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My Thoughts on YNAB
I have been a Mint.com user for many years. I wouldn’t say that I had a budgeting problem, but I have always been addicted to statistics, and being able to see all of my financial information in front of me was, and still is, very appealing.
You Need A Budget, referred to as YNAB from here on out, was something I frequently saw mentioned online when discussing budgeting strategies. As an obsessive spreadsheet user, I dismissed it over the years mainly because of the price. I told myself that I could just make my own spreadsheet if I really wanted to budget in the way that YNAB promotes. And truthfully, it could probably be done with some time; though the final result wouldn’t look as polished. In fact, YNAB actually started out as a spreadsheet.
Since YNAB version 4 is the first version I have used, my impression may have been much better than if I started earlier as many new features have been added (or so I read).
Setting up YNAB is pretty simple. You add all of your accounts and tell YNAB the current balance in each. This is the first very big departure from how Mint handles things. The account balances and transactions are not automatically pulled in from your various financial institutions. This was originally another big reason that I never wanted to try YNAB; it takes more work to maintain. In retrospect, that’s a rather odd stance to take as the more involved you are in your budgeting, the more likely you are to stay on top of your spending.
The first thing that I knew I would really like is the rollover budgets. Now, Mint allows something like this, but I never used it because if you want to go back and reallocate leftover funds from a specific category, you can’t. In YNAB, reallocating from category-to-category is one of the main strategies of keeping your budgets in line. If you had some extra money from your “Grocery” budget in the previous month, you could move that over to your “Home” budget for the current month by simply adjusting the balances. I know this is something that I will be using a lot as I get further into my YNAB budgeting.
Planning for a trip that’s several months or even years away? You can start allocating money little-by-little to that part of your budget and be ready to drop the large sum when the time comes without worrying how it will affect your finances…because you already know!
What I’m Worried About
I’m pretty confident that I will be using YNAB for the foreseeable future. Knowing this, there is still one thing that I know I will have to be vigilant about doing…
YNAB requires you to enter each transaction that affects your budget. I saw that it does have some import features for .csv or similar filetypes that you can get from your bank. I personally will not be using that feature as it seems more difficult than just entering the transactions as they happen.
The mobile app makes this pretty easy, so long as you enter transactions as they happen. Even still, if you go back at the end of the day and enter the transactions (you can look them up through the online portals of your credit card companies; most will show up in the “Pending” list after less than a minute).
I want to make it clear that I will not stop using Mint. It is an incredible tool for aggregating all of your accounts together into one place. I find that it still has value, even if someone were to use YNAB as their main budgeting platform.
YNAB provides an abundance of learning tools in order to get you to use their software to its fullest potential. Click here to go to YNAB’s education page
If you’ve looked at the featured image at the top of the page, you can see that I’ve only used YNAB for January so far. You can still see the rollover balances being applied for the future months; it’s weird being excited for February to come so I can start budgeting that month!
The ultimate goal of YNAB is to show you using “last month’s income for this month’s budget”. Eventually, you can hopefully go even further and use, for example, income in March to cover your budget for May and beyond.
I am glad that I decided to finally try YNAB, and I think that it can be a big help for people, even if you don’t find yourself in a budgeting crisis. People who are on top of their finances, I believe, will still find great value in YNAB. Visualizing your spending helps put things into perspective, and if you are obsessed with statistics, like I am, it can even be fun!
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