YNAB’s 4 Rules – Part 4: Age Your Money

Part 4: Age Your Money

Welcome back to our series on YNAB’s Four Rules. In Part 1, we discussed the importance of giving every dollar a job, in Part 2 we discussed embracing your true expenses, and in Part 3 we discussed how to roll with the punches. Now, let’s dive into Rule 4: Age Your Money. As a YNAB Certified Coach, I find it helpful that YNAB tracks the amount of time your deposits are in your account before you spend them – this helps you see if you are making progress on stopping the paycheck-to-paycheck cycle.

Living Paycheck to Paycheck

Did you know that 78% of U.S. workers live paycheck to paycheck? That’s a lot of financial stress. Aging your money helps you break this cycle, gain more financial security, and have more peace of mind.

How to Age Your Money

To start aging your money, follow these steps:

1. Fund all Your Categories: At this point, you should have some experience using YNAB under your belt and are changing your spending habits based on the data you’re collecting to help you live within your means. 
2. Start Building Your Future Income: Start by saving a little bit each month until you have enough to cover one month’s worth of expenses. Create a category for these funds called “Future Income” that acts as a financial cushion, giving you breathing room between earning money and spending money.
3. Use Last Month’s Income for This Month’s Expenses: Once you have funded your “Future Income” category, you can start using the money you earned last month to pay for this month’s expenses. This transition can take time, but it’s worth it.
4. Stay Consistent: Continue this process until you’re consistently using money that’s at least 30 days old and a month ahead of your expenses. Consistency is key to maintaining this buffer and achieving financial peace.

The Benefits of Aging Your Money

By aging your money, you’ll reduce financial stress and gain more control over your finances:

• Financial Security: You’re no longer living paycheck to paycheck, which reduces stress and increases financial stability.
• Better Decision Making: With a financial buffer, you have the luxury of making thoughtful, deliberate spending decisions.
• Emergency Preparedness: You’re better equipped to handle unexpected expenses without disrupting your financial plan.

Ready to break the paycheck-to-paycheck cycle? Let’s work together to age your money! Book a session with me, and I’ll guide you through the process, helping you achieve financial peace and security.

It All Starts When You Set Up a Complimentary Conversation with Me.

Now that you know the four rules of YNAB, it’s time to take action and transform your financial life. Here’s a quick recap:

Taking Action: A Summary of YNAB’s Four Rules

• Give Every Dollar a Job: Proactively decide how to spend your money by assigning every dollar to a specific purpose.
• Embrace Your True Expenses: Plan for irregular expenses by setting aside money for them every month.
• Roll with the Punches: Stay flexible and adjust your budget as needed when life throws you curveballs.
• Age Your Money: Get ahead of your spending and use last month’s income to pay for this month’s expenses.

These simple yet powerful rules can help you take control of your money, reduce stress, and achieve financial peace. Remember, it’s not about restricting your spending—it’s about being intentional and proactive with your money.

So, are you ready to give every dollar a job and take control of your financial future? With YNAB’s four rules, you’ll be well on your way to a more secure and stress-free financial life. Happy budgeting!