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businessentrepreneurship
Rule Four: First Principles | The Age of Desire
About this Episode
Mark and Jesse set their sights on Rule Four as they contemplate the first principles, or the foundational ideas, behind YNAB's Four Rules. Rule Four has evolved over the years from pay today's bills with last month's money to, simply, "age your money." But the age of money, while a useful statistic, can be confusing.
When you spend money on things that you've budgeted and saved diligently for, your age of money goes down. You are punished for doing the very thing that budgeting is for, in a sense. So while an increasing age of money is a good thing, it's not the point of budgeting. In fact, if you're age of money only increased, then you have missed the entire point of budgeting, which is to spend money on the things you value!
As Jesse puts it, age of money represents increasing options. But at some point increasing your options more and more (by accumulating more and more cash) becomes never making a decision. So, Jesse instead posits that the age of money is a separation between desire for something and fulfillment of that thing. By separating the desire from the spending, you become aware of your options and are thus better equipped to make good decisions. Age your money... age your desire!
Mark Butler, Virtual CFO
You Need a Budget
Hosts & Guests
No transcript available for this episode.
