I love the start of the new year. It feels so full of possibility and opportunity. It may be just a turn of the calendar page, but it feels like a fresh start.
And since I started this new year with a big mistake, it was a little like having two fresh starts.
Just before the new year, my very favorite budgeting software, You Need a Budget (YNAB), unveiled a major update. Instead of a one-time purchase of a desktop budgeting software (and accompanying apps), YNAB rolled out an entirely web-based budgeting platform with an annual subscription cost.
I’ve used YNAB for several years and have always felt the one-time investment was a worthwhile one. I wasn’t very excited about the new $50 annual price ($45 if you sign up by January 31, 2016), but since they allow you a 34-day free trial, I decided to check it out.
And I fell in love with YNAB all over again. While there are still some things that have yet to be included in the update, it’s easy to see that the new YNAB is going to be a powerful tool for getting out of debt and staying out. The goal setting feature is one of my favorite features of the new YNAB and I also like they way they handle credit card transactions for folks like me who use credit cards to save money.
And this is where I got tripped up. Because the new YNAB handled credit cards differently than the old version, I decided that I would pay my credit card balance in full at the start of the new year (instead of on the 10th of the month like usual) so that I could make a true fresh start for the year.
This was no small bill. It included Christmas gifts, some kid and pet-related expenses, and all the usual bills we put on there to take advantage of our credit card rewards. We had the money in savings to cover the bill in full and I worked my magic in the old YNAB so that when I started using the new YNAB on New Year’s Day, it would be a clean, fresh start with a zero credit card balance. I paid the credit card bill online through my checking account and moved on with my life.
On the first business day of the new year, I stopped at a local store to make a purchase. My debit card was declined. I figured it was because the card was set to expire soon, so I just paid with cash and figured I’d stop at my bank to see what was going on.
And that was when I discovered my mistake. I forgot to move money from savings to checking before I made the payment on my credit card. My checking account was showing a deficit of $1,100! YIKES.
Fortunately, I was able to move the money I needed over to cover the deficit before any fees began accruing on my account, and the bank was very nice about it since it is the first time in my whole life I’ve ever overdrawn my checking account.
But talk about feeling dumb! I’m the Northern Cheapskate, after all. I’m not supposed to do things like that. I’m not supposed to make $1,100 mistakes.
I learned a few lessons from that big mistake.
First, I learned that sometimes I get a little too excited about doing good things with my money (like trying a new budgeting software and paying off credit card bills early) and I need to slow down and make sure I’ve covered all my bases. I also learned that the new YNAB can be connected to your bank accounts. If I’d done that, I may have caught my mistake a little quicker.
Secondly, the experience confirmed that I really do like my small-town, community bank. I doubt a larger bank would have been as kind and helpful as the folks were at my bank.
I was reminded that not everyone has the money in savings to cover such a large overdraft, and for that, I was very grateful that I had been good at pinching pennies.
I learned that you can make fresh starts at any time – even if it’s not a new year. In fact, YNAB even has a “Fresh Start” option for those who fall off the budgeting wagon for awhile and want to start again.
I learned that change is good. Using the new YNAB has gotten me excited about budgeting again and is causing me to do some much-needed goal setting. I’ve only been using it about a week, but I can already tell it will be worth the annual fee.
I learned that it’s okay to make mistakes, but you’ve got to learn from them. And that’s the piece of advice I want you to take from my experience.
If you’ve gotten yourself in a heap of debt, or done something stupid with your money, it doesn’t make you a bad person. It was a mistake. Learn from it, correct it, and make a fresh start.
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