How many more personal finance books will I read? I don't know. But this one, I did have to read. I am an avid fan of the budgeting software YNAB (You Need a Budget) and this book by their founder highlights the 4 principle of how he recommends you should organize your money.
- "Give every dollar a job". Explicitly put your money in categories. Food, gadgets, travel, what have you. These categories reflect your personal values. It's not about money, really. It's about what's important to you, now and for the future.
- "Embrace your true expenses". Larger, less frequent expenses like yearly insurance fees are often overlooked. Make them part of your "jobs" from rule no 1 so that no expense will ever surprise you. Instead, slowly save up to when that bill hits.
- "Roll with the punches". A good budget is designed to be changed, not to force you into a fixed set of rules. If your priorities change, be honest to yourself, and re-assign the jobs from rule no 1.
- "Age your money". When you're living paycheck to paycheck, money leaves your account soon after having arrived. This is a stress factor and not sustainable. Aim to extend that "age" of your money, at least for 30 days, preferably longer.
I liked the content and also the tone of the book. Jesse is a friendly and humorous advisor, but also a good storyteller who shares the experience of managing a household with 6 kids and his family's approach to having healthy finances.
Personally, I have been working with the YNAB software for a year and they do have a lot of educational content online, so actually I didn't learn a lot that was new. Still, having everything told in this format felt nice and worth my time.
Unclear to me still: How exactly would one implement this budgeting principle without YNAB or similar software? At the very least, probably you'd have an elaborate spreadsheet. I don't know.