★ Rockstar Review: You Need A Budget (Killer Budgeting Software)

Posted January 17, 2017 6:00 am by with 10 comments

Price:
Free for 34 days, then $50/year

Reviewed by:
Rating:
5
On January 17, 2017
Last modified:June 19, 2017

Summary:

An awesome budgeting app that completely changes the way you think, and manage, your money. Highly recommend.

ynab review

This is part of our Rockstar Reviews series.
Be sure to check out all previous products we’ve reviewed!

ynab icon
rockstar rating 5 stars
Who it’s for: Anyone who would prefer a more hands-on approach to budgeting as opposed to a more passive approach (*cough* Mint *cough*).

Ease of use: Moderate learning curve to learn the YNAB way. Fortunately, there are plenty of resources (tutorials, guides, videos) to help you along the way.

What I like about it: It’s not just a budget program – it’s a way of life. The Four Rules of YNAB completely changed my attitude towards my money. A little hyperbolic but true.

What I don’t like about it: Rule #4: Age of Money is a bit more convoluted than previous versions of YNAB where the rule was to simply “Live on Last Month’s Income”. Some people will also not like that YNAB is set up to manually track your budget compared to the automation of other apps out there.

YouNeedaBudget.com || Free for 34 days, and then $50/year

(PS – On average they say new budgeters save $200 after month #1,
and over $3,300 by month #9.)

YNAB Completely Changed How I Think
About My Money

My name is Vic and in a previous life I hated budgeting. I used to think that budgets were restrictive, time-consuming and complicated. All I did in the past was look at my bank account balance and make sure we had enough money to pay the next bill.

While my wife and I made decent money and lived comfortably, there was never a sense that we were making any progress when it came to our finances.

That all changed when I discovered YNAB (You Need a Budget). To say that YNAB is simply a budget software would be an understatement. YNAB is built on a set of principles that not only shows you how to budget, but WHY you should even have a budget. The Four Rules of YNAB have completely changed how I think about money.

Rule #1: Give Every Dollar a Job

When you start your budget with YNAB, you assign every single dollar to a budget category. This includes necessities such as rent and utilities, to fun spending such as Netflix and my monthly WWE Network subscription (it’s true).  By following Rule #1, I’m able to save more, invest more and put more towards my daughter’s college education.

Rule #2: Embrace Your True Expenses

ynab irregular expenses screen

In the past, expenses that came up once or twice a year, such as taxes and insurance, often sent our finances into a tailspin. We didn’t save for unplanned expenses like big maintenance bills. Even though we knew these things always came up, we didn’t prepare for them. This often led to a lot of stress as we would be left scrambling to find enough money to pay for everything.

When you Embrace Your True Expenses, you treat these irregular expenses as a monthly budget item. Last Christmas, for example, we estimated we would spend about $1,200 for gifts, traveling and other holiday-related events. In January, we started saving $100 each month to account for this so we would be completely budgeted by Christmas.

However, at the end of December, we ended up spending about $1,600 on Christmas-related expenses, which leads to…

Rule #3: Roll with the Punches

Budgets are dynamic and can change every single day. Rolling with the punches gives us flexibility in our budget to move money around as our situation changes during the month. While being $400 over our Christmas budget definitely hurt, we simply adjusted. We pulled money from other categories and budgeted less money the next month to compensate.

Rule #4: Age Your Money

ynab - age of money

With the Age of Money, YNAB calculates how old your money is before you spend it to show how much of a financial cushion you actually have. The goal is to create a buffer in your accounts that’s at least 30 days old, which means you’re saving about a month’s worth of income before spending it. This allows you to stop living paycheck-to-paycheck. You’re no longer checking your bank balances before you pay a big bill. You just pay it. It’s pretty damn sweet.

Using YNAB

For all intents and purposes, YNAB is a glorified Excel spreadsheet. I say that as the highest compliment possible. As a data analyst at my day job, I spend 99.9% of my time staring at some pretty badass spreadsheets. I can SUMIFS and Index/Match with the best of them. ;)

So why would I happily fork over $50/year for something I can replicate?

Easy. YNAB has added so much value to our lives that I can afford to give up that extra latte each month.

Unlike an Excel spreadsheet, you don’t have to be tied to a computer (or a clunky spreadsheet app on your phone) to access your budget. I can view YNAB anytime, anywhere through its web app and phone apps. This allows my wife and I to be more active with our budget as we can view and update YNAB at a moment’s notice. There’s even a nifty Apple Watch app where you don’t even have to pull your phone out to check your budget! (Note to self: Budget for an Apple Watch.)

YNAB works for us because it is designed for you to manually enter each transaction. This creates a lot more awareness as we always have an idea of how much is in our budget. I’m a lot more mindful of our money so that we’re spending on what we value most. While people might think that this process might be a chore, it isn’t that bad. It only takes me a few moments to enter a transaction.

You’re actually encouraged to enter transactions on the spot, since the app will remember your location. So when I’m at Target, I can quickly fire up the app and all I have to do is enter is the amount. Everything else (store, account) will be pre-populated. It’s pretty sweet.

Managing Multiple Accounts

Whether you have one account, or twenty, YNAB doesn’t care. All your accounts (cash, checking, credit, savings, even gift cards) are consolidated into one “Budget Account” number. This makes managing multiple accounts easy as it teaches you to focus on your category balances, not your account balances. It comes in handy when you’re a travel hacker who currently has 24 active accounts! (Not a typo.)

The New and Improved YNAB

In December 2015, the new version of YNAB was released. For users of the old version (YNAB4) who are still on the fence, I highly recommend the upgrade. There are a few killer features that make YNAB better than ever:

The App is now web-based – You no longer have to download a separate program and link your Dropbox account to YNAB. This makes YNAB a lot more accessible as I can now view my budget anywhere.

ynab budgeting app screen

Direct Import – YNAB can now connect to your accounts and import your transactions. This makes reconciliation even easier as YNAB now matches your manually inputted transactions against your bank. Even though you could theoretically import every single transaction (which I wouldn’t recommend), YNAB does force you to review and approve every transaction so you are still an active participant in your budget.

[I think this one feature also helped improved my marriage! As much as I rave about YNAB, I still can’t get my wife to input transactions on a consistent basis. Direct import now captures all the transactions that my wife might not have entered, and I no longer have to bug her anymore to input them.]

Goals – While YNAB always encouraged you to Embrace Your True Expenses (Rule #2), they didn’t make it easy for you. In previous versions with future goals you would have to manually break down how much you need to save each month. With this new feature you simply put in the amount you want to save by what date, and YNAB will tell you each month how much to save to achieve that goal.

The one minor gripe I have about the new version of YNAB is Rule #4 (Age of Money). In previous versions this rule was “Live on Last Month’s Income” which is a lot more straightforward. Even in the current version, whenever I get income I just dump it into the next month’s budget. While I understand that the higher your AoM the better, this metric doesn’t really add that much more value vs. Living on Last Month’s Income.

How YNAB’s Changed My Life

vic family

Since we started using YNAB about 2 years ago, here were some of the things we were able to achieve:

  • Paid down $60,000 of principal on our mortgage
  • Maxed out our retirement accounts in 2016
  • Paid $19,000 in cash for a pre-owned Toyota Camry
  • Made home upgrades of about $3,000
  • Filled my 2-year-old’s 529 plan to $12,000
  • Filled my unborn son’s (due April 2017!) 529 plan to $1,200

That’s just the tip of the iceberg. My family has a lot more goals to achieve such as early retirement and traveling the world. Using YNAB has not just changed my finances, it’s changed my family’s life. The Four Rules have showed me that budgeting isn’t about what you can or can’t buy; it’s about living the life you want.

You can try YNAB free for 34 days here.

*****

When Vic is not nerding out about Budgeting, you can find him at home playing with Elsa and Moana dolls with his lovely daughter. Becoming a father has finally inspired Vic to become one with his finances so his family can live a better life. You can check out Vic’s random thoughts on his blog Dad is Cheap or reach him on Twitter @DadIsCheap.

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10 responses to ★ Rockstar Review: You Need A Budget (Killer Budgeting Software)

  1. Mrs. Picky Pincher January 17th, 2017 at 10:06 am

    I TOTALLY agree with the point about Mint. We tried it out but it wasn’t very granular and it was a little too automated for our liking. We came up with our own budgeting system since we’re Picky about how we track everything.

    Maybe I’m old-school with this, but I do think manual budgeting is crucial. It’s easy to sweep finances under the rug when you don’t have your finger on its pulse every day.

    Reply

    • Vic @ Dad is Cheap January 18th, 2017 at 1:39 am

      I tried Mint on and off for years. I’d pretty much just set it and forget about it. Didn’t really do too much for me.

      I totally agree about manual budgeting! Which is why I’m a Ynabber. Entering each transaction in my app lets me know how I’m doing in my budget :)

      Reply

  2. Mrs. ETT January 17th, 2017 at 2:45 pm

    I am a huge YNAB fangirl! I’ve always enjoyed budgeting, while Mr. ETT has never enjoyed it. YNAB is the tool that has encouraged him to participate at the very least, because the app makes it so easy. Now he has seen the benefits of budgeting for 12 months (yay for inbuilt reports and visualisation) he is even more on board. I did a series of posts where I broke down our budget in detail, then my most recent ones were using the YNAB reports to dissect our yearly spending (Unfortunately YNAB doesn’t yet reach out and close your wallet for you… yet.)

    The four rules have made it easier for me to talk to others about budgeting and their money as well. The phrases just roll off the tongue now.

    Reply

    • Vic @ Dad is Cheap January 18th, 2017 at 2:06 am

      Honestly, I wish my wife participated in it more! She understands the benefits and everything but would rather me handle the nitty gritty since I’m kind of a nerd about it. I used to get on her about entering transactions, but now with direct import I just wait for those transactions to appear :)

      I wish I could talk about The Four Rules more! The second I start getting nerdy about budgeting, most people’s eyes glaze over and I abruptly stop. Haha.

      Reply

  3. Making Your Money Matter January 17th, 2017 at 2:50 pm

    I can’t say enough good things about YNAB. Your savings numbers speak for themselves, and lots of others can relate similar success to tracking their expenses with YNAB.
    Some things that I love about it include:
    * zero-based budget: having to plan out where every dollar is going is eye-opening and it’s painful when you overspend to take that money out of another category.
    * importing: I don’t want to manually enter my transactions. It’s enough for me to just “approve” them in YNAB so I acknowledge that they exist.

    I like how the categories in rule 2 are set up with the due date and amount in the descriptions. Super great idea!

    Reply

    • Vic @ Dad is Cheap January 18th, 2017 at 2:13 am

      Yep! The whole zero based budgeting really helps show you what your true priorities are.

      I like importing for my wife’s transactions and my recurring transactions like utilities. For the rest I like manually entering. I’m just a nerd that checks his YNAB like 15 times a day. Sadly, I’m probably underestimating that number.

      Thanks! The categories w/ the due date and descriptions were an old YNAB4 thing since they didn’t have the goals feature. I like being able to see how much I have to spend in the upcoming months for these purchases :).

      Reply

  4. MStephens January 17th, 2017 at 5:02 pm

    I love YNAB!
    I give it a lot of credit for helping us actually start saving money because of how it gamified saving. When the buffer number is such a large beautiful green number staring at you, you feel compelled to make it bigger any way you can.
    It totally made end-of-month reconciliations more of a breeze.

    Reply

    • Vic @ Dad is Cheap January 18th, 2017 at 2:16 am

      I give YNAB all the credit in the world since that was the one program that just clicked as soon as I started using it :).

      While I love seeing that AoM pretty high, to me it doesn’t do THAT much for me. Knowing that I was a month ahead (plus the extra Rule #2 buffer) was enough for me. Seeing it too high just makes me think maybe I should invest some of my cash more.

      Reply

  5. Rhys Ludlow April 1st, 2017 at 5:07 pm

    I WAS a fan of YNAB but I feel like they just slapped me in the face! I have been using it for a few months. I finally had some data to work with and wanted to print it out. Guess what? NO PRINTING!! They instead suggest exporting your raw data. Dudes? I can get THAT from my bank without your “Help” I have cancelled my subscription and would warn others to AVOID!!
    Not allowing you to print your budget reports is stupid, arrogant (or both).

    Reply

    • J. Money April 3rd, 2017 at 4:52 pm

      Dang, sorry to hear :(

      I’ll pass your note to my contact over there and see if they get back to me on any of it. Maybe they have something in the works?

      Reply

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