The you need a budget system was designed by Jesse Mecham someone and has legions of fans who swear by it as a way of managing your money.

How does the “You need a budget” system work?

It’s essentially a zero based budget system – i.e. you plan where every single bit of your money goes.  The full system comes with a paid for app and website where you enter in every thing you spend manually.  The app then helps you manage your money and reminds you where it’s all supposed to be going.

What makes this budget different – and it is a great principle – is that eventually it helps you work towards living two weeks to one month ahead of your income.  So instead of living from paycheck to paycheck you have a two week or one month buffer.

Imagine not having that feeling of not being sure if there’s enough in the account to cover the next bill, but just knowing that you are covered for this month and even next month too?

The “You need a budget” rules

To get a handle on the You Need A Budget system, there are four simple steps or rules.  

  • Rule One: Give Every Dollar A Job.
  • Rule Two: Embrace Your True Expenses.
  • Rule Three: Roll With The Punches.
  • Rule Four: Age Your Money.

Note that all of these rules can be followed and actioned without buying the app that goes with it.  The full system is paid for ($6.99pm) and probably makes life a bit easier. You can get a free trial to get your head round it and cancel if it’s not for you.

If you don’t want a monthly charge but are happy with a small outlay you can buy the book and then make your own plan.

You Need a Budget: The Proven System for Breaking the Paycheck-to-Paycheck Cycle, Getting Out of Debt, and Living the Life You Want

But you can always do it yourself with a spreadsheet, pen and paper or work out your own budget plan using a free money management app.  

Let’s look a bit deeper into the rules:

Rule One: Give Every Dollar A Job.

If you have never really tried to organise your finances this might be a new concept, but a fair few of you will already be familiar with this idea.  

The gist of it is that – like a business – you look at the money coming in and you give every dollar (or pound or yen or whatever your filthy lucre) gets allocated a purpose.

You got regular bills coming in? Stick em in the budget

You got debts to pay off? Stick em in the budget

You want to save up for something nice?  It goes in the budget

But it’s not just the necessities like bills and groceries.  You also assign your money to going out, beers, fun stuff, travel – anything you spend your money on, it goes in the budget.

This – like any zero sum budget – means that you always know what you’ve got in the pot to spend and you can spend it guilt free.  

Want that night out? well you can because you assigned those dollars to it.  

How the You Need A Budget System works

Want to go out four nights in a row?  Well that means you have to choose something else to cut back on to make that happen.  It’s not impossible, but it means that you are much more aware of the consequences of your spending decisions.  

If going out means not making your credit card bill deadline, you will probably decide that it’s not worth it and opt to do something a bit cheaper instead.

The great thing about this type of budgeting is that while you may overspend here and there, the chances are that you are putting a lot more money towards your big life goals than you would have done if you had just let it float along unchecked.

And when you nail this method, financial stress gets less and less as you are more able to pay your bills on time.

For more information about doing this kind of budget you can read about the Zero Based Budget method (which is what its called when you account for every dollar).


Rule Two: Embrace Your True Expenses.

Some of this budgeting malarkey is dead simple – for example I know that my mortgage and household bills will cost me £1200.   Bills and regular spends are easy. What are often overlooked are the once every year or once every few months spends.

What the You Need A Budget system gets you to do is look at all the irregular spends such as Christmas or car maintenance and budget for them too. Clever huh?  

So embracing your ‘true expenses’ means working out everything you spend over the year and not just your regular monthly outgoings.

Nailing this in your budget means that you are never caught out by the non-monthly expenses.  


Rule Three: Roll With The Punches.

Everyone overspends. Oh yes they do.  

Maybe you get better at managing money over time, but even people who are brilliant at money have spendy patches now and again.  Any budget should be flexible enough to deal with overspend and the You Need A Budget system is no exception.

If you have the app, you simply put in your overspend and work out how to re-budget so that it is covered for the month.

If you don’t have the app, just work out where in your budget you can cut to make room for the overspend.  If push comes to shove, you can take it out of next month’s budget.

Rule Four: Age Your Money.

This is the coolest bit of the You Need A Budget system in my opinion.  Once you’ve nailed your monthly spending habits and got into a groove with all the other expenses, you can start to plan for money domination!

With this rule the idea is to ‘age your money’  – pay all your bills with old money that’s been sitting in your bank account for at least two weeks instead of only being able to pay them with that freshly earned pay packet.

This is by no means an overnight project, but if you can put aside a little bit every month or every two weeks so that you have your next paycheck all saved up, you can start paying your bills with your old money, knowing that you’ve got this covered.

And you’ve got next month covered too.


Final thought

I don’t use the You Need A Budget system because I am happy with my spreadsheet, but I firmly cheerlead all the ideas behind it.

(So I am not a YNAB affiliate – although there are amazon affiliate links if you buy the book from here – feel free to click the link or not).

If you want to find out more you can go to the website, read the book or sign up for a free trial.  

To quote You Need A Budget themselves:

“Remember, budgeting is not restrictive. You won’t be spending less, you’ll be spending right. You can do this!”