Podcast #157: When You’re Spending More Than You Bring In, the one in which Jesse tells us what gets him really fired up at a dinner party.

This episode aired February 2, 2015.

Hello YNABers.My name is Jesse Mecham and this is podcast number 157 for You Need A Budget, where we teach you four rules to help you stop living paycheck to paycheck, get out of debt and save more money.

This is a situation where you’re spending more money than you bring in — you’re in the red. Business is operating at a loss, and you question the wisdom of budgeting. You feel like it might be futile. And it’s not.

If there’s any moment where a budget is most important — I’m not allowed to say it’s always important, though it is — but if there’s any moment where it’s more important than other moment, it is when you’re operating at a loss. If you’re a student in college — by the way, we give you our software for free while you’re in school — and you are having to borrow money and spend that borrowed money and not earn much income, you’re operating at a loss. And a lot of people just toss up their hands — my mother-in-law included — and say, “Hey, I know I spend more than I take in, so it just is what it is. A budget doesn’t help with that problem and that’s the end of that.” And this drives me crazy.

When you are operating in the red, that is the time where the budget really shines; that is the time where you tighten the belt; that’s the time where you really have to buckle down. If I were operating a business at a loss, I wouldn’t be spending money willy-nilly and thinking that I have this mental math going on in my head that’s actually accurate — it’s not.

There are a few things that set me off. One is when people say, “I know I’m spending more money than I bring in, therefore I don’t need a budget.” Another one is when they say, “I already know what I spend, therefore I don’t need a budget.” The third one that really sets me off is when people say, “I don’t spend money.” Those three will get me fired up at your dinner party.

Just know, if you’re in one of those tight spots right now, probably temporarily, just know that now is when you dig in deeper with your budget — make it your right-hand man and just be buddies with it. Live with it and stick to it and mess around with it and make it your plan and stretch every dollar as far as you possibly can.

Until next time, follow YNAB’s four rules and you will win financially. You have not budgeted like this.

Learn how to stop living paycheck to paycheck, get out of debt and save more money faster – subscribe to the You Need A Budget podcast today!