Track Your Money (Part 2): YNAB

Remember how I said Grumpus Brotherus had used You Need A Budget (YNAB) for years?  Well, when I asked him to write a paragraph for my Track Your Money post, he sent an entire post’s worth of information back.  Instead of editing the material down to a paragraph to fit my article, I decided to give him his own post.  I present you here the first guest author for the Grumpus Maximus blog!  Now I must warn you that Grumpus Brotherus is a nerd … I mean N-E-R-D.   Which is ok these days since the nerds will apparently inherit the Earth.  But at points within the article, he does geeks out on software

I can’t believe Brother Grumpus does this since ..

interface and whatnot.   It is hard to believe he flies in fighter jets for a living.  Although I guess jets are more software than hardware these days, so maybe it makes sense.  In any case, I edited a little to de-nerd it for us ‘laypeople’, but otherwise all the themes are his own; completely unprompted by me …. you will see what I mean.  Enjoy.  — Grumpus Maximus

He looks like this …

YNAB Review

I have been using YNAB almost daily for two and a half years.  Bottom Line Up Front (BLUF – as we say in the military):  it has “saved” me literally thousands of dollars that would have otherwise not had a job, which is one of the tenants of YNAB.  I won’t rehash the entire YNAB culture but I will compare it to it’s nearest (and free) competitor Mint …  While Mint is very good at certain things, YNAB is definitely geared toward the day-to-day average consumer who wants to get their spending in order quickly, potentially for an entire household.

There are a couple of things new users should know:

1) YNAB 4 (mobile app now labeled YNAB Classic) was the last version of a flat-rate, download and own piece of software.  Like most developers nowadays, they have moved to a subscription based model.  The old version is no longer available.  There is a full-featured trial period, an entire year if you are a student, however ultimately you will end up paying if you keep using it.  And before the haterade (as the kids say) starts with the Micro$oft this and Adobe that: chill out.  It’s only $50/yr or $5/mo.  If you refer friends, of course, you start earning discounts.  Groovy!

2)  YNAB is now a web app.  There are mobile versions available that sync across platforms for all major operating systems, and it works in any mainstream browser.  The mobile versions vary in their stability (I’ve used them all), but in general work very well.  They won’t really be a part of this review, just know that if you become a user / multi-user household, such as us, you’ll be able to keep your data synced no matter what platform you are on.  Mint can do this as well, I believe …  The full web layout doesn’t really work that well on phone screens but is OK on tablets.

Before I move on to the goods, a disclaimer:  my spouse and I were largely responsible and financially savvy prior to becoming YNAB users, so there is some “slant” (try 1:09 into the clip) to this write-up.  We planned ahead using Microsoft Money in the old days, always paid off our credit cards each month (excepting the rare military move where we weren’t reimbursed immediately), and have very little debt (a couple of hundred bucks remaining on a ridiculously low-interest car payment…0.39%).  We used YNAB as a buffer-builder and efficiency enhancer.  Consider our perspective when reading the following.

Goods:

  • THE COMMUNITY. This goes first in caps because honestly, it’s ridiculous.  YNAB offers an unprecedented amount of free budgeting advice on their website.  And if you don’t find what you’re looking for there, the forums will surely have an answer.  And they give classes … for free.  Oh, and the developers (devs) prowl around the forums too.  Yeah, it’s that good.  If you are just starting to get your financial life in order, this is honestly the most user-friendly place to start.  Someone WILL have an answer to your question or be able to help you out.
  • User Interface. Some folks have griped about the web app layout, but honestly, I haven’t had any issues.  It’s very easy to get around to what you need.  Entering transactions manually is a snap.  There’s a tiny bit of lag akin to using a GoogleApps spreadsheet, but largely it’s solid.  Additionally, compatibility is high.  I was able to access it from a junky Internet Explorer Nine Versions Ago from the Middle East, so you can too.
  • The mobile apps. If you’re in a multi-user household and your spouse/life partner / MOG (half-man half-dog) best friend is going to forget to enter their cash transactions, then this will definitely help.  My spouse has no problems using the Android mobile version, and she’s not a tech savvy person.  I’ll cover the one negative about these below.
  • There was a big stink when they added these, with people saying they became “disconnected” from their spending with the auto-downloads.  It just makes life easier.  You can still enter everything manually if you want.  Mint is the same way if I remember correctly.
  • Split transactions.  Most other budgeting software can do this, but there is a pretty nifty split transaction manager so you can keep that nebulous $100.00 Target transaction from going uncategorized.
  • The Savings.  I saved the best for last.  If you were a person living on credit float, credit card debt, or paycheck to paycheck and you want to get fixed; this is one tool you can use to do that.  I’ll caveat that with the “you have to want to get your financial life in order” soapbox.
    • Quick sidetrack:  my spouse recommended YNAB to a friend at work who, despite being a well-paid dual-income family, was living paycheck-to-paycheck and just surviving the mortgage.  They started using YNAB, quickly became depressed at the numbers they were seeing, and quit.
    • This is America.  Some people don’t like what they see when they stick their head above the surface of the Debt Pool and want to go back to swimming in the deep end.  Don’t say I didn’t warn you. (**Please note Grumpus Maximus is an Amazon affiliate.  See more information in disclosures**)

The Others:

  • The subscription. Covered above.  You can technically use free tools to do all of this, though it will probably take a lot of tech savvy, person-hours and not look as pretty.  And the mobile sync thing would be a pain.  I guess you could do it with Dropbox or some other cloud-storage system, but frankly, that sounds terrible.
  • Age of Money.  Oh yeah.  This will get the forum folks fired up.  YNAB decided to replace their old “rating” system on how you were doing (which was basically just showing you inflow vs. outflow) with this Age of Money concept.  No, it’s not a new Real Time Strategy game for PC.  Long story short: it tells you how old the dollars you are spending are.  It’s basically worthless.  I just ignore it and let the haters hate on it.
  • YNAB is not a replacement for Personal Capital.  Seriously don’t even bother using YNAB to track investments.  There are much better free tools out there to do that.  It’s really for day-to-day spending management.
  • Mobile apps aren’t full featured.  The mobile apps let you enter and view transactions, but they’re not full-featured budget management apps unlike some others out there.  I encourage my spouse to simply use them to enter transactions at Point of Sale (particularly cash, which is hard to track) and then move on.  I’m on the browser-based version all of the time, anyway.  Top Tip:  Create an account called “Cash” under the “Cash” account-type.  Your wallet will thank me later.
  • Credit card rewards aren’t intuitive. You have to enter numbers in the negative when you get cash rewards / return things into the Credit Card Payment category.  It’s the biggest thing that’s bothering me right now.  Consult the website and forums for more.
  • Can’t adjust column size on the web app. This one is apparently being worked on.  Although that was a year ago.  Tricky to make this work in every browser, I suspect.  The devs were once upon a time working on an updated desktop app, but I think that fell by the wayside.  I honestly lost interest in those threads.

Some administrivia:

  • Category creation is easy to get carried away with.  I streamlined my categories recently: Monthly Bills (recurring payments of steady amounts), True Expenses (unavoidable payments of sometimes fluctuating things like food), Priority Expenses (things like clothes that you want to plan a little bit ahead for), Optional Expenses (restaurants and that on-sale game on Steam that I absolutely must have), Spending Targets (vacation and other targeted goals), Work Related Expenses, Contingencies (medical co-pays), Financial Savings (cash buffer, IRAs, etc.) and finally debt (just that small car payment remaining).

YNAB can help you get out of debt and get off of the credit float.  But you have to follow the rules it lays out for you.  Honestly, there are lots of ways to do this that don’t cost $5 a month, but they aren’t packaged up as nicely and don’t include the wonderful self-contained method and community.  They all require discipline to be effective, though.  I encourage existing fiscally responsible folks to try it as well, just for the increase in efficiency that it may bestow upon your bookkeeping in order to turbo-charge your savings.  That’s what it did for us.  For the rest of you:  try it.  For 34 days you have absolutely nothing to lose.  And it may just change your life for the better.

Let me know what you think!