YNAB (read: why-naaaab) is the saviour of my financial life. After raving about it to quite a number of people, I’ve decided that the best thing I can do is to blog about it so that more people will be using it.

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I first came across YNAB a while ago when it was made as an excel spreadsheet. Jesse Mecham, started the work early in 2003, out of necessity when he had to get more income for the newborn baby in his family. The rules he came up with were practical and flexible enough for his family to ensure that they had some financial security despite a single low student income in the household, and several children to look after.

At the time, lured by shinier other options, I chose other alternatives like Quickbook, Microsoft Money, Buxfer, Billmonk, Mint, Xpenser, Toshl, Xero, etc (yes, my obsession to get my financial life in order had been running for years). I even started a project with pyko, chii and minch to create one ourselves, called omex (incOMe EXpense, heheh). But with 99.9% projects that I had started, we didn’t end up finishing it.

I did my usual review of software alternatives last June because I was not happy with Xero’s primitive budgeting ability, and there I found it. YNAB 3.0, in its true great shiny form, far from the messy excel spreadsheet I saw previously.

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I have never looked back since, and can’t stop recommending it to enough people.

Why? What’s so special?

YNAB has four solid ground rules that are easy to follow:

• Rule One: Give Every Dollar a Job. When you earn money, you plan how you’ll use it, then you follow your plan.
• Rule Two: Save for a Rainy Day. Take those large, less-frequent expenses that usually send you into a financial tailspin, and break them into monthly chunks. Result? Financial peace.
• Rule Three: Roll With the Punches. In budgeting, be flexible and address overspending before moving on to the next month. This helps you stay in the fight.
• Rule Four: Live on Last Month’s Income. We want you to spend this month expenses on what you earned last month.

Rule One definitely puts some breaks on my shopping spree. Rule Two makes saving to pay for my mortgage a much more concious thought, Rule Three makes me feel committed because I can’t just erase last month’s budget overspending by creating a new budget this month. YNAB makes it obvious that I have a lot less money to budget for this month if I have overspent last month. I don’t have any problem in relation to abiding by Rule Four, but nonetheless, I get quite happy when my income increases slightly for some one-off reasons.

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Budgeting without Lies

YNAB provides super flexible budgeting tool which allows you to apply these four rules into everyday life. It works by creating a separate budgeting layer, isolated from your daily transactions. To illustrate this point, let me give you an example. I have always had huge expenses around November every year, because of my car. My car is 12 years old, so it needs pink slip every time I renew the registration. I usually get it serviced at the same time since I’m already at the mechanic. Given the age of the car, there’s bound to be quite a lot of cost involved – the last time I had to change the brakes and the door locks, hmmm expensive. Registration costs came up to about $300 and the servicing another $500-ish. This means every November, I usually get stressed. I try not to shop much, and every time I do, I regret it.

However, the stress may not actually be necessary if I’ve already saved enough buffer in prior months to pay for the car. But how do I know that I’m not just making those excuses so that I can shop more? This is how I do it in YNAB. Every month, I can budget for those big expenses I dread.

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YNAB will tell me to assign every dollar for the previous month’s income into a budget category at the beginning of the current month (remember Rule Four). As transactions get recorded (I can upload transaction files generated by my banks), it will accumulate the expense amount under the “Outflows” column and match them with the categories I have set. Where I see the “Balance” column is red, it means that those are the expenses that I was not expecting. I can also drill down further to an individual transaction quite easily (as shown in the picture above).

This feature on itself has allowed me to see my monthly expenses with context i.e. in relation to the previous month’s expenses, and what I have budgeted for at the beginning of the current month. As long as I’ve budgeted for the expense, I don’t need to be worried. Quarterly bills such as council fees or water bills can also be budgeted this way. Let’s say your water bill is payable in March for $150, then every month, you can put $50 into the category and YNAB will keep a rolling balance. By March, you would have $150 under the “Balance” column, so when you see an Outflow of $150 for water bill, the balance will not be red.

Expenses that are out of budget just because of “Dumb Mistakes” like overweight airport baggage fees still happen (urgh), and I still get stressed about it, as I should be. That’s the only way for me to change my spending behaviour, but nothing else. If I have a spending splurge in November, I will see it in YNAB despite the car expenses I have to incur. In the past, I can mask the splurges as any overspending in that month is expected.

Awesome Spending Trend Report

YNAB allows wonderfully flexible categorisation. I split mine into Everyday Expenses, Monthly Bills, Quarterly Bills, Annual Bills, and several Saving Goals. When I see my Spending Trend report, I can see whether the total expenditure is huge because of the electricity bill or because of some parking fines I got (those dumb mistakes!).

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The report above is showing good signs as February has the lowest expenditure so far, despite the fact that it has a lot of “Quarterly Bills” due (highlighted in green in the chart). That means double achievements for me yay 🙂

Like the budgeting tool, you can easily drill down to the subcategory and the actual transaction. When I drill down to my Quarterly Bills category (as shown below), I can see that most of them are electricity bill and strata fees, and I can see that along with my November car expenses, these two bills were also due last November. No wonder the total expense for November was so huge!

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The program comes with numerous reports such as Spending by Category and Net Worth, as well as loads of features. You can link all of your computer and mobile devices through dropbox cloud-sync, so that you can also account for some of those snarky cash transactions that add up. The mobile app is neat and easy to use.

Behind all of that, YNAB has managed to build a community behind them, whose members strive to lead less stressful financial lives. Heck you even get a crash course when you first join. If you often read personal financial blogs like The Simple Dollar or Get Rich Slowly, there is no reason why you can’t incorporate some of the lessons and goals to YNAB as well.

Do You Lie?

I have found it is very easy for me to lie to myself on how much I am earning, and how little I am spending, or making excuses as to why I don’t have much money in my wallet even though I did a big cash withdrawal just yesterday. Once or twice is okay, but minch and I found that every month, we have a “special” expense that always happens.

Does that happen to you? Did you remember when you last told those lies? Was it end of last month? Or was it as recent as yesterday? If you can’t say how much exactly you’ve spent, then you wouldn’t know how much you’ve actually saved. Without savings, the differentiating factor between you and the poor hobo on the street, is a job. What happens when you can’t rely on your job unexpectedly?

YNAB is not free, but you’re worth it (less stress, less wrinkles).

PS. I get discount as YNAB customer if I refer a friend. Let me know if you are thinking of getting the program after the one month trial, I can get you $6 discount as well.

Thanks to minch for proofreading this post.

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Once upon a time a.k.a last Saturday, Min’an and I went to the annual International Speech Contest held by the District 70 Toastmasters Club. Toastmasters, or let’s call it toasties, for everyone who has never heard of it, is a public speaking club which I’ve been going to for the past three years or so – no, it’s not a drinking party! District 70 represents half of Australia, so any winner from this level of competition will go to the States to compete in the world’s International Speech Contest.

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The competition is held in Bankstown Sports Club every year, about 30 minutes drive from where we live. When we first entered the Grand Ballroom that Saturday, we weren’t so sure we’ve arrived at the right place, because it felt like stepping into a seniors club. I saw an old guy in a wheelchair, an old lady in crutches, white hairs everywhere, just no one like us. As we walked further towards our table, only then it started to resemble some toatsties gathering. Lots of people wearing the DTM medallion (the highest achievement you can get in toasties) around their neck, some girls wearing cocktail dresses and gentlemen in nice suits, including my hubsy too, such a rare delight to be enjoyed throughout the night heheh. Our table was near the front of the stage, unfortunately just a little off to the side, but still enough to enjoy the show without suffering a neck ache in the morning after.

Soon after, the show started. The first speech I thought, was a slab of overly theatrical show from Tony Frizzo. It was a speech on the unforgiving tragedies happening on his life – first his son had an accident, then his daughter had skin cancer, only to find out that he had also contracted it. The speeches afterwards covered different topics, from football fever to likening a love journey to a rollercoaster ride.

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I had two favourite speeches from the night. I like one given by Matt Tonkiss on 95% confidence. He raised the question of having 100% confidence – why do we nod in favour of famous people trusting their 100% confidence motto, while we cringe in disbelief when a dud wannabe singer who shows up in Australia’s Got Talent mentions about being 100% confident, without any talent that is. Matt thinks it’s better to reduce the 100% level, to… maybe around 95%, and leave 5% for self doubt. I liked this speech a lot, I can take something home after listening to it. The 5% self doubt is useful to generate a list of action items to tick, and to ensure all that confidence does not go to waste.

Another one was by Bernie Albano, on the art of giving way. He told his story from his childhood in the Philippines, all those times when he was driving along a one way street, only to find a tuk tuk, a local public transportation, driving against his direction. The traffic then, as you would expect, would come to a standstill, with both sides arguing, and yelling, from inside each other’s vehicles. The story then shifted to his dealings with his daughter, who wanted to quit school to pursue her dancing passion. He forced her to continue school, to the point where he would banned her from going to any dance lesson. She cried and cried, and asked him why he wasn’t able to give way.

This awful situation continued for a prolonged period of time, until he relaxed his ban on the daughter, and she progressively offered to do home schooling. The speech then shifted back to the one way street in Philippines, maybe those yells from the tuk tuk is just a request to give way, that’s all they asked for. So he did, he moved to one side just a tiny bit more, to find that the small alleyway is big enough for both directions to continue. The deadlock ends, no more honking, people in both directions are able to pass, smoothly. What a powerful metaphor between the one way street and his personal experience, transcends into a simple but insightful advice.

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Unfortunately none of my favourite speakers took the highest honour of the night. The guy who won was Colin Emerson, and his speech was about being a superman. I won’t talk about it in this post, so if you’re interested to see it, go check out d70 toasties website yourself. Not to say his speech wasn’t wonderful, but it was just the content is not as gripping as the two I’ve told you above.

In fact, the speech content from one to another followed a pattern, they were mostly about dreams, dreams and dreams. Believe in yourself, believe in your dreams, it is not too late, and it will never be too late, motivational raising speeches that were sometimes too much for me. It was nice to hear one, but probably not seven consecutively, as with what happened. Apparently, however, this was the kind of topic that the US judges love, and that was probably why the pattern was so obvious. In the division level contest that I went to last year, the speeches had more variety in terms of topics.

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In one of the breaks in between the main course and dessert, I went over to have a look at the Wollongong trophy (pictured above). It had the winner’s name every year from the 1960s, decorating the surroundings of the big medal centred. For year 2008, the plaque says “Mark D’Silva, Westpac City” – this is not news for me, I knew this, but standing there, seeing his familiar name awed me. Mark D’Silva is one of the veterans in my club. He’s been going to TM for more than 15 years, he even wrote a book about public speaking. More importantly, he is real, he knows me and he has even evaluated my speech, and he didn’t think they were that bad! Maybe next year I can be bothered to enter the club contest, all in the name of self improvement.

Being the land of migrants, Oz invites various cultures to congregate, and unavoidably, to clash. We all know how to cook snags on the barbie, to snatch a beer when 5 o’clock comes by or to celebrate new year’s eve. Our “modern Australian” cuisine is a reflection of the melting pot Oz has become: asparagus from northern Europe, leek from Egypt, eggplant from India, zucchini from Italy, bamboo shoots from China, but yet they are familiar to our tongue in more layers than one. I am sure there are plenty of aha moment when different cultures meet up and produce the best bits of every world, and that’s how we got here.

But what happen when they don’t? Like when I stir fry sambal belacan with broccoli – taste bad and frankly… wrong… (kids don’t try that at home, even if someone does it in Masterchef). I’m talking about specific practices that clash and make us uncomfortable, like what happen when you have a burqa-clad woman sitting next to you on the train; or the one thing that have, time and time again, made me uneasy: saying goodbyes. I think this custom deserves one entire post on it, and that will be this post.

Why so hard?

Ninety-five percent of the time, I have no problem with saying goodbyes. I have adapted my goodbyes to suit the other party. This is because, back from where I came from, saying goodbye was as simple as waving your hand accompanied with “dadaaaag” – Indonesian don’t even bother saying “let’s meet again in the future” like how the Japanese do it with their “mata ne!”. The word “dadaaaag” doesn’t mean a thing; it’s just a random noise we like to use to extend the waving session as the two groups take separate directions. No bodily touch in the procession, usually a quick and fail-proof exit.

The majority of Asian cultures dictate hugging and kissing to only be shared within the family circle, and to maybe the exception of close friends. Naturally then, handshakes became the next step after hand waving, especially if a guy needs to say bye to a girl, or vice-versa. A business colleague relationship has always followed this rule regardless how often the group spends time outside office hours. Note that when I grew up in Indo, I hardly feel the need to hug my girl-friends despite how relaxed I felt towards them and I never had to hug/kiss my guy friends, unless they got upgraded to a different status (kaching!). But that had to change when I entered the lengthy and complicated world of western goodbyes.

I remembered my constant discomfort on kissing people’s cheek in the first few months I came to Oz. To start off, it made the goodbyes a lot more staged and requiring more thoughts than I ever had to allocate for. My point is, waving and handshakes allow delayed reaction from the opposite party to be smoothly integrated into the bye-bye proceeding. To respond to a spontaneous wave or handshake, he or she can decide to wave/shake back as slow as half a minute later, and that’s fine because it does not impose your bodily existence towards the other person at all. This is very different to have someone’s body or mouth lunging towards you within a split second, demanding a mirrored response immediately – whether or not we have agreed on what the goodbye ‘protocol’ is.

Nevertheless, I found cheek to cheek hugs between girlfriends to be the easiest to master, and this includes the variety of lips-to-cheek, cheek-to-cheek, as well as the multiple cheek kisses of the European versions. Overtime, cheek kissing male became pretty straightforward, under one condition: I know that I’m expected to cheek kiss at the end of the conversation. That gave me enough time to have a short think about how to do it – yes I am slow at this, coupled with the fact that height difference does increase the level of difficulties.

I devised an adaptation algorithm that, as I’ve mentioned, worked 95% of the time. I wait for some signals first (if they don’t initiate, I would default back happily to waves and handshakes), but I then prepare myself to do the following:

1. If Asian male: do a wave/handshake – I do not want to make them uncomfortable;
2. If Asian female: do a wave if I’m not too close to her (for the same reason as #1), otherwise, treat as if she is under rule #3;
3. If Westerner (gender doesn’t matter): do a cheek-kiss variety.

Brilliant!

Now, what do I do if I need to say goodbye with a banana male? By definition they would look like they fit into rule #1, but I should have prepared under rule #3. Yah, this caught me by surprise ! Recently I had had this awkward moment repeated to me thanks to a banana. He tried cheek-to-cheek hug, and I did the unwanted kiss pose. My almost-healed-hug-wound reopened, and the painful memories of past failed huggies rushed in.

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It is time to revise the algo.

I had to take a step back to appreciate the size of the new Samsung 63 inch 3D TV when I went to WTL’s house. It was ginormous, massively oversized TV which gave me viewing pleasure for the next two minutes after the initial impact. Two minutes, that’s all it took for my eyes to adjust to the huge letters and poster-sized ads. The side effect was that watching the “smaller” 42 inch TWO-D TV at home became a suffering.

Look at it, the width of the TV was more than my body length! Ridiculous!

And yet it was also as thin as two mobile phones stacked together :O Technology these days…

The TV also came with several 3D glasses. Interestingly enough, these glasses have power on/off button, and they seemed to present clearer 3D picture than the cheap glasses the cinema gave out to watch Avatar. When turned off, the glasses appeared to have no effect – but when turned on, the glasses became slightly more tinted, and then the 3D-ness came to live. Amazing! Although 15 minutes of watching Monster vs Aliens 3D was enough to make me sleepy – I was unsure of whether it was the time, or it was the fatigue from wearing the glasses that wore me out, or that this was the third time I watched the movie.

Sadly, with the luxurious TV spoiling my eyes (in a positive way), I was expecting a good night sleep at WTL’s house despite the 42 degrees weather in the arvo. Ooh I was so disappointed. This was the first time I had to sleep without AC in the past two weeks (yah I’m spoiled boo hoo), and it sucked. So bad. WTL had a noisy fan in the bedroom – making a crackling sound whenever it oscillated from side to side. At one stage I was so scared it was going to blow up and send blades flying to hit me. Thanks to my paranoia, I saw the grim reaper next to the bed, I wiped my eyes to have a re-look and he was gone. The noise was getting unbearable, there’s no way I could sleep anymore.

I woke up at 1 am hoping that I could carry on waking up until I went home to my lovely full AC-ed bedroom. But with still 5 hours of sleeping time to go, I bunkered down on the kitchen floor, with just a blanket which I use as a mattress and several pillows. Why kitchen? It’s the only part of the house with AC.