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This is the fifth day in our 31-Day Money Challenge. Over 31 days we’ll publish 31 podcasts, each designed to help you move closer to financial freedom. Yesterday we covered 7 tips for effective and stress-free budgeting. In today’s podcast, we Jesse Mecham, founder of You Need a Budget (YNAB).

Sponsors: The 31-Day Money Podcast is sponsored by Betterment and Personal CapitalBetterment and Personal Capital are two tools I use to make investing easier, less expensive, and more effective.

Table of Contents:

Topics Covered

The 4 Rules of Budgeting

In this episode, Jesse walks us through his 4 rules of budgeting. He also discusses some myths some believe and common mistakes many make with their budgets.

  1. 4 cardinal rules of budgetingEvery Dollar has a Job: Every dollar that comes into your life should have a job. That’s really what a budget is all about. To that, I would add that you should put every dollar to work as soon as you can. We discussed that “pay yourself first” concept in yesterday’s podcast.
  2. Save for a Rainy Day: An emergency fund is a critical component of any financial plan. While the size of a rainy day fund may vary based on your specific circumstances, we all need resources available when the unexpected happens.
  3. Roll with the Punches: One of the key mistakes Jesse sees people making is a lack of flexibility. Not everything goes according to plan. You may have a well thought out budget, but something may come along that changes your priorities. That’s ok. Roll with the punches.
  4. Stop Living Paycheck-to-Paycheck: This really is the key step toward financial freedom. And it’s a great feeling to know that you can survive for even one month without a paycheck. YNAB is designed to help you accomplish this goal.

Resources Mentioned

Day 6: The One-N-Date Formula for Cutting Expenses

Author Bio

Total Articles: 1080
Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Article comments

Olivia Fox says:

I’ve been loosely following these podcasts and was chewing on your first speaker’s comment about $75,000 being a threshold for “financial independence”. As the average US household income is about $50,000, how can the rest of us even manage to retire at 70, let alone experience some measure of flexibility?

rachel says:

how do you save when all you have to a check is bills. every penny I have has to go to bills, food, clothing not one bit is left for even a fun desire like going bowling.

Joel says:

You need to lower your expenses. Cheaper car, no eating out, cooking all your meals, get roommates, get an extra job. It’s hard at first but the savings add up and you’ll realize that we spend more on things than we realize.