Day 9) Reviewing You Need a Budget

Welcome to Day 9 of Where’s My Money Going? Month! This February 2009, I’m challenging readers (and myself) to track spending manually for 28 days. Don’t worry if you’re late to the party, the more the merrier!

I’ve been meaning to try You Need a Budget for a while now. It’s been recommended to me by readers, fellow bloggers, and even friends. So this month, I’m using it in tandem with my [download#8#nohits]. I’m sure I’ll have more to say after a month and then after a few more months (because I like it and think I’m going to stick with it), but here’s what I think so far.

I’m going to start this by saying…wow, this guy loves spreadsheets! YNAB Pro is essentially a tricked-out spreadsheet that’s been turned into a program. But if you want a straight spreadsheet, the original YNAB is still available in its amazing spreadsheet form.

The Nuts and Bolts of You Need a Budget

One of the things I like best about YNAB is that it’s not overly-complicated but it does everything most people need. YNAB Pro has 4 areas, the Register, Budget, Scheduler, and Reports. The register is where you record purchases, the budget is…well…a budget. The scheduler is where I suppose you could set something up if you do automatic payments on some bills (for the same amount each time). I haven’t used it. The reports area lets you look over graphs of how your spending is allotted, compare by month, and see how much you’ve got left in your budget.

Though it’s quite simple to use, I would suggest going through the site’s tutorials before using the software. It took me about 20 minutes to learn the basics. I think I could have figured it out on my own, but I would have messed up a few times at first. Here’s my overview of getting started:

To set up YNAB or YNAB Pro, you start with the Register section and enter starting balances for each bank account (and name your bank accounts). You then go over to the budget area and create a budget. YNAB Pro comes with a bunch of budget categories, but you can add, delete, or edit sections to fit your life.

Once you’ve set up a budget, you enter all transactions in the register and they’re automatically deducted from the budget area. When you pop over to the budget, you can see how much you’ve spent in each category as well as how much you’ve got left for the month.

As I said, it’s very simple but also elegant enough to save you a lot of extra steps. YNAB Pro also lets you import transactions from online bank accounts, but I haven’t tried that yet since it would interfere with the manual tracking.

The Philosophy of You Need a Budget

YNAB is deeply rooted in its creator’s philosophy: Get at least one month ahead in your expenses and find a job for every dollar.

It’s possible to use it only as a handy piece of software and ignore the rest entirely, but the program is geared toward getting ahead. For example, when entering a paycheck or other income source into the register, you can select whether it’s for this month or next month. There’s automatically a “Buffer” category in the budget for savings that will eventually equal a month’s income (though you can remove it).

The author expresses his philosophy in the website, on the tutorials, and in a blog-like course of 10 e-mails called the YNAB U. If you decide to use YNAB, I’d advise checking out the course. You can easily ignore it and unsubscribe if you dislike the approach, but I think it’s one that could work well for people.

You Need a Budget Community

And finally, if you use YNAB, there’s a whole community of people who help each other learn to use it better, discuss goals and encourage each other, and generally chill in the YNAB forums. It’s neither a fast-paced nor a slow-as-dirt forum and it seems like a great place for people who need a community to help them stick to their goals. (I know I’ve found the blog community helpful for that.)

Also, there’s a YNAB blog which talks about financial goals, gives updates on YNAB, shares stories, etc.

I’d be remiss in not mentioning that a purchase of YNAB gives you 5 fun free spreadsheets as well (ok, I’m a geek). You get: the YNAB Debt Snowball Spreadsheet, 2008 Income Tax Forecaster, YNAB Retirement Planner, YNAB Mortgage Analyzer, YNAB Car Maintenance Schedule (keep car in perfect working order).

Later this week, I’ll be reviewing more tools for tracking your money, but these will all be free online programs. Then later this month, I plan to write about the benefits (and how-tos) of using Quicken’s software to manage your money manually (instead of using the normal importing function).

This post was part of Where’s My Money Going? Month. Tomorrow, is a guest post by Mike of Richer by the Day.

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