How a Copywriter Who Loves YNAB Does Money

Photo credit: Tiffany Von Arnim, CC BY 2.0.

Anna (not her real name) is a 28-year-old contract copywriter in Seattle.

So, Anna, how much are you making?

This is an interesting question for me because most people seem to answer in yearly amounts. But I work hourly and my hours vary from week to week, so I never really think in a full year’s amount. I make $35/hr and I work anywhere between 25–35 hours a week.

So 35*30*52… $54,600, give or take. Is that about fair?

That sounds high, but I only got the raise to $35/hr in June. So yeah, probably.

Do you get to choose how many hours you work, or are you assigned hours? Or, to put it a different way: are you working as many hours as you want?

I do prefer 30–35 and my bosses know that, but it does come down to project availability and where I fit at any given time. Right now, because a pretty steady project has gone away and I’m jumping onto a couple of other things to fill that gap, I’m only going to get 25 hours a week for a while because that’s just what’s available.

How do your earnings compare to your expenses? Are you earning “enough,” whatever that means to you?

I would like to be earning a bit more. I am making enough to cover bills as well as buy some books, eat out sometimes, etc. I would like to have a better cushion for handling emergencies, and to better plan for time off. I still very much feel like taking a good solid vacation isn’t really in the cards, because I don’t have paid time off so there’s the expense of wherever I’d go plus the hours not getting paid while I’m gone.

I hear you on that one. #freelancelife

Hahaha yeah.

What are your major expenses? Rent? Debt?

Rent and student loans are my two big ones, and health insurance is pretty big for me right now too.

How big of a chunk do those expenses take out of your pay? Do you count taxes as an “expense,” since you’re probably getting paid pre-tax?

I’m actually not. The agency where I work right now has me set up as a temp-to-hire or something, so I do have taxes taken out of my pay there. Basically, when I started working there I’d been kind of bouncing around in Seattle unsure where I was going to end up or what I’d do.

Now that I’ve gotten more steady I think I’m going to stick with freelance and I do want to figure out how to handle a fully freelance business, but I also don’t see any need to change my contract with this place if I’m not going anywhere yet. That’s actually something I’ve been thinking about a lot lately: how to set myself up as a freelancer with a business license and everything else, so that if/when I need to move around, I have everything set up for me to do so.

And as for how big a chunk for those expenses, I’m doing some quick math…

I mean again it varies, but my big expenses take 1/2 to 1/3 of my paycheck depending on the hours I’ve worked and the size of that month’s earnings.

So you’ve got 2/3 of your income left over after rent, student loan payments, and health insurance?

In a good month! The last couple of months that I’m looking at right now had a couple of three-week paychecks (I get paid twice a month and so occasionally the dates work out that way). I think 1/2 is closer to average.

Got it. What do you do with the half that’s left over? I’m guessing discretionary expenses, food, transportation maybe… but also savings? Retirement?

Yes, the other half goes to general “living in an apartment” bills, groceries, medical (a couple of regular prescriptions), and public transportation. I have a very small automatic transfer that goes to savings every month and I try to put in extra when I can. I do have a retirement fund also through the agency (which is great!) so that comes out with taxes, and I’m trying to build an emergency fund.

I use You Need a Budget (YNAB) for my budgeting, and since they allow you to budget for this month as well as for the next two months, I’ve been trying to get out of the paycheck-to-paycheck cycle and get the next month budgeted ahead of time. Right now, looking at my budget, I have November almost completely covered, I just need to add a couple of things to it with my next check.

Budgeting a month out has been huge for me in feeling more secure in a very uncertain freelance life. I’d love to get to two months ahead, but that will take some time. Honestly, the main reason I was able to GET to one month ahead was because my grandmother died, and my dad gave me and my sisters each some money from the sale of her house. So I was able to pay off my smallest student loan and put the rest of that money toward my cushion

It’s hard to get one month ahead! It took me FOREVER to do it. (By which I mean, like, four years.)

Yeah, it’s really difficult. I think once I did it, I was like “oh cool now I just need to get to two months.” But oh wait, I’m not gonna get an extra $3,000 ever again sooooo this is gonna take some time.

So how do you use YNAB with variable income? I know that YNAB only lets you budget money you already have, but if you don’t know how much you’re going to earn in the near future, how do you know where to budget your current money?

I’ve been a budgeting nerd for a long time, and I’ve used a bunch of different systems. I’ve been using YNAB since March 2015 and really love it. Before I was budgeted ahead at all, I had a list of bills and due dates, and I referred to that list every time a check came in. So first check comes in, and all the bills due before the 15th get budgeted and paid now. Then any extra goes to the other fun stuff. Then when the second check came in on the 15th, I budgeted for (and paid for) the rest.

I also will pay extra close attention to the agency payroll schedule, and which weeks are in which pay period, and try to estimate out ahead of time how much I’ll be getting — especially if I know I just had a period of fewer hours. So I at least have a sense of when a lower period is coming up and can spend less on fun things to prepare.

One thing I love about YNAB is that it helped me get out of credit card debt at at a time where I was not in too deep but very well could’ve been soon.

OOOH tell me more.

I got my first credit card when I moved to Seattle, a little more than three years ago. And I’m from Mississippi, so going home for Christmas was a huge expense. And my boyfriend didn’t have a credit card yet so plane tickets went on my card. And we couldn’t pay them off completely. So I built up a balance, and then I did a balance transfer to a new card to avoid interest, but then still built up a little bit of a new balance on the first card.

I just didn’t have a good understanding of how to think about cards. It was always “buy this now, and I can cover it out of next month’s money,” even though I couldn’t actually know that!

YNAB forced me to look at my debt and see it along with all my other daily/weekly/monthly expenses. It also forces you to budget for ANY new spending on a card out of your current budget. So it really changed my thinking from “pay for it later” to “Can I afford this now?”

Now I use my credit card mostly for earning points at certain places, but I pay it off a couple of times a month, because it’s all still coming out of the budget that I have right now.

I don’t know what it is with Seattle and plane tickets! One year it cost $900 to fly to Iowa to see my folks for the holidays. I’ve also put those flights on credit cards, because again, if you’re not one month ahead, you’re probably not $900 ahead either.

Are you saving for this year’s holiday tickets now? I know YNAB encourages you to set money aside for upcoming expenses.

We aren’t doing Christmas at home this year, so I’m not doing that. But we are going to visit Chicago in March (and see the Chicago production of Hamilton!) so I need to start putting money aside for that really soon.

I’ve also used YNAB for acting classes that I’ve taken here, which isn’t as long-term of a goal, but I was able to set a goal in YNAB for needing X amount of dollars by Y date and it would tell me how much to put into that category each month.

And because I was, once again, surprised by how expensive it was to renew the car tabs on our license plate this year, I’ve just set up a new goal to save $160 by September 2017 and am putting $13.34 into that category each month to get there.

That’s very smart.

I really like YNAB’s goals feature and how it works out the math for me. Plus if you don’t put the money in, the category shows up as yellow or eventually as red, which my very organized brain hates to look at.

YES! You must fix the red bits!

Yes, exactly, haha.

In addition to YNAB, what do you feel like you do really well financially? What do you wish you could do better?

I feel like I do day-to-day budgeting extremely well. I have a healthy balance of spending on something because it’s fun and enjoyable, but not spending on the next thing to keep everything working well.

I’d like to plan for the future better, and I’d like to prioritize time off. Right now, any vacation I’ve taken has been because I felt super burned out and needed to take time right now, so then I could only take two or three days of a staycation because that’s what I could afford. I think everyone should prioritize time off (and have paid time off) and I would really like to actively plan a good, long vacation and save accordingly.

I’d also like to just understand things like retirement accounts better. I have one, but I don’t really deal with it and I know I should.

So here’s a follow-up question: how much of the “things you wish you could do better with money” could be solved with “more money?”

Like, if you were earning more, would you take more time off? Or would you feel like you couldn’t take time off because you’d still lose money?

Hmm. Very good question. I think it would be really easy to stick with the same habit of “oh no I can’t take time off.” But I also think that if I were making more and there was more left over to put toward a vacation (after expenses) it would be easier to do so.

Like, right now, I recently budgeted out all my money from a check and I had just a little extra, like $13, so I put it into a vacation category. That’s a totally legitimate start, gotta start somewhere, but it was so small, and then some opportunity came up to eat out or do something, and I pulled the $13 from that category. I think that if I even had enough money left over to just get a good start on that saving, it would feel more like I was robbing myself if I didn’t keep it going, you know?

And there’s always a balance, because it also feels good to put extra money towards the next month and feel ahead there. So I have to remind myself about priorities and maybe say, OK I’m ahead for right now, I can put a little money here instead.

And, since you’re budgeting so far ahead, you can adjust as your expenses actually happen.


It’s not like you’re locking those vacation dollars in a safe.


So last question then: what advice do you have for Billfold readers?

Oooh. Maybe a lot of Billfold readers already know this, but my advice is don’t be afraid of the plan. So many people see budgeting as taking away spontaneity. But really, having that plan in place allows you to be spontaneous without guilt about it later. So I’m always an advocate for knowing your money, knowing where it goes, and planning ahead.

And, with that, don’t be afraid to talk about money. I hate how taboo it seems to be. I know it can suck, especially when you’re not making much, but I try to be really honest with my boyfriend and also with close friends about when I just don’t have the budget to eat out or get drinks.

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