EVERYONE needs a budget. Yes, that means you.
Today I’m not only discussing why YOU need a budget, but “Why YNAB:” why I love the You Need a Budget (or YNAB for short) software and app.
YNAB named their software this because they believe everyone needs a budget, whether you have $1 or $100 million to your name and I 100% agree.. Here’s why.
Why You Need A Budget
Have you ever had a hundred things on your to-do list and only a few hours to do them? And you end up feeling so overwhelmed and just lay in bed and do nothing? I think we all have.
We all know time = money, but also think about your money as time for a minute. There are literally infinite ways to spend each individual dollar you bring in. Pay off debt, buy groceries, give to charity, help a friend, eat out, buy a glass of wine, buy clothes for your kids, gamble, shop online… I could go on and on all day.
Budgeting is the process of making a plan for your money.
In the same way that planning a very busy day makes it more manageable (and productive, helping you avoid a netflix binge,) when your money is planned it can do so much more for you.
Some people break into a cold sweat when they hear the word “budget” because they think it’s restricting, but it’s really the opposite. Budgeting gives you permission to spend guilt-free on the things you have prioritized.
My Budgeting Story
You might think that since I’m an accountant budgeting came easy to me, but that’s not the case. Sadly, even most accountants are not taught personal finance.
I started budgeting a few years after college using mint, but it wasn’t working from me. So much of it was done in hindsight. We would overspend in several categories (always eating out for one) and think “we’ll do better this month!” and then forget about it for a month, rinse and repeat.
Then I started using YNAB.
I stumbled upon it shortly after getting married, around 2016. I devoured all of the free educational content and live webinars (more about these later.) I learned about the 4 Rules (below), and soon discovered we were riding the “credit card float,” or using this month’s paycheck to pay off last month’s credit card. I was paying it off in full each month and not carrying a balance, but I had to overcome this in order to move closer to Rule 4: which is using last month’s income to live off this month.
Why YNAB
You Need a Budget (or YNAB for short, pronounced “why-nab”) changed my budgeting life.
There are so many features I love, but here are my favorites:
- Education: I’ll be the first to admit there’s a bit of a learning curve with YNAB. I started off with the free live webinars, which I love because you can chat with a real instructor and ask your questions right there. I’m all about a classroom setting so this is my preferred way to learn.
- Bank feed integrations: this is a must because it saves SO MUCH TIME. I log in 2-3 times/week and import new transactions, and it takes only a couple of minutes to reconcile each account and know exactly how we’re doing.
- Cashless: You can think of YNAB as a digital envelope system. You budget every single dollar you bring in, and have multiple categories. You can check the budget and know exactly how much you can spend at the grocery store. But the fact it’s digital is great for 2 reasons: 1. covid and 2. you can utilize credit card rewards (use these responsibly, of course, pretending it’s a debit card and only spending what you can pay off each month.)
- App: The app is wonderful and syncs between users, so my husband or I can easily see where we stand.
- New widget feature: YNAB just rolled out a widget feature for the iphone. So if there’s a category you often overspend from impulse purchases (hello eating out), you can have your balance show up right there on your home screen!
- Short cuts: This is one I need to dig into further because I know I’m not taking full advantage. There are features such as “quick budget” to set all the categories to the amounts you budgeted last month, and an option to easily cover overspending with another category when you need to Roll With the Punches (Rule 3.)
- It’s pretty: I’m not ashamed to say I am a sucker for packaging and pretty user interfaces, and YNAB does an amazing job at this. It’s clean looking without being too professional and boring, and they have done a great job branding their website and educational content.
YNAB’S 4 Rules
These are the bread and butter of using the YNAB software. Visit their article to learn more, but here’s the basics:
- “Rule 1: Give Every Dollar a Job
- Rule 2: Embrace Your True Expenses
- Rule 3: Roll With the Punches
- Rule 4: Age Your Money”
The Cost
YNAB costs $11.99 a month, or $84 a year. I personally pay for the year subscription for the savings. There’s a 34 day free trial, and if you sign up using my link you get one month for free (and I do as well.) I only promote products and services I personally use, and this is one of my favorites considering I’ve been using it for over 5 years. 🙂
Your Turn
Do you have a budget? If so, what software do you use, or are you a paper budgeter? Leave a comment!
