Wednesday, April 14, 2010

Interview with Jesse Mecham of YNAB

It's no secret that we think budgeting is cool, and good, and important. Bloom's budget of choice is YNAB; it's a very helpful tool for our families (Anne's and mine) as we try to keep our financial houses in order.
Today we bring you a few words of wisdom from YNAB's creator, Jesse Mecham. Probably aren't many people on this planet who know more about effective money management than Jesse. So, listen up. And enjoy...

Hi Jesse - welcome to Bloom, and thanks for being here. Tell us a little about yourself and your family and give us the Reader's Digest version of the YNAB story.

Julie and I have four kids, from 4 months old to almost six. We began our married life broke, I recognized the need for a budget, and developed the YNAB methodology basically out of tweaking our own situation. Once we were expecting our first, I thought we could try and market the budget to bridge the income gap we would have with me trying to finish school and Julie staying home to be a full-time mom. YNAB's just grown slowly from there over the past 5 1/2 years.

In one way or another, you're exposed to peoples' financial lives quite often. From these interactions, what do you perceive as the biggest (or a few of the biggest) financial problem(s) facing individuals/families today?

Communication in families. People don't communicate their goals, desires, wants, needs, etc. I guess couples just assume that the other will be able to divine those things? You're starting from behind the 8-ball in that regard.

For individuals (and families), it's awareness. Being aware of your goals, being aware of what your money's doing. Just getting it to jump in line with what you really want instead of having your money do its own thing as you attempt to earn more money during the majority of your life.

What is your advice for people who say "we just don't have enough to save?" What advice do you have about breaking saving down into more manageable steps?

You always have enough to save -- even if it's literally just a few dollars. When people tell me they don't have enough, I usually give them a challenge to write down in a notebook everything they spend for one month. People find leaks in virtually every financial situation.

Marital harmony around finances is something you emphasize a lot. It seems that you have achieved this in your own marriage and believe that YNAB helps others achieve it as well. What are some of your thoughts/suggestions about resolving money-related conflict in marriage?

Sit down once a month and budget your money. Everything's out in the open and you and your spouse can stand across from each other financially naked. Uncomfortable at first, but you get used to it quickly and soon it becomes downright enjoyable ;)

When it comes right down to it, controlling spending, much like controlling a physical appetite, is a matter of changing behavior. From your observations, what kinds of things are really effective in helping people change behavior?

Mentioned above is just being aware of every outflow. Dieters keep a food journal (though I hate the word dieter because it sounds so fleeting) and anyone who wants to become a bit more connected with their money needs to record every outflow. It's not rocket science, but it takes a wee bit of discipline. We have a YNAB iPhone app in beta at the moment and I'm excited by how it's helped me get psychologically more connected to my purchases at the point of sale -- very effective. Everyone needs to be doing this (even if you hold up the check-out line for a few more seconds).

Budgeting has kind of a poor-man's connotation. Tell us why you believe budgeting is for people at every income level.

Thomas Stanley makes the greatest case for budgeting being an activity of the Rich (perhaps not Rich & Famous). Millionaires are aware of their finances. They have financial goals, and they have plans to reach those goals. At the end of the day, a budget is just a plan (a flexible, living plan).

Tell us why and how YNAB is different from other products/programs. How does it help people gain control of their finances?

We provide phenomenal support, live classes (free) and hours of video tutorials covering every nook and cranny of the program. We really want you to succeed in this! That's the best business strategy we can have is to convert people to budgeting and then have them convert their friends on our behalf ;)

YNAB, as a software program, is designed phenomenally well, primarily by Taylor Brown, the lead programmer. He's a genius when it comes to usability, workflow, etc. Not that most people really think about that stuff when purchasing a program, but in the long haul, it makes a big difference because you'll find it's literally a joy to use.

There's a bit of a learning curve on how the methodology works with the software. Take a free class, see what we're about, give us a trial run, and watch your bank balances slowly climb! :)

Thanks for sharing your thoughts with us, Jesse.
You can read more of Jesse's thoughts about life, money and budgeting at
his blog.

You can read more from about budgeting from Bloom here.
You can ask us your budget-related questions (to be addressed in future Bloom posts)
by either leaving a comment or e.mailing us at aplacetobloom at gmail dot com.


Joan said...

Jesse, thank you for sharing your expertise with us :)
You are wealth of budgeting knowledge, for sure!

Unknown said...

Thanks for the inspiration to take another look at my budget! There's got to be more money to save somewhere!

Melissa said...

It's on my computer waiting for me. I am very excited. Now I have to START using it. :)