Rule #3 of YNAB is "Prepare for Rain". What this means in a nutshell is that you need to budget aside money for both the expected and unexpected expenses of life that will occur. It's just a matter of time.

Since arriving in Bufferland I've found more time to look at the big picture of our budget and in doing so it brought me back to some ideas I had long ago in the days before YNAB. What I was thinking about was how we had various annual expenses such as car registration and instead of getting slapped around in our paycheck-to-paycheck existence then when they showed up “unexpectedly”, I figured out a plan.

It didn’t take a whole lot of guessing to know that annual car registration wasn’t some sort of State secret.

• We knew when it was due next. (the sticker on the car license plate helped remind us)
• We knew how much it would be. (what we paid last time was written right on the registration)

Armed with this information I set about hammering it out on a calculator. Since our only vehicle had an annual registration fee of about $200 at the time it worked out to an easy $3.846153 per week. Okay, just under $4 bucks per paycheck. “We can handle that Honey!” The problem was though that that was about as far as the plan ever got. I would work up all sorts of numbers happily tapping away figuring on 52 weeks or 4.33 weeks (your ‘average’ month) then write it all down only to lose interest and focus as our paycheck was drained in a matter of days each week and nothing changed.

Thanks to YNAB, that has all changed now. As the Cadillac of cash flow planning software, it made it easy to put a plan in place for our money and a way to track it to match the plan that just works. Now, armed with a full buffer, we have shed all stress over money and can now fine tune the overall budget with a clarity we didn’t think was possible.

With a bit of a surplus at hand this month I was looking over the budget trying to figure out where best to put the extra money. Yes, we still have debt but I didn’t want to just blindly throw it at the principal. Don’t get me wrong, we want to kill the debt but I simply wanted to look things over for a minute. It didn’t take long for me to find what I was looking for.

Times have changed and we now have 1 car, 1 minivan and a Class “C” motorhome. All three need to be registered and inspected annually. The thought that popped into my head was to gather the information needed, dates due and amounts, and get cracking on the calculator. The reason I hadn't done so in a while was due to inching our way into a buffer we had no long range plans other than that goal (Bufferland). In any case, it wasn’t long until I had the numbers I needed and figured out the amount where it now rests and grows in the “Registration & Inspection” Category in the Master Category group “Transportation”. The fun part was having to only divide by 12 since we operate on a month-to-month basis now that is far removed from “Rich on payday, broke on Monday” existence like we used to be.

The real focus in this predicted and expected rainstorm came when I realized we had to budget aside $46.04 per month just to meet those costs. “$50 bucks a month! Is it really that much?” I just never thought about it in the past and would simply pay the costs out of the paycheck at hand and move on.

There’s not much we can do about the monthly budget amount other than buy and run older vehicles, but that’s an article for another day. The key is that thanks to Rule #3 and our commitment to a plan, the money will be there when the registration comes due and we won't have to scramble to pay it. :)