A while back I decided to create a comparison post for money management software to highlight the many options available, but to also do some exploring myself. I had heard about YNAB (You Need a Budget) from reading reviews from other bloggers and decided to download it (it was desktop software at the time). I fell in love with it and stopped using our current software within a week and set up our budget in YNAB.
Why? I found it super easy to use and it supported the envelope budgeting method my wife and I use to manage our money. Quickly, envelope budgeting (putting money in envelopes or categories), is what I refer to as proactively managing your money. It’s creating a plan for your money before you spend it. Some software tracks everything you do but it’s a look at your money in the rear view mirror. With YNAB, you give every dollar a job at the beginning of the month and do your best to follow your plan.
Fast forward, here I am today and I want to provide you a quick overview of the features with YNAB I use to manage our household finances. There are many, so I’ll just highlight a few for you and then recommend you explore more with their free 34 day trial.
I already mentioned this feature but YNAB makes it super easy to enter your budget for various spending categories. You can create custom categories, but overall, the idea is to set up your budget before the month begins. By the way, your budget starts over each month so you’re always budgeting one month at a time. If you don’t spend all your money in a category, it carries forward to the next month.
I’m not talking about moving money between bank accounts. I’m talking about moving money between categories. Your budget will never be perfect. It’s only a plan and you may spend more than planned on certain categories any given month as life happens. YNAB let’s you transfer money from one category to another so you can keep your budget in balance. It’s a no-brainer but a must-have for envelope budgeting software.
Some budgeting software does all of the above but there is no way to keep your budget in balance with your checking account. I want to know the balance of my checking account so that I can be 100% accurate with how much money I have to budget. YNAB supports this in that each transaction is entered into an account register, just like a checkbook. You can easily reconcile what’s cleared in YNAB with your bank’s checking account balance. Bingo!
YNAB is now on the web which means you can access it from anywhere. There are apps for your smart phone or tablet which makes it even more convenient. Again, YNAB used to be desktop based software but they’ve graduated like so many others to an online service.
Syncs with Your Bank
The last feature I want to highlight is that YNAB syncs with your bank account. This means that your transactions download from your checking, savings or credit card accounts and you easily assign them to the appropriate spending categories.
I’m a fan, yes, but there isn’t any reporting (yet). The desktop version had some great visual reporting and I think we just have to patiently wait for these features to make it to the web version. I’m not big into analytics but it is nice to see how much you’ve spent in any given category over the last year.
YNAB is offered at a very reasonable price at $5 per month or $50 per year after your 34 day trial. Yes, many products out there are provided for free. The trade-off is advertising and special offers within, or a reduced set of features for the free version.
YNAB is not a complete picture of your finances (debt, assets, etc.) Again, it’s budgeting software so you won’t see a dashboard view of your financial world like you do with Mint.com or Personal Capital. Some people like this capability so I would say sign up for one of those free products to see all of your accounts integrated, but I still recommend YNAB for budgeting.
YNAB is reasonably priced and provides all of the budgeting features I need to confidently manage our household finances. There is little to say for improvements. You get a lot of value at a very reasonable price.
Start a free trial of YNAB.