Ask Jesse: What's the Most Important Metric?

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4.7 • 1.1K Ratings

🗓️ 7 November 2022

⏱️ 5 minutes

🔗️ Recording | iTunes | RSS

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Summary

YNAB'er Allison asks: of all the metrics in the YNAB software, which is the most important one to track? To which Jesse answers... none of them! Jesse prefers to track net worth over time, which is not captured in YNAB since it's a calculation of the value of what you own minus what you owe. As Jesse explains, though, if you are working the Four Rules well, then you will create more opportunties to save and invest money and pay off debt, all of which will increase your net worth.

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Transcript

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0:00.0	But why never is my name is Jesse Meekam with another episode of the YNAB podcast where
0:08.6	we teach you four rules to help you stop the paycheck to paycheck, get out of debt
0:11.8	and save more money, had a question from Allison.
0:15.8	She said, what do you consider to be the most important reporting metric when looking
0:20.8	at your overall plan, overall budget?
0:23.2	There's so much info in reporting, but I feel like there must be a key metric to moderate.
0:28.1	Thanks.
0:29.1	Well, thank you, Allison, for writing it.
0:30.8	And just a reminder, you can write into Ask Jesse at winab.com, YNAB.com.
0:37.0	OK, the most important metric for me is not something that I see in the software.
0:44.6	It is net worth.
0:46.6	And if you want to, well, I'll tell you why it's net worth, net worth means your wealth
0:50.7	is increasing.
0:52.4	And that's the best score we've got.
0:55.4	So I know if I'm working the four rules, if I'm working my plan, if I'm making sure
0:59.8	that all my money's allocated, I'm looking ahead to those larger, less frequent expenses
1:04.5	and prepping for those.
1:06.6	When I'm being flexible, I'm bending, not breaking as it relates to my plan.
1:11.8	And as I'm creating a bit of buffer for myself where my money's getting a little bit older,
1:16.9	it's sitting longer between when I earn it when I spend, that's just a really good decision
1:21.2	framework there for me to work all of my inflows and outflows.
1:24.2	Well, as they flow in, what do I do with that money and then how do they flow out?
	...

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