[Rant] [sorta] How did I manage to make ends meet all this time?

It’s all about priorities. You always need to fund monthly and yearly expenses that you know will come due, because of course, we’re all liable to pay those. In order to hit all of those goals, if you have to sacrifice saving for other things that are less set in stone (vacations, new computer, etc.) then that’s unfortunately the reality of the situation. Non-monthly/yearly expenses will just have to be put off, or saved for much slower until your income is higher or your expenses aren’t higher than your income anymore.

Dining out, movies, concerts, etc. are all things to cut first, taking that money you would have spent on all of that and putting it away to build up an emergency fund, regardless of how fast or slow that may be. Once you have that built up, you can then asses wether or not you can start adding the other categories back in without having to start pulling from that emergency fund again to pay for things and start inching your way back down to square 1 again. If you can’t get out of that cycle regardless of where you reduce spending, you either need to increase income or reduce your cost of living. It’s usually down to those 2 options, or just saving up slowly for all of your goals and just reaching those goals later than you plan for.

I had a lot of goals setup when I first started using YNAB and ended up realizing that everything i’m planning for would require funding my categories with more money than I would earn in the month. It took a few months of adjusting, deciding I may have enough in a certain category at the moment for expenses that don’t have a set in stone date I would spend for, and putting off certain goals until others are funded as needed.

Basically, fund essentials with %100 certainty of the dates they need to be paid, and put leftover in an emergency fund. If you can’t do this, you need more income or less expenses. Once the emergency fund is comfortably built up, put the money that was going into it towards other goals as needed and you should see yourself heading in the right direction.

Congrats on taking the first step!!!

Usually I start by making sure my 4 walls are covered (rent, food, electricity, water) and go from there. For long term annual expenses, I won't fund them immediately, knowing that I have to cut to fill those. I make those a goal with a date, so later YNAB will calculate what I need for each month.

Then start cutting. Subscriptions, memberships, eating out costs, etc.

Good luck! We are on your side!

I recently got set up in YNAB and found myself asking a similar question. We weren't missing payments or paying late fees. In fact, we handled some nice debt pay down over the years but when I set up my budget there was barely any money left at the end of the month. I have concluded that those little windfalls that we didn't think about probably sustained us through slight overspending. Things like tax returns and money gifted at Christmas and birthdays helped float a slight overspending problem.

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Now the trick is to figure out how to cut back significantly so we can build a larger buffer and kill off more debt (car and house).

I was also shocked when I set up YNAB. I’ve never worried about budgeting and I rarely even checked my account balance. Now I see that after my necessities, I only have $67 a month leftover. Needless to say, I have been spending way more than that! I didn’t know how I went all this time without ever hurting. Then I realized that my savings account has greatly diminished. I’m a little ashamed by the financial situation that I’m in.

The short answer to "how you do that" is question everything. YNAB has a free workshop on "Cutting Spending" that you may find useful, but the gist of it is, go through every line in your budget and try to remove any assumptions that you have about it. Ask yourself honestly, "can I get this down?"

Rent or mortgage may seem like a pretty fixed cost, but even in housing there MAY be things you can trim if you are willing to sacrifice some in the short term. You could find a roommate or even move if the savings would justify it.

Internet costs are often way more negotiable than the companies that provide them would like us to believe. You can adjust the temperature you keep your house at and either use fans or sweaters depending upon the season. Phone plans are one where the savings can be huge. Insurance is often much cheaper if you save up and buy it 6-12 months at a time, plus you can also shop it around or call your agent and see if you're getting every discount you're entitled to. Subscription and/or streaming services can easily accumulate over time until they eat up way too much of your disposable income. Trim them ruthlessly, and if you find you miss one, you'll almost certainly get an offer to resubscribe soon, maybe even with a free month or two. (This is from personal experience, I cut Netflix, Amazon Prime, and Kindle Unlimited...and within 6 months got offers for a free 30-90 days for all of them.)

When you're staring at your budget and wondering where the extra 200 a month is going to come from, saving 15 dollars may not seem like it's going to get you there...but saving 15 dollars on 15 line items will...and on some line items you can probably cut by MUCH more than 15 dollars.