You Need a Budget - Review

Kelsey and I have budgeted every month since January 2009. So, much has changed since those first few months: from simply figuring out where our money was going, to understanding our spending habits, to creating goals around paying off debt, and then in fact putting action steps in place to pay off our debt. And then adding not just one, but two small humans to our family has created a lot of material for this blog, and a lot of experience in creating and managing a budget. And for the first four (arguably the toughest) years of budgeting we used a simple budget Excel spreadsheet to manage our family budget, give regularly, and pay off our debt.

The spreadsheet worked well; had some technical disadvantages that came with being the dawn of  the smartphone and mobile apps, but we managed to create enough of a habit to stick to the process of budgeting. And it changed our lives.

The past four years, we’ve used a desktop application from You Need a Budget (YNAB). YNAB4 has been amazing. We’ve loved using it, (read my original YNAB review here). But, they’ve since retired the desktop application (no longer available) and have migrated to a web-based application.

Having recently made the switch to the new platform (we hung onto the old version until it was no longer supported), I wanted to provide review of the new-to-us You Need a Budget.


YNAB the Company

If this is the first you’ve heard of YNAB, let me tell you about my experience interacting with the company. They take budgeting very seriously, but make every attempt to ensure you have as pleasant of an experience budgeting as humanly possible. Quirkiness and fun shine throughout everything they do.

The YNAB team provides top-notch training of their software, a forum for answering your questions, and they’ve re-written a handful of pop songs replaced with lyrics about budgeting…

Seriously… check out the YNAB mixtape… It will have you YNAB-ING in no time.

YNAB Methodology

You Need a Budget is not just a web-application for tracking your dollars, it provides a thoughtful way of thinking about budgeting. This can create some challenges if you are new to budgeting, or have been through other personal finance programs (like Financial Peace University), and have learned to budget a particular way.

And, if you were a user of YNAB4 or an older version of YNAB, you’ll have to relearn their methodology as they have updated two of their four rules. Have no fear... the YNAB team provides world-class education to make sure you understand their budgeting application and get the most out of it.

Their method to budgeting has four simple and practical that force you to accept reality and deal with your budget problems before they get out of hand. Let’s look at the four rules…

  1. Give every dollar a job
  2. Embrace your true expenses
  3. Roll with the punches
  4. Age your money

The YNAB homepage will walk you through each of the four rules.

Technical Updates to the New YNAB

YNAB 4 (the version we started on) was a desktop download version, and was a huge leap in technology from our trusty free budget spreadsheet. We no longer had to hang onto receipts and track them into our spreadsheet once we arrived home. We could use the YNAB app to log the transaction as it happened and see an updated category balance on the spot.

This real-time feedback on category balances has helped us stay on budget  throughout the month.

The web-based application allows you to link your checking, savings, and credit card accounts for direct importing of transactions. You can still log your transactions manually as they happen and then once the transactions are imported from your bank, YNAB will match them up to what you have already entered.

Concerns After Brief Use

  • Delay in Transaction data: It takes at least an extra day before our bank transactions import. We continue to log our transactions manually so our budget stays up-to-date.
  • Carry-forward category balances: As part of the new method, you are no longer able to carry forward a negative balance within a particular category. YNAB takes money from the next month’s “to be budgeted” to shore up each individual category.
  • Income for next month: All income simply goes into the “to be budgeted” pot and then you budget from there. This helps figure your “Age of Money” number. I don’t find this rule to be as simple as “live on last month’s income,” but it’s growing on me.

What I Love About the New YNAB

  • Search: I love a good search. We use the memo field as much as we can to help us recall details later. The search feature works really well when we are trying to dig up old budget data. It’s extremely helpful when it comes to tax time.
  • Reports: Income v Expenses is a solid report to help figure average spending, and bottom line budget margin.
  • 34 day free trial: YNAB offers a 34 day free trial. Just enough time to try the application for a month, and a few extra days to decide if you want to make it a long-term relationship. I think if you stick with it for that long, you’ll be happy to make the long-term commitment.

Check out You Need a Budget!

There are referral links in this post. If you end up purchasing YNAB, I may be compensated.All opinions are my own. We use and love YNAB and hence love sharing this resource with you as well. If you don’t want to pay for a budgeting application, check out the free budget spreadsheet.