- You Need a Budget, or YNAB, is a popular personal finance app.
- YNAB costs $US83.99 a year to use, but I tried it out on a one-month free trial.
- The app made budgeting easy to understand and it made me want to take a more active role in my finances.
Technology is making it increasingly easier to get a handle on personal finances.
The You Need a Budget app, or YNAB for short, is one of the most popular personal finance apps out there. Based on a budgeting system that founder Jesse Mecham used to gain control over his finances with his wife, YNAB stresses accountability and flexibility, and encourages users to be more active in their financial planning.
YNAB costs $US83.99 a year to use, but the app offers a 34-day free trial for anyone who wants to test it out.
I decided to try out the YNAB app for a week to see if its system could help me get excited about budgeting.
Here’s how my experience on YNAB went.
I signed up for a 34-day free trial of the app, although YNAB usually costs $US83.99 a year to use.
While $US83.99 seems like a steep price to pay for an app that is supposed to help you save more money, the app claims most people save an average of $US200 while using the app during their free trial.
After confirming the start of my free trial, the first thing that the app asked me to do was pick whether I wanted my YNAB account linked or unlinked.
Linking your account allows your purchases to automatically filter into the app interface; not linking your account forces you to input every single one of your purchases manually into the app. For ease, I decided to link my checking account and two credit cards.
When I linked my credit card, I received an alert saying I am currently carrying a balance of $US173.88 on my card.
The app gave me three choices: 1) create a goal to pay off my balance over time, 2) budget for my entire balance, or 3) skip this for now. Since I knew that I in fact had enough money in my checking account to pay off the balance in full, I chose option two. Once I made my choice, the app reminded me to manually record $US173.88 in the corresponding “Credit Card” budget.
Once I made my choice, the app reminded me to manually record $US173.88 in the corresponding ‘Credit Card’ budget.
Then I got started budgeting. The app informed me that I had $US5,893.45 to budget out.
YNAB breaks down expense categories into six major groups: 1) Credit Card Payments, 2) Immediate Obligations (such as utility bills and groceries), 3) True Expenses, 4) Debt Payments, 5) Quality of Life Goals, and 6) Just For Fun.
Using knowledge of my typical monthly expenses, I began to input a dollar amount into each category provided. I had to guesstimate for certain categories that fluctuate month-to-month based on my circumstances, such as ‘Auto Maintenance’ and ‘Gifts.’
Once I assigned a job for every single one of my dollars, I began to import my expenses from my linked accounts. This step of the process is where the value of the YNAB became most apparent.
For example, when I was creating my theoretical budget, I allotted $US100 in the category of ‘Clothing.’ But as the purchases started rolling in, it was instantly clear that I needed to increase my budget for that specific category.
YNAB quickly alerted me that I had overspent in the category in blue text at the top of the app’s interface.
When I clicked on the alert, I was taken to a new page that outlined by how much I had overspent my allotted budget.
I then clicked through to a new page, where I was given the opportunity to add more value to my budget from either the remaining balance in my bank account, or from other assigned budget categories.
I chose to clear my overspending using money from my checking account.
I really appreciated the level of flexibility offered by YNAB – it made the usually daunting task of tracking every single purchase not only easy but also enjoyable.
Every day, YNAB offers free, live 20-minute classes on the app and their website to help users optimise the budgeting system. They also dive deep into more specific topics such as creating a debt-repayment plan, saving money on groceries, and breaking the paycheck-to-paycheck cycle.
I’m going to continue to use the YNAB app after my free trial ends — I can’t wait to see how my spending habits and net worth change month-to-month under the ‘Reports’ section of the app.
I’ve never been the kind of person who checked or even thought about her bank account daily until I downloaded the YNAB app.
Now, I’m not only more curious about my finances, but also excited to be more involved with them.
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