Budget Categories You Can DELETE #deinfluencing

Okay okay, I know—deinfluence isn't a word. But "defluence" doesn't sound much better. To phrase it in a way that's a little more grammatically sound: which two HUGELY popular budget categories have I DELETED from my budget, and have a strong argument for why you can delete them, too? It all comes down to our Four Rules. Find out which common budget categories these four rules replace in today's video.

Timestamps:
0:00 Intro
0:39 The Trend of "De-Influencing"
1:43 Category #1 You Don't Need
3:04 What I Do Instead...
6:08 Category #2 You Can Delete
7:01 Why You Don't Need This One, Either...
10:10 Outro
11:03 Bloopers

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[mkayl]

I think it’s just easier to manage an emergency fund category than budget into the future for the following reasons:
1. I don’t know what kinds of emergencies will occur so I can’t define a category for all of them beforehand
2. It’s a lot more overhead to juggle money across multiple months. I find that budgeting month to month and depositing whatever is left into the emergency fund is more efficient.

[andresfelipelondono]

The best content maker I’ve ever known. Every video is a masterpiece.

[shanewachlin]

Minority here, but the amount cars are discussed in these videos is insane! Likely a reflection of just how expensive they are and how dependent American's are on cars. Not anyone's fault, not a criticism, just an observation.

[EmilySchaefer-ig]

I found the concept of "what are you saving for?" mind blowing. I work in the financial services industry and have started asking customers what they are saving for. NO ONE KNOWS! Giving them homework to sit down and figure out what the money is for also gives them freedom and permission to spend it when they actually have a real need to use it. LOVE THIS!

[marleens]

Much agreed on deleting the Savings account, but I do still have an emergency fund (called “Zombie Apocalypse”) with a couple of months income in it. My reasoning to have this instead of budgeting ahead, is that if I do suddenly lose income, I would make some different choices in filling categories with that available “emergency fund” instead of budgeting ahead the way all normal months go. That way that same sum of money can last me quite a bit longer. This helped me a lot when I had to quit my job a few years ago.

[LeahBandB]

My brain works like this: all of the things that you prepare for with true expense categories are not emergencies IF AND ONLY IF the categories are well funded. So if I'm just starting out, I like to first focus on a lump sum emergency fund category that I can draw on whenever "emergencies" pop up that aren't fully funded with expense categories. Once this category is funded, I focus on the true expense categories. Only when those are nice and fluffed up will I consider getting rid of that emergency fund category. It makes it so that I don't have to scramble my whole budget moving money around to cover an expense. I just think it's neater somehow.

[HaveaBiscuitt]

Love the change in focus!! That “what is the savings/emergency fund even for” question was the first big breakthrough I had with YNAB. I had never questioned what exactly that money was there for, and being able to break those down into more specific categories was a huge, huge relief. But I appreciate this video because I still hadn’t completely let go of having those savings/emergency fund categories! I think I’m gonna take the plunge and put the rest of it into the categories I have and hide it! Thanks Hannah, love the new laptop lol

[ReneePosthuma]

We used to budget a few months ahead, but found we were less in touch with our money and more likely to overspend, so we only fill up one month ahead, and keep a small emergency fund to help cover another month. Our age of money is 60 days but happy with that as we aggressively ‘spend’ our savings to tracking accounts. And if we faced income loss we’d trim our spending, eat down the balance of our pantry, pull out of long term savings, and if need be, lean on family and community.

[marilynstein]

I think as long as you are PLANNING for emergencies, it doesn't much matter which way you do it or what you call it, as long as you're not duplicating the effort, like Hannah was. I find it simpler to have a lump category (that i call Security, most of it kept in an HYSA) that can cover truly unpredictable expenses, i.e., those outside of my planned "true expenses." The age of money tells me how many months of expenses I have covered without actually having to budget into the future. When the Security category grows larger than i think necessary, and the economic environment is right, it becomes a source of investment funding.

[JoshuaEdward]

This answered so many questions I had about whether to prioritize emergency fund or putting money toward future months' budgets. Thank you!

[expetesso]

Well done, Hannah!

In addition to aging our money and budgeting a full two months ahead and planning for all of our true expenses, I also have a “six month income replacement” category for our household. Before Covid I thought it was unnecessary, but given the lack of wages and out-of-pocket medical expenses that hit my little family in 2020 and 2021, this category will see us through another such catastrophe. (And if we never need it, we’ll roll it into a retirement category down the line.)

I get why you’re de-influencing the category, but this is one safety net I refuse to ignore.

[stevendlent]

Coming from a Dave Ramsey fan, the emergency fund lives strong in my ynab this truely makes a lot of sense. A emergency fund category ive been carrying for a decade is really just an emergency slush that SHOULD be covered by my well rounded true Very eye opening.
And thinking more about it....ive really never used it....unless my true expense catgories couldn't cover the

[watcherwriter]

Having my budget fully funded two months ahead gives me *so* much more peace of mind than a generic "emergency fund" ever did. I can clearly see that Future Me could pay rent and buy groceries even if I lost my job. It's fantastic!

[rolandblais]

I think "Emergency Fund" is the one I get the most pushback when discussing budget categories. I try to clarify that just about everything that would be an "emergency" is really just an inevitable, unscheduled expense, but I really like the idea of asking the question "what emergency am I not already anticipating"... and emphasizing Age of Money is an "emergency" fund... Thanks for another great video!

[kodiakfitty]

First Hannah: It's "are you picking up what I'm LAYING down" 🤪

I do keep an Emergency Fund category that is back by money in a Betterment account. It is invested in some stock funds but mostly safe bonds and treasury notes. Because it is more volatile than a bank account, I don't want my individual categories going up and down with the markets. In seven years, it was mainly tapped into my first couple years as I got my true expenses fully funded. Then I was in a situation 2 years ago. My brother suddenly passed away. He was single with not a lot of money. I was the only one in my large family that could say, "Put the funeral expense on my credit card (for cash back points) and I'll pay the card off from the Emergency Fund when the bill comes in." I would say that there are still some really weird unexpected expenses.

[chele]

Following a natural disaster, we had $8k+ in damage. Home repairs & a couple other “savings” categories were able to make the necessary repairs. Because of YNAB. Also made me take a hard look at my insurance policies, making better choices moving forward. Precisely like you illustrated. ❤

[momhouser]

I got rid of "Savings" ages ago and really love having particular goals (new car) and robust sinking funds (fix old car) for irregular big expenses. However, I still won't give up the "Emergency Fund" AKA the "Income Replacement Fund" because, honestly, I think most people need 6-12 months of money to protect them in case of injury, illness, or long-term unemployment...and I'm just not going to budget that far out into the future. It's cleaner and easier to have a set amount in the "Income Replacement" category (and keep it tucked somewhere earning interest) than it is to integrate all that money into the regular budget. If we did have a major melt-down, chances are everything would have to be re-assigned anyway.

[toboldlynerd_]

I agree with the emergency fund with a caveat, especially for my fellow disabled and/or chronically ill folks. Medical emergency fund. I have an "HSA backup" of $450/month. However, I will be taking $5k of my emergency fund and putting it straight towards a medical catastrophe fund. Think ER bills, hospital stays, anything unpredictable that can come with massive expenses in the US. Yes I hit my OOP max with insurance every year. Reality is, Im in the US and I'm disabled. Anything can happen.

[lizp.]

I'm fully funded through to the end of July. I have funds for most "emergencies" but, personally I want to still have an emergency fund of some sort as it gives me piece of mind that I can pull from it if necessary. I've been a YNABer for more than 10 years and yet I still feel better with a EF.

[Slopoke]

Personal finance is "personal, " as in not everything said in a YT video is going to perfectly address your specific circumstances. That's where your own wonderful brain can build on the ideas in the video (or article, or book) or reject them and try a different method. And that's fine. Just because some concepts may not work for YOUR circumstances it doesn't mean they're "wrong" or "irresponsible, " it just means it's not applicable to you right now (or ever, maybe).