You Need a Budget (YNAB for short) and Debt

We talk about debt at Cents of Time and you hear the word thrown around a lot. That is a bad, that it is good, some is good, some is bad, but rarely do you get to the why behind using debt. Why it isn’t aimed at your best interests and when things go wrong and emergencies happen, debt is something that hurts and hinders your options for choice and success. We are huge fans of the YNAB software and highly recommend the short 5-10 minute weekly podcasts that YNAB founder Jesse Mecham does. He did a four part series recently on why he does not like debt. He uses the word hate. That’s a strong word choice for something that is so normal and accepted. We wanted to post the links to all four episodes and give our take on each one.

Part 1- Why I Hate Debt: Cash- You can not give every dollar a job in your budget if you are using it to pay off things you have already purchased. It strips your cash flow so that when you have an emergency, you do not have the reserves to make it through that difficult time. When you have no debt you can focus on current interests/purchases and start planning for the future.

Part 2- Why I Hate Debt: Constraints & Creativity- Know your non-negotiables. Debt causes stress and forces you to make decisions you may not want to do. It makes the easy path too easy to take to get the short term satisfaction, but the long term consequences.

Debt is like tunnel vision. When you remove debt you can see the whole picture.
Photo by Paul Skorupskas on Unsplash

Part 3- Why I hate Debt: Cost of Opportunity- Debt carries a high opportunity cost. It also gives you little to no control over your situation. You are actually less likely to take risks with the more debt you have or even if you do in most cases you will just put yourself further into debt and more risk. Debt gets you into a lifestyle you think is normal. Debt blinds you to opportunity. Think of student loan debt. Some are able to pay off their debt right away, most don’t though and have to take jobs they do not want and do not pay enough to cover that debt. If you had no debt, you would be able to give yourself more options and wait for the right job or opportunity because you were not tied down to debt.

Part 4- The Corporations-  Jesse brings up a great point here talking about the credit card companies and the” game” they have created in terms of points and rewards. We did not create the system for the game, they did. Why would they create a losing system? Even if you do not pay interest they still get a percentage of your transaction swipe. So the more you use your credit card the more money they are making. Anything they get on top of that is extra and a majority of their profit. There is nothing wrong with banks trying to make a profit as Jesse points out, but debt affects so many aspects of peoples lives that for the few people that have it “figured out”, millions of Americans are losing the game and the credit card companies are winning.

While many Americans struggle living paycheck to paycheck and are saddled with debt, credit card companies are doing just fine.
Photo by Sean Pollock on Unsplash

For anyone that has an open mind on debt and wants to hear the other, unconventional side, that you should steer clear of it, we think this is a great start for some of the reasons to want to be debt free and stay debt free. We hope you take something out of these podcasts and at the very least consider a different way of thinking.

Subscribe to Start Learning About Your Time & Money!

* indicates required

Please select all the ways you would like to hear from Cents of Time:

You can unsubscribe at any time by clicking the link in the footer of our emails. For information about our privacy practices, please visit our website.

We use Mailchimp as our marketing platform. By clicking below to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. Learn more about Mailchimp’s privacy practices here.


  1. “Debt carries a high opportunity cost.” I don’t see this discussion about opportunity costs of debt. Good job for reminding us of what debt costs that is intangible, but very real.

    I found this about what how Warren Buffett viewed debt and thought it worth sharing.
    “Buffett’s conservatism stems from his awareness that the future is profoundly uncertain. “In financial markets, almost anything that can happen does happen,” he warns. “And it pays to conduct your affairs so that no matter how foolish other people get, you’re still around to play the game the next day.” At Berkshire Hathaway, he keeps tens of billions in cash for a rainy day. And he never invests borrowed money, observing: “Whenever a really bright person who has a lot of money goes broke, it’s because of leverage.”

    Even for Buffett, lasting success depends not just on talent, hard work and a scarily high I.Q., but on preparing for adversity. As he once put it: “Predicting rain doesn’t count. Building arks does.” ~Warren Buffett”

  2. I’ll give this a listen! Thanks for the quick overview of each.

    As you take on more debt, it decreases the amounts of risk you can take. You are bound to these payments every month, on top of other necessities like rent. You either need to increase your monthly earnings or only accept opportunities if they provide financial gain. That’s a hard spot to put yourself in and can create a lot of stress and dissatisfaction.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.