I noticed a lot of people picked up YNAB on sale and I was keen posting about it, so decided to make this thread (searched for and couldn't find an existing one).
My tips are to make a wallet account for cash, skip the 'payee' info because who cares that you bought clothing from a clothing store, and use the mobile app to enter purchases as you go.
I got into the mindset where I enter the purchases right at the place where I spend the money. It has several advantages: you almost never forget and the app communicates with GPS, so all my usual grocery shops etc. just come pre-filled with location, usual category and account. You just enter the number, that's all. It's like ten seconds, anyway. Also, the very fact that you type everything in as you buy makes you think about your purchase again. "Do I really need this?" is the one question that now pops in my mind everytime I see the YNAB icon on my phone.
I set out broad categories a year ago: montly spending (loans, cellphone, bank fees, kindergarten), daily spending (groceries, fuel), annual spendings (car and home insurance, taxes...) and approximated how much I need each month. I let the overflows carry over for each month so that I can see how much I undershot each category. I changed categories two or three times to accomodate things I didn't anticipate, always took less than half an hour to get the whole budget in line.
Now after a year I have just let the January budget auto-fill with average spendings from the past 12 months. I have to say I was pretty optimistic in several categories...
Important rule for me: always budget for at least some "fun money", otherwise you always feel like you are punishing yourself with budgeting.
Also: reconciliate often. That way, you always know where your money went and there are no holes in your accounting. This is especially useful with cash spendings, because there is no paper trail.
I balked at letting YNAB have my location information, because having some entry of where I am and that I just withdrew $Xxx in cash just seemed like a bad idea. Also, I keep the GPS/location off to save battery. Having it all so automated sounds nice, though.
I have a paper trail of cash receipts, mostly. Paying more attention to them makes it more likely I will notice and keep the odd semi-important one, hopefully.