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The Jesse Mecham Show

Why is Forecasting Bad

The Jesse Mecham Show

YNAB

Kids & Family, Education

4.71.1K Ratings

🗓️ 29 October 2018

⏱️ 4 minutes

🧾️ Download transcript

Summary

The problem with forecasting money you don't have yet.


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Transcript

Click on a timestamp to play from that location

0:00.0

Hello, Wienabers. My name is Jesse Meekam, and this is podcast number

0:07.2

348 for Wienab, where we teach you four rules to help you stop with them

0:10.6

paycheck to paycheck, get out of debt and save more money.

0:14.2

I was scanning the interwebs and came up on our subreddit, the Wine App subreddit on Reddit.

0:22.1

And one of the posters was asking why is forecasting bad.

0:25.8

And it's, I would just want to address that here a little bit.

0:29.9

It's not that it's bad, it's just that it is not budgeting the way we teach it and I'll tell you why.

0:37.3

What happens, well, Rule 1, we give every single dollar a job and it's extremely important that that job produces

0:46.1

scarcity or that rule I should say that process produces scarcity so when

0:50.6

someone's giving something to A they also can't give it to B or they have to weigh those two in combination.

0:57.0

When we are doing the zero-based budgeting, you give A, B, C, D, all jobs, you give them all dollars, and everything's

1:05.1

working out the way you'd like. It feels good and you're getting your priorities flushed

1:10.3

out as you do so. What happens is then you're feeling this scarcity kick and

1:16.4

you're saying hey if I give more to A I can't give to B or more to B I can't give to

1:20.1

C and I don't like this. Another example of this that many of you have

1:24.2

probably experienced you'll say that you feel broke but you'll look at your

1:27.8

checking account balance and it's high it's the highest it's ever been.

1:31.1

I was chatting with a friend of mine whose friend has been converted over to Wyanab, a real estate agent.

1:38.0

And the guy says, well, I feel totally broke now, but my checking account balance has more than it's ever had, and that's exactly

1:45.3

the mindset you want.

1:46.3

He's feeling scarcity as it relates to the eating out category or the, you know, whatever category. He's's running wine ab on his business as a realtor

1:55.9

so he's feeling broke even though he's not actually broke and that's that's

...

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