Accelerate Your Legacy

94. Mastering Your Budget with YNAB: Insights from Financial Coach Cortney Kaveh

• Laura Sexton • Season 2 • Episode 41

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In this episode, host Laura Sexton interviews Cortney Kaveh, a personal and business financial coach who specializes in using the budgeting tool YNAB (You Need A Budget). They discuss the importance of budgeting, the features and benefits of YNAB, and how it can help individuals and business owners effectively manage their finances. Cortney shares insights on simplifying budgeting processes, the significance of setting financial targets, and how good financial stewardship can leave a lasting legacy. They also touch on high-yield savings account recommendations and share personal anecdotes about financial habits and identity.

In this episode we’ll discuss:

.     Setting Up and Using YNAB

.     Tracking and Reconciling Finances

.     Building Financial Habits and Identity

Cortney Kaveh:


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Laura:

Hello and welcome to the Accelerate Your Legacy podcast. I'm Laura Sexton, your trusted financial coach and money mindset specialist. Join me as we explore the world of money and money mindset while also paving the way for a lasting legacy that extends far beyond money. Together we'll eliminate stress, amplify freedom, and ensure you stop paying for your past so you can start saving for your future. If you're seeking peace in your finances, more margin in your budget, and a legacy that inspires generations to come, you're in the right place.

Audio Only - All Participants-1:

Hello accelerators and welcome back today. We're going to be talking with Cortney Kaveh, personal and business financial coach. She is also a personal friend of mine. I'm really excited to have her here. One of the reasons why I asked Cortney to come be on the podcast today is because. She knows a little something about a thing called YNAB also known as you need to budget and I know very little about it other than what I've worked with a couple of my clients on. So Cortney, I would love for you to introduce yourself to everybody say hello to the accelerators and then I have a big question to ask you. Hello, everyone. Laura, thank you so much for having me on. Like she said, I am a personal finance coach, small business finances, all the above. Think of me like your financial life coach. I'm here for all of the handholding, the emotions, everything in between that comes with daily money management. But I especially love working with business owners and yeah, YNAB is a tool that I use. I'm a YNAB certified coach. So yeah, I'm excited to get into it today. Well, the first question I like to ask my guest, Cortney, is who is someone whose legacy you would like to emulate? That's such a good question. I would say my best friend's parents. So growing up I didn't grow up in a Christian household. I am a Christian now. But my friend, my best friend's parents really, their family introduced me to God. I go to church and everything. And they just, they're the most hospitable people I've ever met. And their place was the place to be. Everyone had fun. There was always food and they just really did a great job showing the love of Jesus to everybody. So that is whose legacy I would want to emulate is just that hospitality and love shown towards everybody. I absolutely love that. I know one day when my husband and I have our dream home. Whatever that means, we would like for it to be a place for our kids to bring all of their friends where it's a safe place to gather. We'll have a phone basket where you get here, you put your phone in the basket and we're just going to pretend like it's 1990 just for a while. You know, like we're just going to turn all the screens off, go outside and play. That's what, that's what we want. I love that. And I love that you had that as an example for you. Okay. So I am a paper and pen kind of budgeter that has been, I have a better connection when I write things down. I remember them more. So it's easier for me to be paper and pen. I do work with my clients on things like every dollar I used to do mint, which is no longer a thing. And I have a couple of my clients that use YNAB, but I'm not as familiar with that. And I know that you have been certified by them to teach it. So I would love to ask you a couple questions about that if you are ready. I'm ready and I want to say that I love that you're more of a pen and paper kind of budgeter. That was me for our whole debt free journey. I used pen. Yes, not pencil and paper for over 5 years. I have since found a tool that I like better. And yes, I'm ready. Ready for the questions so here's a question that I wrote down. Does YNAB. Integrate with other tools that people might already be using, or is it a standalone type product? Yeah, it is a standalone type product. However, if you are migrating to it, let's say from Mint, RIP, mint you can download, you know, A CSV or like a CSV Excel sheet of your bank history or whatever, and you can pop it into YA if you want. The thing is, with YA, it starts. Like it's very much the here and now. It's not meant to be an accounting system. So sure you can pop everything into YNAB and take the time to categorize it for the year. If that will just make your brain happy, but it's not a requirement. Instead of looking at our bank balance, for those of us who don't budget, we decide what to spend. You look at YNAB. So instead of opening the bank app, you open the YNAB app and you're looking at the job for those dollars instead of just a little pile of money there. So to answer your question, it doesn't really talk with other systems, but you don't really need it to, if that makes sense. Okay. I'm interested in the setup of YNAB. Does it, if I were to go on totally fresh, haven't ever seen it before, Am I going to be massively overwhelmed or are there going to be prompts and things to help me get started? They've done a lot better job recently of onboarding you to the platform better. So it takes you through a series of questions. That basically how you answer them is how they start setting up your budget. So it's being populated as you answer the questions, which is a huge help. Oh, that's cool. They direct you on each step. So the most important thing to know coming in fresh to using YNAB as you are onboarding to it and answering their questions. Is that there's two different steps that you're taking. The first step is setting your targets. That's essentially telling your budget your intentions for it. Like, creating a sort of template. So you're saying, Alright, I'm gonna pay this bill. Here's the amount. And by this date. And that's in general what's gonna happen month to month. So you're really in the planning phase when you're setting targets. You're not actually budgeting yet. You're making a sort of recurring template. Then, when you go to add your accounts, your money appears, all that, then you actually are budgeting. You are assigning dollars into each of those cells, so you're giving every dollar a job. That is the point at which you are budgeting, is when you go to assign the money. Then you're ready to start using it. When you say setting targets, is that setting up when the bills are going to get paid, or are you goal setting? Both. Okay, tell me more. There is a couple different types of targets. So one type of target could be every month I want to pay this bill in this amount by this date. There's also things called true expenses. If you're an every dollar user, you may call them sinking funds. These are the expenses that exist in our life, but may not be a monthly bill. And so I'm still setting a target to those goals. I'm still saying in six months. I need to pay my car insurance premium in this amount. And then my budget actually tells me right there on the screen, Hey, you need to set aside X amount of dollars every month to let that build to that amount in six months. It's very clear, very easy. I love a clear sinking fund. That makes my heart happy. Yes. And you don't even need to move the money into savings unless you want to, you know, it just tracks it all really nicely there for you. I'm a big fan of the high yield savings account. I put my sinking funds over there, but you don't have to, if that's overwhelming to open more accounts. What are, I mean, if you're willing to recommend, and if not, I can cut this out. Are there high yield accounts that you have found that you like working with? Yeah, there's several out there. I use Ally Bank, A L L Y. Ally is great because it has buckets, which is fun. So you put the money in the account and you get to organize them into buckets instead of just having one pile of money. If you're using YNAB, it does that for you too. So it's okay. You don't need Ally to keep your savings organized. You can simply do that in YNAB. CIT has been a good one. Marcus by Goldman Sachs. There's BaskBank. Now, I do want to throw a little something in there for your listeners right now on the subject of high yield savings accounts. I know that interest rates have been changed recently and you're going to see high yield savings accounts rates start to come down slowly, but they are already coming down. High yield savings accounts, APYs, are at record highs right now. When the pandemic started, keep in mind that they were paying out Wait one and we've been seeing four to five percent like post pandemic, right? So just know that those rates will come down. So I just want to throw that out there that it won't always be like this, but take advantage while it is. It's one of those things. People are like, Oh, interest rates are going down. This is wonderful. And I'm like, no, my high yield account is not, I don't want that. Exactly. So does YNAB help you create a holistic picture of your finance, it does which is really cool. So you are encouraged to really link everything, every account and asset and liability that you have, because it does a great job of tracking your net worth over time. So for example, linking up your checking savings investment accounts, They in YNAB, like not every account is a budget account. Like I'm not actively managing my investment balance in my budget. Right. So we call that a tracking account. So you can list so many things as tracking accounts, your investments, your car values, car loans, if you have them, your mortgage, your home value. So really like all assets and liabilities can be listed on your YNAB. And so that. If you just click on net worth, it'll show you what your net worth is, and it'll show you month by month how it's changing over time too, which is really cool. That is cool. So another thing that we've kind of talked about and I've talked about it on the podcast before, but I think it's really important. And you brought this up a little bit in the beginning, you talked about not looking at your bank account to find out if you had the money for something, right? We're, we're looking at the budget. So how does YNAB help you track the difference between what is budgeted and what you actually have in your account? It's probably my favorite feature about YNAB. In the past when I've used other budgeting softwares, there's not really an easy way to reconcile that. So you're kind of going on good vibes and feelings, hoping that it all matches up. When you're in YNAB, you have this three step flow once you get in there. You categorize transactions, reconcile your bank account balance, and then you're ready to budget. So we do this routine when new money comes in. So you get paid, you do this routine. We're categorizing transactions daily, like we want to keep our budget up to date, but I recommend reconciling the account balances. But like when you get paid next, or else your plan won't be correct, right? The plan is only accurate. We're like, we're making a plan for the account balance. That's all we're doing. And so if the account balance is not correct, the plan will not be correct. So we have the ability to just go in there. Look at our posted online bank balance. Look at what YNAB says we have cleared. Match those two up if they don't match up. We find out why, you can do a little investigating, but you just click the reconcile button and then it fixes it. Will you define for the listeners what reconcile means? Reconcile means to make sure that your posted bank balance is matching What your budgeting app says that you have on hand. So it's just reconciling the two. It's making sure that they match and your plan is correct. Thank you. Cause the only context I have for reconciling anything is my checkbook. Oh yeah. So I still write checks. I'm one of the, I think six people in the United States that still writes checks. Because I like the practice of it and I like to show my children me doing the checks and like them being a part of it, especially for like our tithe and things like that, they get to be a part of it. But when it comes to reconciling your checkbook, what we used to do was, you know, you'd write a check and then you'd make sure it clears your bank account and you don't want to be in a situation where you forgot to write something down and then you were like, what do I do? Cause I forgot to write that down. Now I'm overdrawn. Now we have to, we have to fix things. You have to make it balance. Is there a reconcile For each budget account, like, do we have to go through those things too? Can we talk about that? Yes. So each budget account has the ability to be reconciled. So when you work with YNAB you don't need, like some people come into it with multiple checking accounts or multiple savings. And really with YNAB, all you need is one checking, one savings because You can organize it so well and you don't need those physical accounts anymore. All that to say is that whatever checking or savings accounts and credit cards you have in there, they will, you can, you will and should reconcile each one on a regular basis. But I also really like the simplicity of one checking account, one savings account. I have clients that have, you know, I have one client in particular that I can think of and he had about eight different savings accounts and his wife was like, I don't know what any of these are for. It would stress her out and she's like, I don't want to talk about money. So when we simplified it, we did go down to two. Because he couldn't live without two. He needed two. He's my little squirrel. Like, that's just kind of his personality. He wants to squirrel up a little here, a little there. We got our squirrels with all their nuts and they want to bury them in all these different places. And it can be indicative of a scarcity mindset, but then it can also just be someone who's trying to achieve order and organization, but it's just too much. And there's just different ways that we can do that. And I, it's just one of those things that every time you would talk about it, I was like, okay, little squirrel, where are we going to put our acorns today? And that was just his way of knowing, Hey, we're making things a little bit more complicated than we need to right now. But the simplicity, one of my core values is that money should be easy. And if we're overcomplicating things, like let's just settle it down. It's going to be okay. And that's one of the reasons why we like these budgeting softwares, where we can just make it simple. One of my clients, his budgets on YNAB, his different categories, he has little emojis. Which is so funny. He's like, Oh, I know which category to put it in based on the emoji. And I'm like, that's genius. And I love that you said that money should be easy to circle back to your original question to me. I think when some people come into YNAB, they can feel overwhelmed or like it's too complex or visually overstimulating. And you can, there are things that you can do to make it more simple. Like the emojis. Like keeping your categories simple and not over complicating it. If you looked at my budget, you might fall over just because I have so many lines in it, but that's how I like it. And that's how my mind works. And I don't feel overwhelmed by it, but other people could see my budget and be like, Whoa, that I would never do it that way. The simpler you can, I just want you budgeting, like, in the first place. If you need to keep it so simple, then let's not get granular about it. Maybe in the future, if that's helpful to you, great, but keep it simple. One of the questions that I've been asked before it, when people are getting these software, because a lot of times what we want to do is we want to have a software or something that's going to do some of the work for us, like, just tell me what to do. And a lot of times is personal finance coaches. That's what people are coming to us. They're like, just tell me what I'm supposed to do. Is there something inside of YNAB that helps you create personal processes or personal policies? Or is that really, if you're struggling with that, you just really need to sit down with a coach? It's all going to depend on the person if they need to sit down with a coach, honestly. But remember when I told you about setting targets? So if you have targets for everything in your budget, which you should, You will then be able to use this auto assign feature. So when we use YNAB, the question we ask is, what does this money need to do until new money comes in? So it's kind of like a budget by paycheck tool. Okay. That's awesome. Through using targets, you can actually forecast ahead, but it's not a forecasting system, if that makes sense. But what I was going to say was, If you set targets to everything, when new money comes in, you can click an auto assign button and it will assign money in your budget for you. So it's not going to categorize transactions for you like mint. There are some great features in YNAB that. That's still, like, it's creating friction in the sense that, hey, you have to confront your spending. You need to categorize your transactions. But if you set up the targets, you now have a template to then auto assign your money when new money comes in. You just click it and boop, boop, boop, boop. It puts everything in the assigned column for you. So Cortney, you mentioned habit change and you said that there are things inside of YNAB that will help you change your habits. And that's what we're all about. Like you control your money. That's what we want to get you to, but you said it helps you change your habits. How does it do that? Did I say that? I don't really know if that's what I, well, I think, I think what was said was Mint didn't have things inside of it that would help you change your habits. Ah, yes, yes. And what I mean by that is, Mint, it kind of like auto categorize a lot of things for you. It wasn't always accurate, kind of like accounting softwares. It was much more of an accounting tool that said it was budgeting tool in my opinion. And so people, and I say people, because it's the clients that I have worked with in the past who have used this or come to me using this and still needing my help. So that's the experience that I'm drawing from. They were aware of where everything was going. They still didn't like it, but they were not checking in with it throughout the month because they didn't have to, like it just, did it all for them. And so the first step to behavior change is awareness, but then needs, then there needs to come action, right? That is, Keep in the transactions categories and checking how much you have left to spend. Like that is the next simple step, right? And then from there phase three, that is like habit formation. So the step two, what was like very largely missing from mint. And so that's one thing that I love about YNAB is that you Are forced to like, if you, if you don't update your transactions, it's not going to be accurate and it's going to get very messy. Luckily they have a feature called fresh start. You can just give yourself a fresh start. If you get too far behind, no guilt. But you have to be able to get in there, confront the spending, give it a category, and then you can then check the available column. How much do I have left to spend for groceries for entertainment? Those kinds of things. I really love that and I'm kind of thinking I need that in my life right now. You mentioned going in frequently. How frequent should you be going into YNAB and looking and checking into things? Ideally daily. Okay. I encourage people to find for lack of a better term, like find a dead spot in their day where they're on their phone anyways, or the coffee is brewing or there's some sort of lull where you have the time, you have two minutes to get in there. And when you do that, you will find that it is a lot easier because the worst thing is seven days go by You open your app or you, or you log in online. There's like 75 transactions and you feel overwhelmed. It's a chore. It's going to take an hour of your time and you just start to dread it. And I'm telling you right now, if you can be in there consistently, it's going to go so much better for you. And you're going to actually know where you stand and making more informed decisions, because so many people come to me with. money, stress, money, anxiety. And part of it is just the not knowing the not knowing where do I stand financially? The I'm going to swipe my card and cross my fingers. That doesn't have to be your reality when you have such a great tool at your hands. So many of my clients also have ADHD. And so I said, Hey, put that app. On your home screen notifications on give it a cute little you can change the color of the icon or like how it looks. And you know, that should be the first thing you see. They even have a widget for why now, which is cool. So it's like an extra big icon that can be on your front screen with like, I have my fun money front and center. Cause I always want to know, cause I just, there's a hole in my pocket for that. I just burn, burn a hole right through groceries, dining out. Like you can have a little preview of YNAB as a widget on the front of your phone, which is so cool. This past week, specifically me, I'm just telling myself here. I have not wanted to go look and update and reconcile my budget. I just haven't wanted to and then there's a stress point of like, well, are we at like, can we go out to eat? Because I don't know. I haven't checked and I'm going to have to go do all the checking and then I don't really want to, but I'm pretty sure, but I also don't know. So, yeah. You know, I've been doing this for quite some time and I still fall into that category. So I'm sitting here going fresh start sounds real good to me right now. Oh my gosh. And you know, with clients that we work with, you know, we see this a lot that then turns into avoidance or has always been the go to of like, ah, I don't want to look, so I'm going to avoid, and I just trust that everything's going to work out. And that gets us only so far, right? Like we're going to have that, Oh crap moment. And it's going to show up somehow in our life as like, Oh no, like I need to do something about it. Well, and I have the luxury of having been doing this for quite some time. That I have created the financial identity of being a person who budgets consistently. That is who I am is part of me. So I'm not going to go back to just swiping and praying. So I know that eventually I'm going to sit down probably tomorrow, sit down, reconcile everything, get everything back underway. But for those clients of ours that It's not their day to day, their identity or, you know, they're still shifting to create those habit changes and things. We definitely want to keep them from getting to that dark place of it's too scary to look. So I think tools like YNAB are absolutely fabulous. Thank you for coming in here and sharing, how this could be so beneficial to the people that maybe budgeting seems a little scary. The thing I think you were referencing, Laura, was the identity based habits from James Clear. When you start a new habit, you don't only want to just. put one foot in front of the other and get your reps in, it becomes a part of you. And when you can achieve that level of habit formation, it's not just something you're going to stop doing. So the question to ask yourself is what the person who is effective with their money management, who's getting ahead, who's reaching their goals. What does that person do? What do they say? What is their daily life? Look like and how, like, if once I can identify those things, then I can start practicing them in my own life. I assume this identity of someone who is responsible with money and an effective steward of my money. It's just who I want to become. No, I love that. I think that it's really important. I've been doing a lot of work on financial identity lately, actually have a podcast coming up in November on financial identity and how that affects us socioeconomically, which is something I've been starting up on. I think it's really, really interesting. So look forward to talking with the accelerators about that. But Cortney is there. Is there anything else that you would like to tell the people that are listening here that are looking to you know, they're building their financial future because they want to leave a legacy, something that's really important here. Is there something you'd like to say to them? Yeah, I mean, keeping that as the forefront, the focus at all times is so important. And knowing that, like, Budgeting is not the goal, right? Like the legacy, the impact all the lives that you want to touch, like that's the goal. And so when we talk about things like the budget and YNAB and tracking your expenses, that is just simply the vessel by which to get to all that so that you have more freedom and options in your life to then achieve the legacy that you want to see. That's awesome. Cortney, if people are. Looking to talk about this a little bit deeper. How can they get ahold of you? Yeah, you can find me online nwmoneycoaching. com. That's northwestmoneycoaching. com. I'm on Instagram, Cortney. covey. We can link it in the show notes, I'm sure. And if you are a business owner and interested in putting YNAB into play in your life and your business, I have a course called the Pay Yourself First Playbook. And I do teach YNAB in that course to business owners and bottle up all the financial coaching I do with business owners into a self paced course. So that is also available online. We definitely need to have you back to come talk about pay yourself first, because I know that you put a lot of time and effort into that. And I know that a lot of business owners pay themselves last, which is just silly. That's not how we should do things. You wouldn't allow anyone else, any other employer to pay you like that, like little to nothing, right? So why are we doing it to ourselves? Yes. I am very passionate about paying yourself first. What is one piece of your legacy that you were excited to leave to the next generation? I gave you no time to think about this very specifically. I'm excited for the legacy to be that financial stewardship can like effective stewardship can bless so many lives. So not loving money itself, but loving the impact that it can have for whether it's. People in our church, people in our family, like, causes that you're passionate about, but that it was never about the money itself, but that effective stewardship really can just change everything. You don't have to be rich to do that. That is absolutely true. It's amazing to me, the world we live in today, where people think you have to be rich to make an impact. And the truth of the matter is if you're acknowledging the people around you and you are loving them in the way that you can, you're making an impact so I love, I love that you have a desire to pass on to the next generation, good stewardship and impact as opposed to just money. That's a beautiful legacy that you're going to leave and I'm excited about it for you. Thanks. Thanks for having me on, Laura. All right. Well, accelerators, that's it for this week. You know what to do. Go out and make a difference.

Laura:

Thank you for investing your time with us today on the Accelerate Your Legacy podcast. Remember, your legacy isn't just measured in dollars and cents, but in the tools, habits, mindset, and reputation you leave behind. Don't just listen to the show, but take action on what you've learned. Share this wisdom with a friend who can benefit and help us spread the word by rating and reviewing the podcast. For questions or encouragement, reach out to me on Instagram at Accelerate Your Legacy or explore the resources listed in the show notes. I will be back with you next week. Until then, build your legacy with intention.