You Need a Budget (YNAB) Review: A Great Application for Keeping Your Spending in Check

January 10, 2013

You Need a Budget YNABIf you are the sort of person that wants to take a more active role in your budget, You Need a Budget (YNAB) might be for you. This is a budget application that requires you to pay attention to your spending, and to plan out your spending ahead of time. The point of YNAB is to take charge of your finances by looking ahead and giving every dollar a job.

Zero-Based Budgeting with YNAB

YNAB is very easy to use, and focuses on the idea of zero-based budgeting. With this method of budgeting, you plan out your finances ahead of time, entering your income, and the assigning each dollar to a job. This includes planning out how much money you will save for retirement, spend on groceries, or pay in rent. Everything you plan to spend money on each month is figured out ahead of time, from eating out to paying down debt to building your emergency fund. You can even budget in “cash” that you can take out to be used as spontaneous “fun” money.

The idea is that you are supposed to look ahead and direct your resources. Unlike many other budget apps that will show you what you have been spending your money on after the fact, YNAB forces you to plan out your expenses ahead of time, and then helps you track your progress throughout the month.

While YNAB is easy to use, it’s important to note that this isn’t an application that will automatically enter your spending for you. You don’t connect YNAB to your bank accounts and credit card accounts. Instead, you are required to enter your spending in manually. This is a very deliberate move on the part of YNAB creators. The fact that you have to enter your spending manually holds you accountable for keeping your budget in line with your plans at the beginning of the month. YNAB, according to the web site, is based on four main principles:

  1. Stop living paycheck to paycheck
  2. Give every dollar a job
  3. Save for a rainy day
  4. Roll with the punches

It’s possible to use YNAB to look over your spending and make adjustments for the next month. And the fact that you create a budgeting system, rather than just a way to keep track of where the money has already, is highly in YNAB’s favor.

You can use YNAB free for 34 days. After that, you pay $60 to keep using it.

Who YNAB is For

Realize that YNAB is strictly a budgeting app. There is no way to track investments, and plan your overall long-term financial future. YNAB is great for the person who is looking for a way to take control of his or her finances, and who wants to plan out where his or her money is going ahead of time. YNAB is great from that perspective. However, if you want something that is a little more all-encompassing, including investments, you might want to consider something like Personal Capital or LearnVest.

Additionally, YNAB might not work very well for those with variable incomes. YNAB is best for those who are pretty sure of how much is coming in each month. Those with very regular paychecks can benefit immensely from using YNAB to begin planning their expenses, and taking control of their money each month. Even though there are a lot of things I like about YNAB, I don’t actually use it.

Zero-based budgeting hasn’t been something I have a lot of success with because I don’t make the same amount of money each month. Not only do I have a variable income, but my husband also has a variable income as an adjunct professor. Between the two of us, we never make the same amount of money each month, and planning ahead to give every dollar job doesn’t work for us. Instead, we prioritize our spending. We make sure the important items are covered, and then just spend whatever we have left until it’s gone.

For many, though, You Need a Budget is a great tool, and it can be a good way to hold yourself accountable for your spending, as well as plan for your expenses each month.

What budgeting program do you use? Have any questions about YNAB? Leave a comment!


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Miranda writes about personal finance almost every day. An experienced freelance writer, she's covered your money online and in print from every angle and is always looking for new ones.

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5 Responses to You Need a Budget (YNAB) Review: A Great Application for Keeping Your Spending in Check

  • Kirk Kinder


    Great article. I had never heard of YNAB. Sounds like a great tool. I still love You can easily create budget goals and follow up anytime during the month to see if you are on pace to meet the goal or not.

    Bottom line is to take action with the tool that you are most comfortable using.

  • Jesse

    Thank you for the thorough writeup Miranda! Jesse, from YNAB here.

    If I could just add one thing: YNAB is very much built to handle those with a variable income! The trick is to: 1) only budget money you actually have (vs. trying to guess, where you’ll be wrong), and 2) following the Fourth Rule of our method, where you break the paycheck to paycheck cycle, and use money earned last month, for the current month.

    You can find more about Rule Four if you’re interested.

    Thanks again for such a nice writeup!

  • Ian Tyrrell (YNAB Dev Team)

    Hi Miranda,
    Thanks for the kind words about our software 🙂

    I just wanted to add that zero-based budgeting can work really well for variable income. Jesse (our founder) wrote a great article about it.


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