Categories Below the Line
The Jesse Mecham Show
YNAB
4.7 • 1.1K Ratings
🗓️ 28 October 2019
⏱️ 6 minutes
🧾️ Download transcript
Summary
How do you order your categories? What's on top? What's on bottom? And how did you decide that?
Categories are easy to order once you understand your priorities. Rent, utilities, food -- these are non-negotiable. You can and should, however, drill down into the details of each category and ask yourself whether you could live without some of the expenses in that category. You need utilities to live, clearly, but if pushed, what would you keep and what would you cut? Could you live without internet if you had to?
Once you understand which categories sit above the line (necessities) and which sit below the line, then you can total up how much you spend on "below the line" items. Then ask yourself: do you want any of this money to go to above the line items?
Try this exercise to clarify your budget and see whether your budget is in line with your priorities.
Sign up for a free 34-day trial of YNAB at www.youneedabudget.com
Transcript
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| 0:00.0 | Hello, Winebbers my name is Jesse Meekham, this is podcast number 399. |
| 0:09.6 | We're getting close. |
| 0:10.4 | For Wineb, where we teach you four rules to help you stop living paycheck to paycheck get out of debt and save more money |
| 0:16.9 | I want to talk today about or ask you a question actually and that is how are your categories ordered. |
| 0:24.0 | When you're doing your budgeting, whether you budget every single paycheck that comes in, |
| 0:28.0 | every single day, once a month, I do it monthly, |
| 0:31.0 | a lot of experienced wine average do it monthly because any more than that is |
| 0:35.7 | Unnecessary but any less and you start to get a little out of touch so we do it monthly seems to work out really nicely. So you're sitting there you're |
| 0:44.4 | doing your budgeting session and you're allocating money. I want to ask you how are |
| 0:50.0 | your categories ordered? |
| 0:52.6 | From top to bottom, what is the very first category on your budget? |
| 0:57.4 | What's the next category? |
| 0:59.8 | And promote the idea that you could carefully order your categories by your priority and |
| 1:07.6 | get really specific about it. The first ones might be super easy. You might say, oh yeah, for us, |
| 1:14.6 | absolutely, we always want to give 10%, right? So that's number one. |
| 1:18.8 | Non-negotiable, right? Work through those as you go along, rent or mortgage, |
| 1:25.0 | non-negotiable utilities. |
| 1:27.0 | But break down the utilities for fun |
| 1:30.0 | and ask yourself, like, which one is the most important. |
| 1:35.0 | Where does internet land versus phone versus water, right? |
| 1:42.0 | Versus gas, things like that. |
| 1:44.6 | Be really, really intentional about the order of those categories |
... |
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