For those that do not know, YNAB, pronounced “why-nab” stands for You Need A Budget. YNAB, the brainchild of Jesse and Julie Mecham, started in September 2004. These four standard principles create the foundation of the budgeting system:
According to YNAB, following these four principles should help you better your finances. Here is a brief overview of the four principles straight from YNAB.
In the past, YNAB was a piece of software you would download on your computer. The New YNAB is browser based so you can access your budget from any computer. Also the company came out with a new mobile app that is amazing! The software helps you set goals, pay down debt, and keep track of your accounts in one place. See an overview of the awesome features here. YNAB works because it is based on a zero-based budget. You give every dollar a job whenever you have income. This allows you to stay in control of your finances.
My Experience with YNAB
I started using YNAB back in college around 2010-2011. That was back when it was a desktop application. First I added my banking and savings account. Then I created budget categories and allocated my (very small) funds.
Fast forward to now, 2017 I have a wife and a daughter. My wife Lexie and I tried YNAB after getting married but we took a break from it. Now three years later we are back using YNAB and the new mobile app makes budgeting such a breeze. To have any budget work in a relationship both people need to be 100% involved. Lexie can look up what we have left to spend in each category on her phone. I can be the nerd and look up reports from any computer.
Let Your Credit Cards Work For You Not The Other Way Around
Back in my college years I had two credit cards. One for emergencies and one to build credit. Managing credit cards is one of the main reasons I stopped using YNAB back in college. The system for handling debt was awkward and you got big nasty red bubbles if you carried the debt to the next month. The creators at YNAB took a second look at credit cards and now the process could not be easier.
To have any budget work in a relationship both people need to be 100% involved.
The new YNAB handles credit cards like I want it to. You add your credit card account and YNAB creates a special budget category for that account. If you pay your cards in full each month, like we do, you divide your money like normal and you use your credit card for purchases. YNAB deducts the amount from the appropriate budget categories but is smart enough to add that same amount to the credit card. Before using YNAB, when I would go to pay off the credit card each month, I knew I had enough in checking to cover the balance. Would that put me in the red if any bills hadn’t come out form checking yet? I would have to guess at the amount to pay on the balance as well. Oh $1500 looks like a nice round number and it covers most of the balance let’s go! With YNAB I now know for certain what amount I can put towards the credit card each month. Since YNAB tracks the funds I allocated to the budget categories I know I did not spend beyond my means. I know I can pay off the credit card balance. I can enjoy earning rewards from the credit card.Our ultimate goal is to have no credit cards but as we continue to build our credit they seem to be a necessary evil.
What About Mint or Goodbudget?
Yes, Mint and Goodbudget both have web and mobile based applications. Yes they both offer several different services and are a great way to get a handle on your finances. Both are relevant points but YNAB is the only one that has the technology to help you take charge of your finances. Mint allows you to track transactions and budget but it does so in a retroactive way. When I used Mint I still did not feel in control of my current financial situation. Mint is like a teacher that grades your homework with no explanation of how you can improve. YNAB walks you through various financial situations. The four principles help you endure financial roadblocks and setbacks.
YNAB is the only one that has the technology to help you take charge of your finances.
So You Are Saying I Should Give it A Try?
If you want to take better control of your financial situation it wouldn’t hurt. A budget system’s effectiveness is based on the user and if you like using it day-to-day. Yet, if you are new to budgeting or you hate to keep track of complicated spreadsheets YNAB is a great option. You can try YNAB for 34 days risk free and if it does not fit your financial workflow stop using it. Lexie and I both enjoy using it and I know you will too.
Ok, you know how once you’ve seen a Pixar movie, all other cartoon movies just kind of generally leave something to be desired? That’s kind of like YNAB and all other budgeting apps. Next level. You have to try it—you’ll never go back to living in the dark!
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