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Comment by mattw2121 | Hacker News Reader

I'm a happy user of You Need a Budget. If the golden rule is "Spend less than you earn", the practical way to achieve that is "You Need a Budget".

I use YNAB because it works for me, but I've used paper and spreadsheets in the past. The key is having the budget so you can understand where your money is going. You aren't always going to stick to the budget, but by paying attention and classifying all expenses, you can better understand things going forward and then plan better.

I don't care if you make $35K a year or $350K a year, you need a budget.

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>If the golden rule is "Spend less than you earn",

If that is the golden rule, then the platinum or diamond rule is to earn at least $x. There exists a lower limit under which certain parts of life are simply not affordable, such as saving for retirement, healthcare, education, children’s education, etc.

>I don't care if you make $35K a year or $350K a year, you need a budget.

At $35k, I imagine everything coming in is going out. You really just need to focus everything on increasing income. For people in the USA at least.

Actually, because of cliffs in the qualifications for government benefits, the rule might be earn less than $x or more than $y, but not in between.

"here exists a lower limit under which certain parts of life are simply not affordable"

You do realize that like half the world lives in under a dollar a day right? It is expensive to live in the west, and technically you are right, but people even manage to have an apartment, etc, etc, etc, in NY city and live on $100 a month.

People spend money mostly to signal to others their wealth, and secondly to save the brain power it would take to find free alternatives. 35k is just so far below your income it is the furthest you can image or have acquaintances at that level. But if you make that, you would have some other arbitrary number where it was not affordable to live under.

Increasing income is what you might be able to do in the future. Spending less than you earn is what you can do right now to keep the hole from getting deeper. The author is correct. It applies at all income levels. When I read the title of the article, I instantly knew what the golden rule was, because it's obvious.

If you make $35k, it is still possible. It might not be comfortable, and that seems to be the great success of capitalism in the 21st century: convincing people that they shouldn't ever be uncomfortable, or that they can't be without certain items or experiences that they most certainly can be.

Increasing income is great. Literally (almost) everybody wants this. There is high demand for increasing income. The supply is part of the issue, and the cost of increasing income is the next barrier. Bettering your situation takes effort, either to decrease your spending, or to increase your income. Doing both at the same time takes double the effort.

The last thing somebody making $35k (or $25k) needs is some provincial yuppie zoomer saying to them "Just make more money lul". It doesn't help anything.

>It doesn't help anything.

My advice is for those at 25 years old working in a fast food place who can read and write English. Their time excessively pruning their budget is better spent learning new skills and attempting to sell their services in a market that pays more.

>If you make $35k, it is still possible. It might not be comfortable, and that seems to be the great success of capitalism in the 21st century: convincing people that they shouldn't ever be uncomfortable, or that they can't be without certain items or experiences that they most certainly can be.

I do not know what this means. It is possible to live in the forest and forage and be comfortable, everyone was a few tens of thousands of years ago. But surely things like a safe neighborhood, healthcare for you and family, and opportunity for education are basic things that people can be expected to strive for, and that are not really achievable under a certain income in pretty much all populated regions of the US at $35k per year.

> Their time excessively pruning their budget is better spent learning new skills

Doing anything excessively isn't good. Nobody is saying budget "excessively". If budgeting is taking up all your time, may be you're budgeting excessively.

You cannot out earn a spending habit. It will grow way faster than paycheck because it is nto held in check by reality.

At most you cannot make more than the GDP of the Earth, while your spending habit can be arbitrarily high.

Not to mention having a budget allows you to plan out _how_ to increase your income.

If you needed time off to study for a career change, you cannot do it without first having a budget, saved up and such.

So regardless of the desire to increase income, the first step is to have solid data about your expenditures; aka, a budget.

The wildest success of capitalism for me has been the continual smartphone treadmill. It almost seems like the less someone makes the more they feel compelled to spend money on smartphones, I guess it's likely symbolic of status these days. I live pretty comfortably, and I don't feel like I could afford a $1500 smartphone, and yet almost everyone I meet no matter their income seems to have a better phone than me.

I think it's an obtainable status symbol. They may never have a fancy car or a nice house or even a top of the line TV, but they can have a nice phone, and for some people I'm sure that's important to have SOMETHING to have status about. It's also the primary form of entertainment and socializing for some people so I can understand wanting to have a nice screen.

They've also perfected the "it's only $x a month!" sales technique - combine this with anyone who dares to try to use an older Android phone just absolutely being shit on (you need to be pretty technically savvy to pick one that can stay up to date) and most people will lean into "get the new one".

Thankfully I think most Samsungs are offering 5 years of updates now, so that's getting better (I assume most people are buying Samsungs as they really have become the face of high-end Android).

Do you own a computer or tablet?

It may be that those with lower incomes spends more on a smartphone because it is their only way to access the internet.

Fair point of discussion, I do indeed own a computer and I loath doing anything on my phone that I could have done on my computer.

This is fair - since a personal phone is arguably required in today's society and most people will have one regardless of income. It does not satisfy me that you need the latest and greatest phone however.

I bought a Chromebook for $200 probably 5 years ago that my wife still uses for all of the things that she doesn't want to use the phone for. There are still decent computers that are available for far lower prices than top-of-the-line phones.

It all goes back to personal finance vs. capitalism. Big Business wants you to believe that only the best smartphone will do, no matter your budget (what budget, haha?).

If you don't make that much money and you want to escape eternal debt-hell, you have to overcome this mindset and find good budget options. And I maintain that it can be done. Move out of the city. Establish trusting relationships through your own hard work and good faith efforts. Swallow your pride and lean respectfully and gratefully on friends and/or family if you have to. And then be there when someone needs you for the same. Big Business also wants you to believe that it's every man for himself, but that doesn't have to be true either.

I was thinking of smartphones in particular with that comment and I agree with you completely.

> I don't care if you make $35K a year or $350K a year, you need a budget.

That's a catchy thing to say but if someone is making $350K a year and easily saving / investing six figures annually without a budget, telling themn they need a budget sounds a bit absurd. I'd say the further you are from being able to invest / save sufficiently for your long term goals, the more a budget will help you. Admittedly, not nearly as catchy.

If you have income automatically set aside for investments and savings, you already have a lightweight budget in the form of "I set aside X% or $Y every month and the rest is discretionary."

That’s the best way to live, I don’t like micro-managing myself.

I’ve dieted down to different weight classes for sports and tracking everything is pretty miserable. It works when there’s a single date up ahead. I can’t imagine micromanaging finances like that indefinitely. I’m with you: expenditures are about some number, savings for a house downpayment is about some other number, and that’s enough for me.

This is more than most people have in my experience, if this is all the budgeting prowess you can muster then you are potentially ahead of the pack already.

That works for you because nothing or anything would work for you. I am in the same boat, a budget would serve no purpose for me other than encouraging me to spend more.

For the people who need a budget, they would just run out of money completely before their next paycheck and either get kicked out of their apartment, or dip into their savings.

this is literally the financial equivalent of "if it fits your macros"

I think it can be useful even if you're able to save / invest "easily".

I'm in that situation. I'm fairly thrifty and don't spend much. But after looking back over my spending, I've realized there was enough useless crap that I could cut out. For example, I realized I was spending an enormous (to me) amount on lunches at work, though it was nothing fancy. It's just that I was working in a rather touristy / "rich" part of town, so aside from a pastry, everything was above €10. I started packing my own lunch most of the time and the cost went waay down for no discernible loss.

Bonus points for eating less and losing some weight, but that's a different story.

You need a budget at any income level. Saving more early means early retirement because compound interests stack well over years and years.

Or can save some hardness as you reach 55plus, when getting employed becomes harder but state welfare is still 10 years down the line.

An habit to budgeting helps because people aren't always top dogs.

You just demonstrated that a high earner has a budget to invest a certain part of their money. I don't disagree that as your earnings go up that the budget can become higher level.

Budgets are not needed if you pay yourself first (i.e., save towards your goals as soon as you are paid) and only spend the money you have left over. Then you can't go into debt and you are meeting all your goals.

Yeah, the reverse budget. I'm a fan of this. It might not be quite as efficient, but there's almost no mental overhead.

I think this misunderstands the point of a budget. A budget is not primarily designed to develop a growing savings account, tho that is a very good side effect.

A budget is designed so that when the rent becomes due on the 29th, or you are hungry and you want want to consume food on the day before your paycheck comes in, you don't discover you have $2.50 to your name.

You could put money aside for food every day, and for rent, and utility, as well, and that would be called a budget. IN fact just paying yourself first, is just a really simplistic underdeveloped budget.

Plans aren't needed if nothing ever goes wrong. What happens on the day you can't pay yourself first? That's what the budget should answer for you.

That sounds like a budget.

You literally just described a budget.

For years I used YNAB and encouraged family to use it too

Then I got into FAANG and switched to buying whatever I want and fully pay off credit cards every month

UNTIL my wants got bigger and bigger - last minute vacations, concerts, a lot of “experience” stuff coming out of covid lockdowns

And now, RSUs are down , I spend more than I bring in each month, started drawing down on cash savings - YOLO - still driving a Camry though

I need a budget again

I can also recommend moneydashboard.com. I load in multiple banks and credit cards, it will update all my banking transactions via api into a central view. I can set a budget for each type of expense and it all just seems to work.

As a former user who switched to Amex credit cards for all spending, it’s key benefit of automation is ruined.

I don’t think it’s entirely YNAB’s fault. But having to manually input each credit card transaction doesn’t make me feel it’s worth the monthly charge. Then it just becomes a spreadsheet.

EDIT: that is— the lessons are excellent and the mindset is important. But it’s monthly cost is another issue.

(I'm not here to promote YNAB, I promise I'm just a happy user and not affiliated).

I use my AMEX for 90% of all spending. No issues importing transactions to YNAB. Sometimes there is a 1-2 delay, but they do import.

Lucky! I love YNAB, but I'm glad that 95% of my spending is on my non-Amex cards and accounts, because the Amex accounts only sync successfully once in a blue moon, even after repeated reauthorizations. Any tips?

They have multiple import providers. I am set up to use Plaid. If you are using another it could be the cause of your issues.

Why does using Amex stop you using YNAB? Syncs fine for me.

Luck I guess. I originally stopped using it when I got an Amex card because of sync issues. Tried it again recently and it was still the same.

Maybe I was spoiled with near instant syncing on my debit card, I used to categorize the gas i just paid for before leaving the lot.

But again, at 15 a month, that’s a lot of effort for a gui on top of a spreadsheet.

The benefit for me was quick transaction logging and categorizing, then a weekly/monthly check up. But with sync issues, those check ups became categorizing sessions, and just took too much time.

I feel like if I needed a budget, that'd be a sign that I'm probably being too careless with my money to begin with.

I feel like if I need to do any design work, then I must be too careless of a coder to begin with.

That's just... a poorly constructed, bad faith comparison. It's very easy to casually save money without budgeting, especially if you have a high income, which you specifically called out as fair game. For me, checking my bank app every non and then and confirming I've got a good looking net savings per month is fine.

You seem to be trying to imply that I must believe that any form or preparation is a sign that you can't execute. Which is dumb.

As income levels go up, budgeting can be much more casual as you've described. You are still talking about budgeting. You are inferring that I believe all budgeting is an act of OCD.

> You are inferring that I believe all budgeting is an act of OCD.

I've said nothing of the sort. That's pretty rude to people who actually suffer from OCD.

I don't personally believe checking my net cash flow every few months counts as budgeting but if you do, sure, that's a semantic disagreement.

I've had this discussion countless times and maybe we've got the same problem in just not thinking in budgets.

Then again I've often thought that I simply don't need a budget for X if my spending on X (as analyzed over a year, or five) is so much below of what I would put as a budget if you'd asked me to guess one.

Example: If I like buying music, I'd maybe give myself a budget of 30€ for music per month, that's 2 albums. Looking at how many albums I actually buy in a typical year, or in an excessive year - I've never even come close to buying 24 albums in a year. So that thought process might have happened once, 10 years ago and until I start to earn a lot less or albums get a lot more expensive, I'll just buy as many albums as I want, and usually end up with 5-10 per year.

I would like to do better financially, but don't care for budgets. Often, I find that I'm unable to make a purchase, due to those pesky buggers.

For example, I'm about to take a trip to Europe, which would never have been possible if I had "budgeted".

I've taken many trips and budgeted for all of them. I plan in advance or if I feel like doing something spontaneous, I reallocate money from another budget item or from my discretionary bucket.

> I'm about to take a trip to Europe, which would never have been possible if I had "budgeted".

Curious why ? Sounds like the same thing

Hey, I might have missed the mark, but it was intended to be tongue and cheek. I don't "like" budgets because they force me to live within my means.

Ignore them, and you can do whatever you like! You do have a point though, I could probably bring the cost down and still manage it... this is what budgets are for.

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