Last fall I began looking for software I could use for budgeting. I wanted something a little bit more fancy than a spreadsheet but easy to use for the average home budget. I tried a couple of different android apps, some of which I couldn' t even get set up and I found them very complicated.
Then I found YNAB (You Need A Budget). I read through the forums and downloaded the trial to see if I could make it would for my budget. It was pretty easy to get set up and the few questions I did have got answered by reading the forums. By the end of my trial, I was hooked and decided to buy the program, which cost $60. I conveniently set up a budget category for purchasing YNAB and the money was in my checking account when I needed to purchase it.
Why I love YNAB:
1). It's easy to set up and use
I had my whole budget set up in less than 30 minutes. You create accounts to reflect your current chequing/saving accounts. You also will need to create your budget for the month where you appoint each dollar to a category. YNAB has tons of tutorials and help if you run into any problems. At the end of the day/week/month it is quick and easy to enter your purchases, or YNAB has a handy mobile app so you can enter them as you're checking out from a store.
2). It imports transactions from bank statements.
To be honest, I rarely used this feature because I preferred doing it manually. The only reason I wanted to do it manually is so I could break down transactions further and really see what I was spending. I'm a little bit of a numbers nerd when it comes to budgets and spreadsheets. I also felt like it made me more accountable to what I was spending, kind of like a calorie journal for someone on a diet. For the rest of the people out there who really don't like budgeting and would like to spend as little time possible doing it, this is the feature for you!
3). You can set up automatic payments.
This is one of my favourite features because I was able to enter in my paycheck amount once and have it automatically repeat every two weeks. This was the same with the mortgage, car insurance and other payments where the same amount came out on the same day every month. This made it easier to balance my budget and I spent even less time entering in transaction every month.
4). The categories show your balances.
Whenever you look at your budget it tells you the amount you have budgeted, the amount you have spend so far this month and the amount you have left to spend. At the end of the month you can choose to carry what you have left over/what you overspent to the next month's total budget or directly to the same category. This makes it really handy for budgeting for things like Christmas - if you budget $50 one month and you don't spend it, it will add to the next months budget making your category total $100.
5). It has Four Rules to whip you into financial fitness.
One of the things I love the most about YNAB is the philosophy behind it. It helps you plan your budget and teaches you how to make your money work for you. The rules are
Rule 1: Give every dollar a job: This means you work on a zero based budget there should be no dollars left over that haven't been allocated to a specific "job" or category in your budget. There is still room for spending money, but it has to go into a category called something like "spending money", "play money" or "misc". This makes it possible to know how much of your income is going to needs and wants. Remember, your budget can always been adjusted, need to put extra gas in the car and have money left over from groceries? Simply adjust your budget categories for the month, but every dollar still ends up with a job.
Rule 2: Save for a Rainy Day: This step is all about saving for both those planned and unplanned expenses. You need to set aside some money to cover big bills (think taxes, insurance premiums or Christmas) and you need to have money put aside for an emergency fund (emergency car repairs, job loss). YNAB suggests having at least $1000 available to access in case of emergency. $1000 is a great start, and building that up to 3-6month worth of expenses would be even better.
Rule 3: Roll with the punches: This works closely with reason number 4 why I like YNAB. It automatically adjusts next month's budget if you go over your budgeted amount. This means if you are budgeting $200 in groceries and you end up spending $250, it will subtract that extra $50 from next month in order to balance your budget. This might sound a bit odd at first but if you do the math it makes sense. Let's say you have $1000 in your bank account as your "rainy day" money. You get paid $1000 and now have a total of $2000 in your bank account. Then you budget the whole $1000 pay check but end up spending $1200. You would only be left with $800. Next month you get paid $1000 and have a total of $1800. YNAB is going to tell you to budget $800 instead of $1000. This way you build your $1000 fund back up before it's eaten away. Sounds a bit confusing, but good news it, YNAB does all the math so you don't have too!
Rule 4: Live on Last month's income: I cannot wait until we reach this stage. Imagine, it's the first of the month and every penny you are going to spend that month is already in your bank account. No checking to see if you will get paid before your mortgage comes out or having to wait till pay day to pay utilities. This step really puts you in the drivers seat of your money. If something was to happen and you lost your job or had to take an unpaid leave, you'd have a month to figure out what to do. This may be the hardest step to achieve, but it makes a huge difference in how you spend your money.
YNAB has changed the way we track our money and view it over the month. We still use a spreadsheet and YNAB and will most likely continue to do so until we are out of debt and completed the fourth step. Tracking everything in YNAB makes it super easy to look back on and compare month to month using their reporting section.
What programs do you use to track your spending?
