You Need a Budget

In the past I’ve written about the Snook’s and my budget approach and how we used MoneyWell extensively. However, a few months ago we switched to something new and the time’s come for me to enthusiastically recommend YNAB instead. The impetus for the change is pretty simple: the Snook got a Nexus 5 phone from work, and MoneyWell doesn’t support Android phones at all. (And in their now-deleted forums, they basically said they wouldn’t ever.) So I went researching, and that’s how I found YNAB. I tested it out for a couple days, which was enough for me to happily plunk down $60 for a full license.

While the basic concepts are the same as in MoneyWell, YNAB just makes some things so much simpler. The UI itself is easy to use and looks very nice. Setting up our initial budget for January was simple and quick. It’s cross-platform and works on Windows and Mac (with apps for iPhone and Android). Syncing from our various phones took less than 30 seconds to set up and works automatically whenever we put transactions into the app. It’s got a “reconciliation mode” that makes it easy to find missing transactions, as well as force a reconciliation when I just can’t work out where the last $10 in cash went. I used to spend a good hour each month with MoneyWell totalling up our wants, needs, and savings to put into a spreadsheet, but YNAB just does it all automatically. It also prominently displays our net worth on the budget screen, so when I input something frivolous like a $4 cup of coffee, I actually see that big number decrease. That’s a huge psychological incentive to cut your spending! The company has a great blog and podcast where they give you tips on using the software and on managing your finances. I love supporting a company that makes excellent software that actually improves people’s lives! (This is a totally unsolicited endorsement. I just think YNAB is awesome!)

My only complaint about YNAB – and it’s a tiny one – is just that so much of the focus of the company and app is on getting people off the “paycheck-to-paycheck” cycle, and that’s not really advice I need. It’s incredibly important though and I’m glad they do it! I just want to see more advice for those of us that are past that step and wondering how to implement longer term financial planning. Like I said though, tiny complaint.