I Am In Love… With My Budgeting Software

My Review of You Need a Budget

I want to make this very clear: I had no desire to own budgeting software. I didn’t even have a desire to budget! The idea always seemed so restrictive. Besides, there never seemed to be a “normal” month, so how would I ever correctly “guess” how much to allot to each category?

Nevertheless, I had felt a pull for years to “get a handle” on our finances. We have never carried any consumer debt and generally try to be careful with our spending, but we also never had that much to spend. πŸ™‚ With Scott becoming a full-fledged doctor this year, we want to save a large portion of his income and I wanted to be sure that our spending didn’t just silently increase in proportion to what he brought in.

For years I had bounced between mint.com, yodlee.com, and my own spreadsheets trying to figure out how to track our spending in a meaningful way and catch any errant charges on our credit cards. It was always a dreaded task. Invariably some account had issues importing or needed new security questions. Tracking cash was tricky. I never felt like I had a “real-time” view of where we stood because the credit cards have different billing cycles and we pay some bills yearly, some monthly, Scott’s paychecks were bi-weekly, and we always had business expenses waiting to be reimbursed. The issues were myriad and crippling for me. I’d go months avoiding it (a sure sign my system was not working for me) with receipts piling up and finally talk myself into hammering away for several hours, only to come away with a fuzzy understanding of our past spending and current financial standing.

Then I found You Need a Budget and within 10 minutes of looking at their site I was head-over-heels in love. It was *exactly* what I always knew I wanted but never quite understood how to achieve. 10 minutes after downloading the free trial, I was grinning ear to ear.

It’s been three months and I can honestly say, I love managing our finances now. We are saving much more money, and have been able to confidently weather some large, unexpected expenses (like a hospital stay!)

10 Reasons Why You Need a Budget (YNAB) Rocks My Socks Off

  1. Every dollar gets a job.

    This is a simple concept but so powerful. If I spend less on groceries, I choose where to put those dollars. Since using YNAB I’m so much more frugal and so much happier about it!

    Because Scott and I have a vision of where we want to be (in terms of long-term savings, working towards buying a second car, and owning a vacuum cleaner that isn’t awful)… every dollar we can put towards those goals is a win and I get to see them pile up (however slowly) in YNAB in a very real way. THIS is the reason budgeting is awesome! I’m now fired up about finances instead of dreading them.

  2. It gives me a real-time picture of our finances.

    Because of the way it treats all accounts (and cash), the billing cycle of credit cards is irrelevant. Future income isn’t “counted” until it’s in your bank account so you have very concrete view of exactly how you’re doing. I didn’t even realize I was riding the credit card float but I’m glad I fixed that!

  3. It’s fast to learn, and fast to use.

    I take < 1 minute to enter a transaction on the app on my phone when I leave the grocery store and then I get to recycle the receipt. Done.

    Or, at the end of the day I take 5 minutes and log any transactions from the day (or past few days) on my computer. Upkeep is nearly pain-free.

  4. It makes me so much more accountable.

    Rather than just passively categorizing prior transactions (like I did on mint.com), often weeks after-the-fact, with YNAB I’m actually logging everything I spend. It’s incredibly quick to do so (in fact, quicker than trying to recall some olde crusty charge), but it caused a big mental shift for me in how I approach spending money.

    I’m sure that some people would shy away YNAB because of this manual logging, but it turns out to be a deal-maker for me. This is an easy process in YNAB and it’s absolutely critical for me to “own” my spending. Besides, because the online solutions I found which auto-imported weren’t a great fit for me, I was manually logging into a spreadsheet anyway and it was awful.

    (You can import statements into YNAB to reconcile accounts more quickly, but I haven’t found this to be necessary.)

  5. I no longer dread credit card bills.

    Fortunately, we’ve always paid off every bill in full, but I still used to hold my breath as I looked at the “bottom line” on any credit card bill. Although I knew that even essential things like groceries and gas add up, it was always hard to see a big number on the bill. Each time I’d either breathe a sigh of relief or emit a small groan depending on the damage.

    Now? I “own” every transaction as it happens and anything on the statement is already taken into account with my current financial picture. So the bottom line on a statement is simply reflective of when the billing cycle happened to end. It is no longer a commentary on my overall spending habits and it’s no longer a source of angst (or a hollow source of self-congratulation).

  6. It is effortless to plan for expected expenses (and the unexpected).

    I simply set up my goals for saving towards future expenses ($XX/month for Christmas, $XX/month for dental, etc.) and it carries forward everything so that when that expense rolls around there’s a nice chunk of change ready and waiting for it.

    This is one of the core tenants of budgeting but it always so much work to do on a spreadsheet that I generally skipped it, to be honest. It seemed easier just to wing every month and hope that the big expenses were spread out so they could be absorbed when they came up. πŸ™‚

    And, as I mentioned, this had worked in the past for us. But it is so empowering to proactively prepare for future expenses. It’s much easier with YNAB and it allows me to keep track of a simple category (kid’s clothing) with zero thought or effort on my own. I just pick a number I think is reasonable for the year, divide it by 12 and it’ll sock that much away every month. So when there’s a great sale, I know what I’ve set aside to work with (and I can still go over that amount, but it means pulling from another category. Those dollars have to come from somewhere!). I also know that if I find a better deal at a thrift store, or hold off on purchasing something entirely, I get to put those same dollars towards something meaningful (See #1).

    Because it’s so easy, I can add lots of granularity and see, for example, our monthly diaper costs. That led to potty-training Caitlyn in a hurry! Now I get to put those dollars somewhere else. πŸ™‚

  7. It has all the fancy charts and number-crunching built in.

    This is super useful to show my husband at a glance how well we’re doing at achieving our financial goals, and it required jumping through additional hoops in my spreadsheets to make anything visual and meaningful.

  8. My budget is now completely flexible, making it much more useful

    I don’t have to magically anticipate how much I’m going to spend in each category in a given month. I just make an educated guess and tweak as I go. I effortlessly move dollars from one category to another as life happens. Every month I’m tweaking less as I learn more about what’s reasonable for our family. Here again, it was possible to do this with my spreadsheets in theory but so laborious in practice that I was more likely to just declare the budget blown for the month!

  9. The YNAB people are fun.

    The tutorials are engaging, to the point, and helpful. The employees have a sense of humor about budgeting being typically a boring, decidedly unfun activity and they keep things upbeat and positive.

  10. It’s not free.

    Maybe I should have put this first because I know it would be a turn-off for many people (and it almost was for me). Aside from the fact that it’s unquestionably worth the money, I believe that paying for a great service is good for the world and good for you.

    After working for years for SmugMug, a wonderful (and subscription-based) photo-sharing service, I recognize how invested each employee is in dazzling customers. We don’t have to sprinkle ads everywhere or push people to buy prints. We just provide a valuable service with excellence and it’s worth every penny. I feel the same way about YNAB. It’s also a one-time fee, not a subscription, which makes it easier to swallow.

    I know I’ve easily saved more than the $60 cost though already, by using it just these three months. If you decide to give it a try, use this link* to give it a try and save $6 if you decide to buy it.

Disclaimer: I do get a kickback if you end up buying YNAB by clicking the links from this post, but my sole motivation for writing this is to offer a lifeline to anyone else who may be in the same awful budgeting boat I was in! πŸ™‚

I’d be happy to answer any questions about our experience I can. And by all means, if you’re in love with your budgeting method/software as well, give it a shout-out below.

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About beanland

Scott is a family practice doctor and Anne is a full-time mother and teacher to three beautiful girls and one boy.
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4 Responses to I Am In Love… With My Budgeting Software

  1. Hi Anne –

    Thank for all the kind words about YNAB! Glad you’re working it, and glad it’s working for you. Out of curiosity, how’d you hear about us?

    Mark

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  2. Lonica says:

    Anne, I’ve transferred over to a cash budget. Essentially it sounds like it functions similarly to this. Have you ever tried a cash budget? How does YNAB compare to that?

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    • beanland says:

      Hmm is a “cash budget” the same as an envelope system? Where essentially you pull everything out in cash and divvy it up to different categories/envelopes?

      If so, I would say YNAB enforces the same principles (don’t spend money until you have it, and money you overspend in one category must come out of another category) but it’s much more elegant and scalable. You can see history of spending, use as much granularity as you like without fussing with a stack of envelopes, designate money for a future purchase, and still take advantage of the perks of using a credit card vs. cash.

      That being said, I think a cash system holds you even more accountable for your spending and it’s free to start. I think it’s a great way to go to get a real understanding of your spending. I would have been tempted to go that route years ago but my Scott was really resistant to the idea because it felt so restrictive to him (even though he’s generally not much of a spender). YNAB turned out to be a less painful (to him) way of accomplishing a similar thing.

      When did you make the change? Are you happy with it?

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  3. Pingback: Look Closely and You’ll See My Life | Adventures in Beanland

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