You Need A Budget or YNAB for short, is a viral online budgeting app that promises to help you regain control of your finances.
The app has millions of raving fans who swear by its functionality and effectiveness.
In this YNAB app review, we will investigate the pros and cons of using the popular budgeting app. We will discuss the various features in the app and how those features stack up against the competition.
What Is YNAB Exactly?
YNAB is a personal budgeting mobile and web-based application that was founded in 2004 by Jesse Mecham. The app grew out of Jesse’s own desire to develop a spreadsheet to manage his finances.
Considering how effective the spreadsheet was in helping him get his finances in order, he figured it might also be useful to others, so he decided to sell it online.
Jesse Mecham later decided to turn his spreadsheet into an application. The current YNAB5 is a result of several iterations of that initial application.
[READ: 36 Legit Ways For Teens To Make Money]How YNAB Works
The YNAB budget system is premised on four principles:
- 1. Give Every Dollar A Job
- 2. Embrace Your True Expenses
- 3. Watch that Age of Money grow
- 4. Age Your Money
1. Give Every Dollar A Job
This rule requires you to be purposeful in your spending by paying specific attention to what you use every single dollar for.
When you receive your paycheck, you’ll decide what it needs to do—whatever is most important to you. Then, instead of making impulsive purchases based on your mood, you’ll spend according to your budget.
[READ: Swagbucks Sign Up Code: Get A Free $10!]2. Embrace Your True Expenses
The rationale behind “embrace your true expenses” is that your monthly expenses may not be your “true expenses, ” especially if you have infrequent quarterly, bi-annual, or annual expenses.
The YNAB (You Need A Budget) app encourages you to make provision for those infrequent expenses by dividing the total cost into monthly chunks and setting the funds aside in your budget.
For example; assume you have a $3000 real estate tax to pay at the end of the year. YNAB wants you to set $250 aside every month so that at the end of the year, you’ll have the $3000 available to pay. The $250 you’re putting aside every month is part of your “true expenses”– so embrace it.
[READ: 22 Ways To Cut Cost, Save Money And Make Your Budget Work]3. Roll With The Punches
YNAB wants to hold you accountable for spending your money according to your budget. However, life happens, and sometimes we overspend. When that happens, don’t feel guilty, just “roll with the punches,” and adjust accordingly.
For example, if you budgeted $250 for groceries but ended up spending $300, it means you overspent by $50. YNAB encourages you to underspend in another category to offset the deficit — simple.
Budget overruns happen all the time, but with YNAB, you get to see, in real-time, exactly where you veered off course.
[READ: Letgo Review: How To Use The Letgo App To Sell Your Stuff]4. Age Your Money
One of YNAB’s objective is for members to cover their current expenses with their previous month’s paycheck. To achieve this, members will have to spend less than they earn consistently.
For example, if a member’s monthly income is $6,000, they should strive to spend $5,500 and save $500 every month. That way, within twelve months, they’ll have a $6,000 buffer in their account.
The goal is to spend money that’s at least 30 days old, rather than live paycheck to paycheck.
If you live paycheck to paycheck, using the YNAB “age your money” method can take you out of that rut.
The benefit of the “age your money” method is that it minimizes the stress of a financial mishap. You no longer teeter on the edge of a financial disaster if you miss a paycheck. If something happens, You’ll have at least 30 or more days of funds available to cover your expenses while you figure out your financial situation.
Below is how you develop a budget on the YNAB platform.
[READ: Swagbucks Sign Up Code: Get A Free $10!]How To Use YNAB: Developing A Budget
When you connect your source of financing — bank account, debit card, credit card–to the YNAB platform, the total amount of money in your account will be reflected in the “to be budgeted” section at the top.
You will then set up your categories as seen below and then allocate the budgeted amount to each category until the “to be budgeted” section is zero. That means every dollar now has a job, congratulations!
When you spend using your YNAB connected debit or credit card, the amount will be reflected in the “activity” section automatically, and the difference will be reflected in the “available” section.
For example, if you budget $250 for groceries, and spend $200. Fifty dollars will be reflected in the “available” section, as seen below.
Benefit Of Using The YNAB Budgeting Process
This form of budgeting is effective because it leaves no room for unplanned expenses. Every single dollar–to the last dime– is allotted for a specific purpose.
If you spend impulsively for any reason, that impulse purchase will be reflected clearly.
The YNAB process holds you accountable.
Budgeting To Zero: The YNAB Way
To have an effective budget that works, YNAB advocates that members budget their money down to the last cent –zero budgeting.
This method ensures that no money goes to waste.
YNAB Toolkit: Best YNAB Features
The YNAB app has a lot of sophisticated features, but we’ll discuss just a few of the ones that resonate with most members. Below are some of the new and improved features in the app.
Bank Syncing
This feature allows you to import transactions from your bank into YNAB. Though this feature was part of the YNAB Classic, it is now new and improved.
In the old YNAB Classis, you’d have to download the file from your bank, and then import it into YNAB. In the new YNAB5, you don’t have to download your files, YNAB does that for you in the background.
If you still prefer the old method of inputting your downloaded data, don’t worry, YNAB’s new file-based import makes the process even better.
[READ:12 Best Cashback Apps For Saving Money]Real-Time Updates
Because YNAB connects to your bank account, whenever you spend using your YNAB connected debit card, YNAB updates your budget in real-time.
The real-time update makes it easy to always know what’s going on with your finances and your budget.
Goal Tracking
Because reach certain financial goals are a huge part of why we budget, YNAB now has a feature for goal setting. This feature lets you set a financial goal and then tracks your progress towards achieving that goal.
For example, you want to save$7,000 for a Christmas vacation. All you have to do is set the goal in YNAB, and allocate money to it every month.
YNAB will continuously remind you about your goal and show how much progress you’re making.
[READ: How To Earn Money With Your Car]Detailed Reports
YNAB has a plethora of customizable reports — from statistical reports to charts and graphs– whatever your preferred method of analyzing reports, YNAB probably has it.
You can generate a spending report, net worth report, income vs. expense report, credit card refunds report, and much more in the YNAB app.
Why Is YNAB Different
YNAB is a proactive system that requires you to be forward-looking and intentional about every dollar.
The system also helps you migrate from living paycheck to paycheck to having at least 30 days of living expenses saved up.
YNAB Support
YNAB has a phenomenal support system, which explains why so many people prefer them over the competition. They have video tutorials on how to use the budgeting tools, a forum for sharing ideas, and live chat for one-on-one assistance.
The Pros Of YNAB
- YNAB’s Age Your Money rule helps members to stop living paycheck to paycheck and encourages them to save.
- The YNAB platform provides robust support to its members through its one-on-one video chats, members forum, and video tutorials.
- YNAB budget is innovative and easy to use. Members can generate a variety of reports to help them understand their finances.
- Real-time updates with bank syncing is a handy feature that makes the budgeting and tracking process easy.
The Cons Of YNAB
- At $11.99 per month, many people find YNAB to be a bit pricey, especially since many other budget apps, like Clarity Money, provide a similar service for free.
- YNAB does not have a bill pay feature. However, it does have a bill pay reminder, and if you pay your bill using a YNAB connected card, your payment will register in the app.
Is YNAB Worth It?
YNAB (You Need A Budget) can be very useful to someone struggling to manage their finances responsibly. For example, many people are in debt because of impulsive spending. YNAB’s point of ensuring zero budgeting makes members more thoughtful about how they spend their money.
Also, the feature that encourages members to spend money that’s at least 30 days old, when followed effectively, can remediate the problem of living paycheck to paycheck.
In my view, if you are having problems managing your finances, or you’re living paycheck to paycheck, or you want to save money for a goal, YNAB can be very helpful in putting you on the right track.
YNAB Cost
YNAB costs $11.99 a month at the moment. The previous version of the app was $6.99 monthly. Many people think a jump from $6.99 to $11.99 is drastic. However, in YNAB’s defense, they’ve significantly updated the app.
For example, the old version did not sync with your bank account. You had to download your bank file and upload it into YNAB. Not anymore. Now, you connect your bank with YNAB, and all your bank data gets transferred automatically. That’s a sophisticated API that probably cost a lot of money.
So though the YNAB app is pricey, you’re still getting value for money.
YNAB Student
YNAB student is a program that allows college students to use the YNAB app free of charge for one year.
To qualify for this program, students will have to show proof that you are a student. Typically, you’ll show your student ID, transcript, or tuition statement.
YNAB Alternative
While YNAB is an excellent app for budgeting, there are a few alternatives out there that provide similar functionality, and sometimes at lower prices. Below are a few of the most popular ones:
- Mint (free)
- Simplifi By Quicken ($3.33 /month)
- Clarity Money by Goldman Sachs (free)
- GoodBudget (free)
- Mvelopes ($6/month)
- Pocketguard ($3.99/month
- Wally ($1.99/month)
- Everydollar (free)
Bottom Line
YNAB (You Need A Budget) is an excellent app if you need to rein in your spending, save for a goal, or transition from living paycheck to paycheck.
While YNAB’s monthly subscription is a bit more expensive than many of its competitors, it does provide value for the price they charge. They have a wonderful community of millions of users, hundreds of free video tutorials, and live one-on-one video chats.
If you are in dire straits financially and need to rein in your expenses, YNAB may be a better option for you.
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