind it. I have a category called “might happen” for things like copays, small repairs, fees, etc that I’m too lazy to allocate seperately and carry over money for each month. (YNAB) I’ve figured out how much we spend on those things over a year and I make sure that category has enough. Then if we need to spend it I record the expense in the proper category and deduct the money from Might Happen and replenish the category in the next month.

      Your husband’s $60 is called Mad Money at our house. Aka an allowance. The allowance amount is set based on the average cost of that the money is meant for. So as a SAHM I used to set mine to include one lunch with friends, 3 trips to Starbucks, admission for me and the kiddo to an event and a little extra fudge. I don’t need to track how I spend it. When it’s gone it’s gone and leftover money is mine to fritter as I choose. But the replenishing definitely gets accounted for. My husband uses his for haircuts and lunches and other stuff. I’ll also add that it took several months to find the sweet spot amount for my husband’s allowance amount. We kept raising it each month until he could stay on budget and then we worked on lowering it.

      1. Lynne (The Wiser Miser)*

        This is a good point too – I like to build in individual discretionary funds each month to cover things like what Yetanotherjennifer says here. A lot of folks have different amounts for each person – in my house we get the same amount, even though we earn very different amounts and do different things. Whatever works for you really, but having that will allow you a bit of a steam valve especially when getting used to the budgeting process.

  31. Aurora Leigh*

    This is so timely!

    I (finally) have found a full time job, so I want to be even more conscious about budgeting. I grew up in a very frugal household and have always been very thrifty as a result.

    But living on my own and being underemployed I pretty much went with a don’t-buy-anything-i-dont-really-absolutely-100%-NEED-and-be-pleasantly-surprised-if-i-could-put-$100-or-so-in-savings-at-the-end-of-the-month kind of plan.

    Honestly, I’m just as excited about how much more I’ll be able to save with this new job as I am about being able to spend a little (Need to do a little shopping for my new work wardrobe for starters).

    1. Lynne (The Wiser Miser)*

      That’s a *great* time to start budgeting. However you do it, I recommend zero based budgeting. YNAB and EveryDollar are examples of apps/software that help you with that, but you can do it however you’d like. Basically what you want to do is get all the money you actually have together – whether physically or virtually – and divvy it up into categories (or envelopes, if you’re doing cash). Every dollar should be set aside for something, even if it’s “stuff I forgot”. Then if you go over in a certain category, you need to move it from another place. This will help you realize your money is finite, which is a huge mindset change that will help so much.

  32. LBK*

    Love Alison’s description of savings as one of the nicest things you can do for yourself and I completely agree that people should treat that as something as joyful as any other luxury expense. I was a compulsive money hoarder for a while back when I used to get big quarterly bonuses that were easy to sequester away because I wasn’t factoring them into my week-to-week budgeting. At one point I ran into a housing snafu that required fronting/potentially paying a couple thousand dollars in order to avoid being homeless/living on my sister’s couch, and it was really gratifying at the age of 23 to be able to tell my mom no, I don’t need to borrow money from you, I have enough to cover myself on this.

      1. LBK*

        It helped that my expense to income ratio was really good at the time – I’m actually worse about it nowadays because I lifestyle creeped like crazy as my income went up (bought a car, moved to a place with double the rent, started traveling 4-5 times a year, etc.). Still in a good spot and I put money away when I can but not nearly as aggressively as I did back then.

  33. Cool Beans*

    This is so interesting! Thank you for posting and thank you for your insight, Lynne!

    My question is how do I best get over the fear of spending money? I find spending any kind of money stressful. Even though I have enough of a nest egg, any kind of spending makes me worry about diminishing it and that I’m spending money that I should be saving instead (which isn’t true, I’m just mentally trying to save all I can).

    1. Stellaaaaa*

      I would start thinking about it in terms of how it might affect the people around you. My sister is OBSESSED with saving every last penny (we don’t come from a background that would engender fears of extreme poverty or anything, so there aren’t any deeper issues at play) and it’s kind of a bummer sometimes. She doesn’t want to go out to dinner for Mom’s birthday because she doesn’t want to spend money (even though she has it) and she refuses to go unless someone else pays for her. She’ll skimp on car repairs and things snowball until she no longer has a working car and one of us has to drive her around because she won’t pay for cabs. She’ll be out at a bar with friends and awkwardly not drinking until someone buys her a few rounds (she’s not abstaining from alcohol; she’s literally waiting for other people to cover her). Sometimes she’ll skip events that cost money, and then she’ll be upset when her friends start to form relationships around her. She doesn’t understand that it’s happening because 1) she’s annoying and 2) she missed out on some crucial bonding experiences because she was reluctant to buy a $10 concert ticket or whatever. Sometimes she’ll try to direct social outings around free stuff and no one’s into it.

      You’re probably not this extreme and annoying about it, but keep in mind that, figuratively speaking, paying for your own $4 beers goes a long way toward making sure you don’t start to develop this kind of identity. You can save money and still get the brunch special once a month, and I wholeheartedly believe that it’s worth buying a $15 meal in the interest of building friendships.

      2. TootsNYC*

        I think this is an example of her not realizing what her goals are, and not recognizing the role money can play in achieving those goals.

      3. Cafe au Lait*

        Yes. In college, I didn’t want to spend my whole paycheck at the bar. (A few of my friends did this multiple times :-/). At the start of the semester, I allocated an amount toward “bar.” It wasn’t much, $30 or $40. I decided to only go on ladies night, which was free. Then I drank from the well, which were $2 drinks. I decided that I could have 2 drinks a night, along with the tip to the bartender.

        I was still able to go out with friends and socialize, but stayed within a reasonable amount when I did. It also helps that I don’t like beer, and often skipped the $0.10 per drink nights. (Basically 10 oz cups of beer that cost $0.10 each.)

    2. fposte*

      That’s me! Two things help me. One is to define “enough” when it comes to saving, so I can use my budget for permission as well as restriction (it helps a lot when you’ve got an external limit like a maximum contribution, too). Another is think about what I’m saving for and when that will happen, and consider whether I’m delaying the life I want to live for an inappropriately long time–IOW, I can see scrimping for a year to save up for a down payment, but scrimping for three decades in hope that I’ll live like a queen in retirement is punishing current me too hard for a later satisfaction I may not be able to enjoy.

      I think of savings as a negotiation between current me and future me. And both mes count, but one shouldn’t live completely at the expense of the other.

    3. Tea*

      Fposte put it really well– it’s very important to save for the future, but at the same time, you never know what the future holds, so it’s important to spend for the present too. Taking care of and tending to your needs now (by going to see the dentist, buying that tool that will make your work so much easier, spending a little extra on a trip that brings you a lot of joy) is also taking care of future-you, who is growing on the foundation you’re building now. Think of it as fertilizing the field and watering the plants while you’re hoarding what you grow for winter.

    4. Lynne (The Wiser Miser)*

      What fposte said.

      Really though, if you make and keep a budget, and teach yourself to look there instead of at your bank account to make financial decisions, you can also look at it to give you permission to spend on what you’ve planned for. Not only do you “have to” put aside $150 this month for next winter’s heating bill, but you also “get to” go on a vacation without worrying about the bill when you get home.

    5. TootsNYC*

      I think you focus on the GOAL. The idea of spending money is to achieve a goal.
      A roof over your head; clothes that make you look professional; etc.

      If you don’t want the goal badly enough, maybe it’s OK to not spend the money.
      Once you can build a budget that makes you feel like you know what your goals are, and you know how the money will help you achieve them, you might find the terror goes away!

  34. Stellaaaaa*

    My one big caveat when it comes to saving is student loans: I’m of the belief that it’s best to pay those off as quickly as possible, even if it means you’re not saving as much as if you just made minimum payments. That debt is in a wholly different category than any other kind, in my opinion.

    I like that this was somewhat addressed with the advice to keep a one-month cushion, not a three-month one.

    1. Natalie*

      I think as with all debt, it really, really depends on the terms of the loan, the interest rate, and opportunity cost. If you have privately held student loans with a high rate, sure – throw all your extra cash at it. But there’s nothing magic about federal loans that requires evaluating them differently from your other debt.

      1. Not Karen*

        The “magic” is that unlike other debt, in most cases student loans cannot be discharged in bankruptcy.

        1. Natalie*

          You have various payment and forgiveness options with federal loans even if they aren’t dischargeable. Whereas if you have no savings because you’ve sunk all of your money in accelerated debt payments on a FedLoan, you’re not going to have a ton of options in an emergency. No one takes “low credit utilization” as a form of payment.

          1. Natalie*

            ETA, I’m also not sure I’d give large weight to the category “dischargeable in bankruptcy or not”. If you have a ton of credit card debt and a small student loan, it’s foolish to prioritize paying off the student loan because of the small risk you might file for bankruptcy in the future.

    2. Lynne (The Wiser Miser)*

      I think this depends a lot on your situation, the interest rates, the situation of your other debt, etc. If they’re private loans, yes, pay those off like your face was on fire. They are the worst sort of loans. They have all the downsides of student loans, like not being able to be discharged in bankruptcy, with none of the upsides, like income based repayment plans. After that, I’d focus on other types of consumer debt like credit cards, along with emergency saving, before working more on your other loans. Debt snowballs get thrown around a lot, and generally they’re a great idea, but they ignore all the factors that need to be part of the situation: your savings, your short and long term goals, what sorts of debt, etc. I’d agree with Natalie though that paying off student loans in lieu of general savings and other debt reduction isn’t going to help you if you get a big medical bill or something – pointing to how diligently you’re paying off a huge debt isn’t going to cut it (especially if it’s very large, so paying it off could take decades).

    3. TootsNYC*

      “the advice to keep a one-month cushion, not a three-month one.”

      I read that as “start with keeping a one-month cushion,” and working up eventually. Because the idea of trying to build up a three-month one is too daunting.

      1. Lynne (The Wiser Miser)*

        Yes – for some people that transition may take years, but you definitely want more than a one-month cushion in the long run. The advice out there to do things like not pay down any debt until you have a 3 month cushion, however, feels very out of touch to most people so I have folks start with one month because it makes such a huge difference.

  35. SRB*

    “Look at your budget instead of your bank account to see if you afford something”

    Woah, I think I just had a breakthrough, hah! I’m pretty good about saving typically, but I hadn’t ever thought about it that way. My typical way through life is “Yeah, but do I *need* it to survive?”, if no then don’t buy it, but splurges definitely happen when I’m looking at the bank account instead of the budget to see if I can afford it. Now if I could only get my other half to see it the same way.

    1. Mona Lisa*

      I’ve also found it helpful to treat annual or semi-annual payments (like car insurance or Christmas gifts) as monthly ones. Yes, it’s easy to look at the bank account and see that we have a good cushion underneath ourselves, but if we spend that money now, we might have to forgo a lot more in a couple of months to pay the insurance premium. My husband tends to be more of spender so it took him a little while to get on board with this type of thinking. However, budgeting is a great way to make sure that you have both money to cover the expenses that are coming down the line AND money to do the things you love to do.

      1. Your Weird Uncle*

        YNAB (as so many other commenters have already mentioned) is soooo fantastic for this. It completely revolutionized the way I think about money. It costs a little bit of money – currently $50 a year I think – but I believe you can still try it out for free for 30 days. It might be worth giving it a try for the trial period just to wrap your head around how to think about budgeting in their terms, and then you can DIY it. (I do subscribe to it, myself, but it’s definitely something you can do yourself if you’re diligent enough.)

        1. Mona Lisa*

          Oh, definitely. We’ve been devout YNAB users for about a year. Another bonus is that they offer it free to students, and since my husband is working on his doctorate, we’re able to avoid the subscription fee for now!

      2. LBK*

        Yes! Chopping up big payments into small ones is so helpful, especially if you can actually make the smaller payments ahead of time so the money is out of your account. For instance, I make car payments biweekly every time I get paid instead of how I actually get billed, which is monthly. Same thing with my rent, I take half of it out of each paycheck and put it in a separate rent account so I’m not dealing with the ebb and flow of having to keep my checking account balance up in anticipation of bigger bills.

        1. TootsNYC*

          I’ve been known to simply pay them all ahead.

          Right after college, I lived in a women’s residence hall, and we were charged weekly. I knew people who were really upset about that, because they got paid every-other, and they didn’t have money for rent the 2nd time. I said, “Why don’t you just pay ahead?”

          That was the first time, I think, that I got into the idea of setting up my expenditures so I was ahead of the game.

    2. AnonyMeow*

      That was what caught my eye, too. I have a decent amount saved up, but I know we are still far off track in order to retire comfortably. When I’m faced with a spending decision, it’s hard not to think about the $ number in our bank account and say “well, I can afford it” even when in the back of my mind, I know what we have isn’t enough. After reading this post, I’m really curious to try budgeting!

      1. Lynne (The Wiser Miser)*

        I am biased, but I think budgets are just about the very best thing. Not only did they change my relationship with money, but having a shared budget has totally changed the way my spouse and I communicate – about hard things like money, and kids, and problems, but also generally it’s made us talk a lot about our values, priorities, and goals.

    3. Lynne (The Wiser Miser)*

      Once I was able to see things this way, it was like bank account magic. I “suddenly” had enough money to pay my bills, never got an overdraft fee anymore, and just never got anxious logging in to check on the bank account. No “surprise” checks I wrote 3 months ago coming back to haunt me, no “oh no I forgot about the car registration!” situations. Game changer!

  36. Just A Girl*

    This is a fascinating career!

    Lynne, if you’re still around, did you get any kind of professional certification before hanging your shingle?

    1. Lynne (The Wiser Miser)*

      Hey! I sure didn’t. I looked into a number of certification programs but there really isn’t anything that trains you to do what I do. Certified Financial Planners (CFPs) are very investment focused, though they often take care of your whole wealth portfolio, but definitely don’t do coaching. I have an MBA and at one point was planning to go into accounting and do tax/CPA work but found it wasn’t my bag. I’m a coach at heart, so I just pair that with my know-how from having done a bunch of research (and making a lot of mistakes) and working with folks over the years.

  37. The_artist_formerly_known_as_Anon-2*

    From a personal standpoint – I tell millennials and gen Y people in my field =

    = 401K
    = IRA

    If you have surplus income – put all you can away in those.
    If you don’t – treat a portion of your income – dedicate it to those.

    “But, oh my, I can’t afford it!” – depends. If you have crushing college debt – or you’ve run up your credit cards to the hilt, obviously, take care of that first.

    But if you get a substantial raise – before you go out and buy that new Lexus, or take that trip to Aruba, take care of your IRA *and* 401K. If you are in a position to pay your everyday bills – you cannot afford NOT to max out in these plans.

    THAT IS YOUR RETIREMENT MONEY. Most U.S. companies don’t pay pensions anymore, and while an old geezer like me can depend on Social Security for something – those of you in your 20s and 30s cannot rely on that.

    In other words, if it comes down to Aruba vs. the 401K, go with the 401K. Aruba will be there in the future.

    1. Mel*

      I still talk to a handful of people I used to work with who are now retired . When I asked them for career advice they all told me they appreciate that they have little debt and have enough income to do fun things like traveling to places they’ve always wanted to go, but every single one of them tells me they wish they would have saved more so they could do more.

    2. LBK*

      Agreed on raises going into your 401(k) as long as you can afford all your bills. I spent 3 years working in a department whose whole purpose was educating people who were trying to withdraw money from their 401(k)s. It was really depressing how small some of those accounts were for people who were very close to or at retirement age. Way, way too many people plan to rely on Social Security, which is barely enough to survive now, never mind down the road when it’s questionable if it will even still exist.

    4. Lissa*

      I’m in Canada so I think the terms are slightly different here, but yeah…retirement stuff stresses me out a lot! I’m a single lady in my early 30s who feels like it’s too late to start saving for retirement — I spent my 20s working a job that kept me paycheque to paycheque and my job now is something I love that isn’t exactly super lucrative…I’ve only just started saving. I get into a panic where I feel like I need to put everything I make ever into savings, then end up going a bit nuts and splurging….sigh. I hear about people with these 5 figure savings accounts and I’m just like ….how? I don’t have any debt, so that’s something I guess.

      1. Cafe au Lait*

        Hey Lissa,

        I’m in the same boat. I think I saved $2,000 in my twenties for retirement. Absolutely not enough. Here’s what I’m doing now.

        * Meeting my company’s max contribution. If I put in 5%, they’ll put in 10% for a total of 15%.
        * Every raise (we get 2% raises every year), I put an additional 1% towards retirement, and keep the other 1%. I’ve done this two years running, and it’s an extra $90/month, or $1080 a year.

        You have no debt, which is REALLY AWESOME. In many ways, you’re already ahead of the curve.

      2. LBK*

        Put the money in a retirement account instead of a savings account. At least in the US, there are serious legal restrictions and tax implications for taking money out of a 401(k) (employer-related retirement plan) or IRA (individual retirement account) so that may help you keep your hands off it if you’re prone to withdrawing from your savings whenever you feel like splurging. Also has the added benefit of being invested in the stock market, so you’ll get much better returns than a savings account.

  38. Raia*

    Lynne, I feel like I could become a financial coach but so much of my financial know-how comes from YNAB. How do you separate your appreciation of YNAB from your work, and do you even need to? And how do you prove to your clients that you know what you’re doing, do they usually ask for metrics of how much you have helped people save before they agree to be your client?

    1. Lynne (The Wiser Miser)*

      Hey Raia! I think what it comes down to for me is that I learned so much from YNAB but not just the software, if that makes sense. It helped me to change my perspective on things in a way that really accelerated the interest I already had in personal and business finances. I use YNAB with almost everyone, but it’s a piece of the puzzle – a tool that I find extremely useful, but it can’t do everything. I have never had anyone ask for metrics; I find the issue isn’t so much “you should help me save $X in order to justify your fee” so much as it’s about awareness, strategy with money, and a sense of trust and peace about it. That all is really difficult to quantify, and also goes so much beyond saving and tools.

  39. LeRainDrop*

    Great interview! I’m a HUGE fan of saving for the purpose of FREEDOM! For me, it’s really paying off right now, after my department had several downhill changes in recent times, and I found myself without a job. I realize I’m very fortunate to be in this situation where I’m not worrying and can take the time to find a next job that is a strong match for me, rather than rushing into whatever.

      2. TootsNYC*

        I love this idea of Past You and Current You.

        I sometimes think of Future Toots, like when I don’t put something away, and then I remind myself, Future Toots will just have to do it eventually, and it will be at an inconvenient time.

  40. TootsNYC*

    These are the gems I printed out to take home and discuss w/ my husband. Thanks to both of you!

    my emotional responses to money (i.e. terror and avoidance)

    Often, they don’t pay attention [to their spending] because they’re afraid of what they’ll learn.

    budgeting is an act of self-care.

    the budget is there to reflect my own goals and decisions back to me, and I can change it if I want.

    The focus is always on the eventual spending of the savings,

    I feel like having savings is one of the nicest things anyone can do for themselves — the peace of mind that it brings you to know that you have a safety net if you need it is worth so much more than any purchase I can think of.

  41. Doraemon*

    Thank you so much for this, Lynne and Alison! I’ve learned so much just reading through these comments.

    Do you have advice for getting a reluctant spouse on board with a budget? I’ve tried doing it just on my end, but you can only go so far with that. My husband and I have similar attitudes toward money, in that we’re not big spenders and tend to prioritize saving for the future, but he just doesn’t want to think about a budget at all as long as we are comfortably afloat.

    We’re in a weird situation where our savings are not bad, but our earnings are low. He got sick last year, went on medical leave, and then changed to a lower-paying, non-management job. His monthly salary is roughly half of what it used to be. My salary is stable, but I’m not in a well-paid industry (higher education). There are months that we are in the red, just with a simple in-out calculation for that specific month. In a good month, we are saving up to only $1000 (equivalent — we’re not in the US), not counting automatic deductions that go into retirement/education accounts. I think we need to be tighter on a month-to-month basis and cut down on spontaneous spending so that we can feel comfortable spending money on important things. He prickles when I bring up money because I think he feels guilty. We have possibly too much in liquid assets earning nearly no interest — enough to be fine for a few years. Our retirement/education savings are there, but I suspect not as strong as they could be. Only debt is a house loan. I’m hesitant to move money from our saving accounts to investment plans since I don’t feel that stable month to month. I think a true budget would help figure things out.

    It’s interesting how uncomfortable I felt just writing out the above. It’s hard to talk about money! I know we’re fortunate that we saved money in our twenties. I know we could be worse off. I just can’t feel fully secure about the future and, actually, it’s preventing me from making a decision about trying to have another child.

    1. Lynne (The Wiser Miser)*

      Doraemon – I’m actually really surprised this topic didn’t come up more, it’s a perennial favorite when you get people started talking about money.

      A couple of practical points: It sounds very much like you’ve got too much money in liquid assets! I’d definitely talk to someone more versed in the ins and outs of investments to see what makes sense to do that. As other posters have mentioned, a Vanguard target date fund is usually a solid, low fee, good return investment that will allow you to “set it and forget it” which is great when investing, especially for the long term. I totally understand the desire to keep it available in case you need it if things don’t feel stable, but if you have a few months worth of expenses liquid you can pretty comfortably invest the rest and let it earn something for you.

      I think a budget is going to go a long way for you here, and in your case I’d recommend using a budgeting app or software that is a little more intensive – no Mint, no excel spreadsheets. The reason being is that the best way to get a reluctant spouse on board is to spend some time on it, together. Personally I love YNAB, but EveryDollar is very similar and a lot of folks have good luck with that. GoodBudget has been mentioned too, but I don’t have any experience with it. The act of having to talk pretty regularly about what you want your money to do for you, as a family, is going to do a few things. It’s going to bring up a bunch of feelings and you’ll probably fight some. But then you’re going to get some things aired that needed to be aired, and you’re going to get down to business. Your money is finite, yes, but you’ve got an excellent cushion should you need it. I suspect you’re going to be like a lot of people I work with where you find you actually have more freedom in your budget than you expected and it’s going to feel freeing. It’s also going to give you such satisfaction to see, together, how much you’re moving into savings each month.

      I’d recommend keeping one month of expenses in your checking account and budgeting it all at once (YNAB and EveryDollar are set up for this, or you can google “envelope budgeting” or “zero based budgeting” if you want to do another route). Then when, inevitably, life happens and you go over in one area, get together again and talk about how you want to handle it – where should that money come from? Or when something comes up that you want to buy, but it’s not a need and it’s not in the budget, ask each other “What do we want this more than?” The key here is to keep the lines of communication open and always focusing on your priorities as a family and as individuals. There are no right or wrong answers, but I think you’ll find that the process of doing this together is going to help you get on the same page.

      1. Kyrielle*

        With GoodBudget, if you and your husband have smart phones, you can each have an app and share data. I got my husband on board just by saying I wanted to see where we were spending and what we could do, and I would handle all the rebalancing, budgeting, etc. – he had only two things to do, input every expense he incurred so I wasn’t blind to what he was spending, and tell me if he thought I was putting too little in a category so it didn’t become a constant thing that I thought was fine.

        GoodBudget is also envelope budgeting based, so probably a lot of similarities.

        1. Doraemon*

          Thank you! I signed up for GoodBudget yesterday actually, based on your comments above. I like the idea, but I’d prefer something that would let me keep track of my money in yen.

      2. Doraemon*

        Thank you so much for your reply! Do you know of any software that handles two currencies and bank accounts in different countries? If I’m going to do it, I’d love to get everything all together. I live in Japan so most of our money is based here, but I have a US bank account that I use occasionally and I contribute to a Roth IRA every month from that account. Also some US mutual funds.

        Can YNAB handle complicated finances like that?

        Thanks again, I really appreciate it.

        1. Lynne (The Wiser Miser)*

          This is super super tricky. I’ve done it in YNAB but it took a bunch of weird workarounds that frankly didn’t work great. If you’re using YNAB I’d probably pick a single currency and use a converter tool when you move money between currencies, or run separate budgets for each one.

          A quick googling tells me that there are a few softwares that handle multiple currencies natively – I haven’t used either of these so I can’t say whether they work well, but check out MoneyDance and BudgetInMind.

          1. Doraemon*

            Thank you! I think two different budgets in YNAB sounds like a good idea at this point.
            We’re actually moving next week, so I’ll probably wait a month or so to track our expenses in new circumstances and then dive into this.
            Thanks again!

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