We save a good portion of our after tax paycheck. 47% for the last 12 months, to be exact. I would love for it to be more, but 47% isn't too shabby. After tax income is about $79K. My gross income is $94K/yr and my spouse is home with our 2 little kids. We have ~450K in non-property NW, zero debt (but we are renters), and we are aiming for FIRE in 12 years (or less, hopefully).
Read about YNAB here and a couple things were notable to me:
One, my current budgeting method (yodlee) doesn't change our spending habits. I just look at my expenses as the month plays out, or at the end of the month and either pat myself on the back or tell myself "tsk tsk." We don't use it as actionable info. I go over budget quite routinely and I don't do anything about it. (maybe it's more of a goal than a budget?!) Because we are saving a good bit, it seems like not a big deal. Really, the only reason it is a "budget is because I plugged some estimated numbers into the software.
And two, YNAB rule 4 is to live on last month's income; I like this idea, but we don't do it. And here I thought I was respectable mustachian. Even though we save a bunch of our income, we still use the current paycheck to pay current expenses. Theoretically, we don't need the next paycheck since we have lots of cash savings to cover upcoming expenses, and have a portion of each check going into savings, even after the 401K contribution is taken out. But if we didn't get that paycheck, it would mean dipping into savings to cover cash outflow. In fact, it may be slightly worse that current paycheck for current expenses, since we use a CC and pay the balance in full when it is due nearly a month or more after we actually spent the money. So when we get paid on 11/30, I will use that $ to pay in full the CC bill that is due on 12/5 that includes transactions from 10/8 to 11/7. Essentially, I spent money on 10/8 that I didn't have (money that wasn't already earmarked for savings) until 11/30. Wow, that's sounds really pathetic. I would love to be more current with our expenses.
I don't know why, but this last issue bothers me. It is very confusing to me in whether it is a real problem, or how to resolve it. If I just transfer a paycheck's amount of cash from savings to checking, is the problem solved? Is that cheating? Do I need to cut back on spending and gradually work on making more frequent payments to the CC?
Will YNAB be of value to me, given my circumstances? At least a $54 value?