You Need A Budget Catch-all

Pages

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.

wanderingtaoist wrote:

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.

You know, I never used the YNAB app. I think I just plain forgot about it. It probably would make tracking expenditures a heck of a lot easier.

Also, has anyone actually watched the webinars on how to use the program? I don't think I have the patience or attention span for it, but if it's worth the time, I'll make an extra concerted effort.

I really like the 'import' ability of YNAB. I download and update YNAB with all my bank activity once per week. It will automatically match manually entered items with the downloaded counterparts (with occasional, though rare, errors)-- letting you look over the matches and approve each. This keeps my family budget honest and ensures that when I or my wife forget to enter, it gets caught up within the week. One reason to have the "payee" field is to help you know it's matching correctly if you're doing it this way.

I've not watched the webinars, but I seem to recall a bit of a tutorial in the program that was very well worth it. Maybe it was an online thing. But either way, the YNAB intro to the program is a great starter.

I've used MS Money back in the day and Quicken, which is great for tracking your accounts, but for honest-to-goodness budgeting, YNAB is the bees' knees! I think of it like the cash-envelope system (where you take all your money for the month out in cash and place a certain amount into envelopes marked for different categories: food, rent, utilities, entertainment, etc) and then once the envelope is empty, you're out of money in that category. YNAB lets you do all that, but still leave your money in the bank earning interest. It takes some discipline to treat the numbers in the budget as if they're actual cash in an envelope, but YNAB makes it pretty simple to rob Peter to pay Paul, if you wish. Any category that goes negative can either be marked as subtracting from the available funds next month, or to continue subtracting from that specific category. You can also really easily just put a bit more money into a category an less elsewhere.

Back in college, I took a personal finance class. One of the big takeaways was the idea of the "revolving account". This is where you put a little money aside each month so that when your car insurance comes due, or Christmas, or any other annual/semi-annual payment, you have the money already set aside. Suddenly paying the huge bill is easy. It's like an escrow account for life! YNAB makes this really easy, too. And fairly automatic. I no longer stress over $800 in car insurance twice a year, because I know we've earmarked a portion of that money each month. It only took a couple months to feel comfortable with how YNAB worked, and a few more to feel well-versed. But now, it's what we pull up any time we're talking finances.

My wife and I even manage our personal-discretionary money in YNAB. We each earn a bit on the side with some contract work, and YNAB makes it easy to always know how much we each have. I actually have personal "envelopes" for apps, books, comics, games, etc. to help me make sure no one hobby robs me of all my money. This actually helped me cut way back on the buying of game bundles. (I was a bit out of control in that aspect for a while!). We actually don't "budget" these discretionary funds, but rather just input a contract-paycheck directly into the allowance category of who earned it.

tl;dr: YNAB is awesome, and you should totally take the time to learn the ins and outs. It totally changed the way my wife and I worked with money!

EDIT: Also, btw, you can run a single Steam-purchased license on two separate machines. You just have to download the non-steam install from the YNAB website and then use the license key from your steam copy to activate the second machine. Then you don't have to have your steam account on the second computer to run it. (See Help -> About -> Copy Activation Key). Similarly, you don't have to run Steam-purchased YNAB through steam, or even have steam running to launch.

RE:tutorials
Help -> Getting Started
Help -> Walkthroughs

The perk about YNAB is it wants you to plan ahead, all other products are pretty much tracking spending after the fact. Everything in YNAB is as complicated or easy as you want in regards to categories, how often you update, whether you import or not, it is essentially a digital envelope system.
It doesn't change your cash flow overnight but in the last year we've used it we've gone from almost hitting $0 in the bank at the end of a pay period to having $1000 and it gets larger every month (and when we started we had $19K in credit card debt now down to $16K).

However, any budget software is a good start, keeping track of spending doesn't hurt but it doesn't necessarily help you plan. The folks I have gotten onto YNAB were already budgeters in some extant and they've all found extra money to invest (we should all be so lucky) so power to them.

sometimesdee wrote:

You know, I never used the YNAB app. I think I just plain forgot about it. It probably would make tracking expenditures a heck of a lot easier.

Also, has anyone actually watched the webinars on how to use the program? I don't think I have the patience or attention span for it, but if it's worth the time, I'll make an extra concerted effort.

I booked in for one, then couldn't make it. They sent me a link afterwards, so I could watch a recorded one. I found that actually easier, because I could 'pause and rewind' the stuff that wasn't sinking in. I found it really useful.

Reading through this I'm really regretting not picking it up on sale, it seems like something I should be on now so it's probably worth the full price.

hmmm

I grabbed the demo of this because I couldn't tell from the website whether this would be something I would find useful. I've been using Quicken off-and-on for 20 years, but I don't like many of the changes they've made and they really piss me off when they disable functionality after three years to try to force me to upgrade.

I've never been a budgeter; my philosophy has always been to save everything and only spend when I have to, or when I've saved up for something. So the YNAB philosophy of budgeting every dollar for a specific category is completely foreign to me and I'm still not sure I'm doing it the way it expects. And honestly, their whole pitch seems to be largely aimed at people who find themselves in debt and can't figure out how it happened.

So far, after a whole four days with it, it looks like it might work for me but I don't think I'll be sure until I see how it handles the transition to next month. I've watched the videos and read their help but until I see what it does with my money in my categories I'm just not sure I know what to expect.

I bought this as well, I have everything setup and am just waiting until my first payday of the year on Tuesday to really work with it.

We are switching from a 24 to 26 pay cycle so I have a lot of changes coming. I have about 9k of divorce debt I really want to get a better handle on.

Thanks for making this thread. I was thinking of doing the same

sometimesdee wrote:

Also, has anyone actually watched the webinars on how to use the program? I don't think I have the patience or attention span for it, but if it's worth the time, I'll make an extra concerted effort.

I started YNAB at the end of 2012 and did 3-4 of the live classes. They are nice short intros, a little cheesy but do explain everything well. I would suggest them for people just starting out. Also at the end of each class they give away a license to one of the attendees at random, a nice perk if you are still on the demo.

FeralMonkey wrote:

I've never been a budgeter; my philosophy has always been to save everything and only spend when I have to, or when I've saved up for something. So the YNAB philosophy of budgeting every dollar for a specific category is completely foreign to me and I'm still not sure I'm doing it the way it expects.

The 'job' you give your dollar can just be to budget it to savings. I have an 'emergency fund' category that I put dollars to, they just sit in my bank account.

Cobble wrote:

I bought this as well, I have everything setup and am just waiting until my first payday of the year on Tuesday to really work with it.

The start of the year is a great time to start it, since at the end of the year you'll get to see the nice summary reports and everything you did that year. I suggest entering all of the your spending starting on 1/1 if you haven't already.

If you have someone in your house who is a college student it is free. I think you have to email them each year from the EDU email account but it's free.
Also if you have the demo you can usually email and get an extension or two if you're still on the fence.

I've been using YNAB for about a year and a half now, and found it super helpful to keep budgeting in mind. I used to just spend with a general idea of what my budget was, but that, of course, cost us a ton of money and subsequently racked up a lot of credit card debt. YNAB has definitely helped us get on top of our debt, though I feel like I could still do better (for instance, I still don't bother entering expenditures in the mobile app the moment I pay for something-- I just try to update the budget every 1-2 weeks). I'm also bothered that it is so easy to spend over budget, but that is really on me-- which, I think, is the whole reason for this software to begin with. Mint might automate a bunch of stuff and send me warnings on over-spending and such, which can be helpful, but that automation just allows me to continue ignoring what we're actually bringing in or spending.

I've only just started budgeting the credit cards the way YNAB suggests, and it's kind of a bit much to wrap my head around. Their video tutorials on budgeting credit debt are super helpful, though.

Also, a quick tip:

If you don't want Steam to log the hours spent in YNAB (or tell others that you're budgeting instead of gaming), you can create a desktop shortcut directly to the .exe and run the software outside of your Steam client.

WipEout wrote:

If you don't want Steam to log the hours spent in YNAB (or tell others that you're budgeting instead of gaming), you can create a desktop shortcut directly to the .exe and run the software outside of your Steam client.

You can also get the key out of steam, uninstall the steam copy and install the stand-alone installer from the YNAB site and use your steam key to validate/activate.

Also, for whatever reason this is the first time in three/four steam sales (summer, winter, summer) that YNAB didn't hit 75% off during the winter sale.

I bought it at 75% off. It was a flash sale though, not a daily

Sigh. I was waiting forever for a sale to buy this and then caved about 2 weeks before the steam winter sale, knowing it was going to be on sale. Now my fears have been confirmed. I love the program though. I reconcile it once a week. I like how it manages everything together. I have all my accounts on there, my credit card as well as some debts so I can track how they are being paid off. The mobile app is great and super convenient.

I'm just now understanding this isn't some niche, simulation game.

I do need a budget. So, maybe I should pick this up.

WipEout wrote:

I've only just started budgeting the credit cards the way YNAB suggests, and it's kind of a bit much to wrap my head around. Their video tutorials on budgeting credit debt are super helpful, though.

I watched the tutorials and still don't get it. But I've always been moderately dense when it comes to finance.

Related to the above, one question... Why do they want people to manually enter interest accrual amounts on any/all credit accounts every month themselves? Really?

I'm budgeting payments on stuff and in this one line (the card I sunk all my Christmas spending on) I've budgeted a payment for about a two thirds of it, and know that there will be some interest on the still sizable amount that remains, but the software just happily ignores that fact of life and reports that my negative balance on that line will be exactly dollar for dollar what the balance is minus the payment. While that's a nice dream, it is unfortunately not the way the world works.

It won't affect me for very long as the card will get paid off next month but if someone has gotten into debt on credit cards and is trying to use this software to help them manage the process of digging their way out of it... yeesh. I can't imagine people in that situation not being supremely annoyed that they paid some money that is very likely quite important to them for this.

In YNAB's perfect world you aren't accruing new debt, you're using the digital envelope of money you set aside for whatever you're buying. I still put money on my CC in the Pre-YNAB debt category and I put my interest on in a separate transaction (it is a separate transaction after all).
If you're good with your credit cards in regards to carrying a balance don't use YNAB to track them.
Ultimately there are a number of ways to handle CC's in YNAB:
1) Each time you use it transfer the money to the account in real life and in YNAB.
2) Tally up the expenses you've put on the credit card over the course of your billing cycle and pay that amount in addition to any balance pay down, note in YNAB.
3) In my situation I pay at least $1K on my CC every month I just try not to use it if I don't have to so I pay my thousand every 27th and the pre-ynab cat goes down appropriately compared to use.

Last step in any of these, the next day when interest posts, I reflect that in YNAB with a transaction labeled interest.

Thin_J wrote:
WipEout wrote:

I've only just started budgeting the credit cards the way YNAB suggests, and it's kind of a bit much to wrap my head around. Their video tutorials on budgeting credit debt are super helpful, though.

I watched the tutorials and still don't get it. But I've always been moderately dense when it comes to finance.

It's useful when you have a financial goal. Repaying a loan is an obvious one, but you can choose anything, say "Save 1800 USD for a vacation until September" or just "Save everything you don't need to spend". Budget for that goal, i.e. make a category "Vacation" and budget 200 USD for that each month. Then budget for everything else. If your budget is way over your monthly income, find ways to save without lowering your goal. Monthly payments are great place to save: if you can cut down on cable/cellphone/bank fees some 20 USD a month, you just got 240 a year.

The great thing is that the budgeting software makes you aware of the expenses, especially the longer-term ones. If I budget 10 EUR a month for TPL insurance, I am well prepared to pay down my 120 EUR in September. Same goes for road tax etc. They are all small expenses, but they do add up and can unbalance your financial situation.

As a journalist, I write a lot about finance, including personal finance. One thing I remember from talking to numerous financial advisors is: Whenever you ask people how much they spend on themselves each month, double the figure. If you ask them how much they are able to save each month, halve that. This is not because people lie, it's just that most of us are woefully unaware of their financial whereabouts.

Eezy_Bordone wrote:

In YNAB's perfect world you aren't accruing new debt, you're using the digital envelope of money you set aside for whatever you're buying. I still put money on my CC in the Pre-YNAB debt category and I put my interest on in a separate transaction (it is a separate transaction after all).
If you're good with your credit cards in regards to carrying a balance don't use YNAB to track them.
Ultimately there are a number of ways to handle CC's in YNAB:
1) Each time you use it transfer the money to the account in real life and in YNAB.
2) Tally up the expenses you've put on the credit card over the course of your billing cycle and pay that amount in addition to any balance pay down, note in YNAB.
3) In my situation I pay at least $1K on my CC every month I just try not to use it if I don't have to so I pay my thousand every 27th and the pre-ynab cat goes down appropriately compared to use.

Last step in any of these, the next day when interest posts, I reflect that in YNAB with a transaction labeled interest.

I get that, but still think it's just kinda dumb not to automate interest. It's only going to effect me this one month, for the time being anyway who knows what the future holds, but again... if I had bought this software while buried under credit card debt I would be pretty upset with it and wishing I'd just gone for the free solution in Mint.

I've never had a credit card so maybe this suggestion doesn't fit, but anyway, could you make a repeating transaction for the amount of interest you are likely to pay and adjust it to fit when the amount comes in each month? Dunno if that helps.

I haven't watched any of the videos. I signed up for the email thing it suggested when I first started and it was good advice but not eternally memorable, I guess.

Another thing: using accounting software, any kind, makes it obvious when the numbers don't add up, and it's possible to feel a burden of having to account for every cent to make everything tally. I would say though, that half a loaf of accounting is better than no bread. I have a category labelled ? that I put on remainders I can't account for. Even if you fall off the wagon for a couple of months and don't track every last thing, you can still just start back up again as needed. You can get a big picture view of what's happening with your money without tracing each $2 purchase.

Another incentive for me to keep everything entered and up-to-date though is it's far easier for me to check my account balance in the YNAB app to see if there's enough money to pay for something than logging into online banking on the phone.

Mermaidpirate wrote:

I've never had a credit card so maybe this suggestion doesn't fit, but anyway, could you make a repeating transaction for the amount of interest you are likely to pay and adjust it to fit when the amount comes in each month? Dunno if that helps.

YNAB in fact allows you to do that: make a repeating transaction with value field empty, then fill it in when it comes due. Very useful.

For those who only want to track their income and expenses, I can recommend toshl.com. I have been using that for a year (with subscription), but even the free version allows you to track your spending quite well. Plus, it has a great mobile app to make adding expenses even easier. They are currently preparing a major overhaul, from what I have seen they seem to be moving it more towards YNAB (managing different accounts etc.). When my subscription ended I moved exclusively to YNAB (I have been using both alongside each other for a year), but ToshL is a solid choice.

For me I think its good that I manually enter the interest rate as an extra transaction. it helps me understand everything about how I am paying it down.

Though dropping 1k a month on a CC payment? Eezy, Is your firm hiring? lol

Cobble wrote:

For me I think its good that I manually enter the interest rate as an extra transaction. it helps me understand everything about how I am paying it down.

I kind of figured that's the point of YNAB and the reason nothing is automated. I remember when I first bought it, they said they aren't trying to compete with Mint, for that very reason-- automation can breed laziness, basically.

Yeah if I pay interest on a card, I just wait for the interest to post and then add it in as a separate transaction labeled Interest, like Eezy said.

I've been using YNAB for over a year now, and I really like it. I was using my own spreadsheets before, but, since I wrote them, they were too easy to cheat on—and then became pointless. YNAB still lets you fudge (lowering the budget in one category to cover an overage in another, as mentioned above), but there's no more cheating.

I had/have a couple conceptual hiccups with YNAB but it's generally pretty simple. The first is credit cards: I can't quite wrap my head around how YNAB handles credit card debt. The upshot was that it became the kicker to pay off the cards—I decided it was easier just to dip into our savings and pay off all our cards in one fell swoop, rather than learn this aspect of YNAB. Now we just use our CCs and pay them off immediately (er, how we meant to use them originally).

Another hiccup that finally clicked is how you save: I couldn't figure out where to "put" the money. But you don't put it anywhere. Like LeapingGnome said:

LeapingGnome wrote:

The 'job' you give your dollar can just be to budget it to savings. I have an 'emergency fund' category that I put dollars to, they just sit in my bank account.

You just make the category/categories in YNAB and let the actual money sit wherever you want it to.

Mermaidpirate wrote:

Another thing: using accounting software, any kind, makes it obvious when the numbers don't add up, and it's possible to feel a burden of having to account for every cent to make everything tally. I would say though, that half a loaf of accounting is better than no bread. I have a category labelled ? that I put on remainders I can't account for. Even if you fall off the wagon for a couple of months and don't track every last thing, you can still just start back up again as needed. You can get a big picture view of what's happening with your money without tracing each $2 purchase.

Another incentive for me to keep everything entered and up-to-date though is it's far easier for me to check my account balance in the YNAB app to see if there's enough money to pay for something than logging into online banking on the phone.

It took me a few re-starts to finally get going with YNAB, and to the program's great credit, it's super-forgiving about that. Get too far behind and just want to scrap everything and start over? Done. I know our cash account has gotten way out of whack, so I'll just go through our wallets, and let YNAB make an adjustment. No problem.

I think YNAB is definitely aimed at people who need to stop living hand-to-mouth. We have savings, but I budget to keep on top of our expenses, and to know "If we make x and spend y, how much will we have in z months?" Maybe YNAB does that in its reports, but I haven't really looked at them. In any case, YNAB and the app make tracking expenses and budgeting dead simple. Really nice-looking program, too! (I was using Money 4 for a year or so before YNAB, and blech.)

Here is how I do credit cards. I have them entered as accounts so I can see the details of paying them down. Then I also have separate line item categories for budgeting my payment every month. I then have a scheduled transaction to my checking account on the 5th of the month for both my CCs for my minimum payment. That way, like my other schedules, it shows up red until I budget for it (unless I have enough to cover it already in the budget, which I wont because i zero out on payment)

Then I get paid on the 6th. I add the transaction of my income to the checking which gives me the money to budget. I then add all my budgets for all my bills and other expenses always ending at zero. I do this for every income transaction. If I want to send more to my credit card i just up the budget and adjust the transaction. When I pay my CCs I first use the statement to add the interest change as a separate transaction to the CC. Then after payment I add my payment to the CC transaction as incoming. If my minimum is 40 and I want to pay 80 that month I just add 40 outgoing to the outgoing on the budget cc category then 80 to the budget so at the end of the month the CC category is zero ready for next months bill.

For reference I do the same thing mid month as I get a biweekly paycheck. I have a series of bills like next months rent and elec that come due past the 15th. So I have a bunch of schedules setup for all those bills so they are there waiting for me in red until I get pad and handle them via the budget.

I am brand new to this though and this is my first month using it. In fact I get paid tomorrow so we will see how this works or if I am way off base.

Gravey wrote:

I think YNAB is definitely aimed at people who need to stop living hand-to-mouth. We have savings, but I budget to keep on top of our expenses, and to know "If we make x and spend y, how much will we have in z months?" Maybe YNAB does that in its reports, but I haven't really looked at them. In any case, YNAB and the app make tracking expenses and budgeting dead simple. Really nice-looking program, too! (I was using Money 4 for a year or so before YNAB, and blech.)

This is what I have been since my divorce. At the least I want more control and knowledge about what I am doing and use that to have better spending as well as savings habits. YNAB itself wont save me money but using virtual "envelopes" I think will help me not just look at my checking account balance every time and saying, oh look I can afford that, when I cant.

I've never lived hand-to-mouth, but still love YNAB. It makes me more conscious of my expenditures big and small. I actually only use it for my personal account, and the account of my wife and I. My wife's personal account is hers alone

For cash expenses, I always just put the expense on the bank account the cash withdrawal was made from, which usually is my own account. Most often I'll forget to use the app while still in the store, but I save all receipts until I get home and do the input there. I do specify which specific store I got it from, because I love to see where I spent what money.

For cash I don't spend that much cash so I don't worry about keeping track of it. Like $20 a month maybe. So if I take cash out I just put an entry in my bank account and categorize it as cash and have it in the Income category but as an outflow instead of inflow.

Oh and for those that don't use the mobile app, I would really check it out. It is one of the best things that makes the system work. If you don't use the app, how do you know how much money you have left in a category when you are out? I use the app all the time for entering transactions, it is easier than doing it on the computer unless you need to do a split. If I get gas, I just put it in on my phone before I pull away from the station. If I eat out, I just put it in before I get up from the table at the restaurant. If I do need to do a split, like from Target, then I will just keep the receipt and do it when I get home since they are easier to do on the computer.

Cobble - for me the way you are doing credit cards is weird. It has been a long time since I looked at the YNAB videos, but I seem to remember they have one on credit cards and watching it is what made it click for me. Here is what I do:

- Have an account for each card
- Have the starting balance for each account be the card balance, this starts as "pre-YNAB debt" and shows on your budget as a line item
- Each time you make a payment on the card that is just a TRANSFER in YNAB from your bank account to the card account (outflow from the bank, inflow to credit)
- Of that payment, how much went to paying down the pre-YNAB debt, put in the budget on the pre-YNAB debt line.
- For the interest just add a transaction to the card account called Interest and the category is pre-YNAB debt for that card, so it keeps adding to your debt until it is paid.

In other words, say you started out with $1,000 in pre-YNAB debt on a card and then that month you had $10 interest and $100 in purchases. Your pre-YNAB debt balance would show $1,010 (debt + interest) and your card account balance would show $1,110. Then you make a $200 transfer from your bank account to your card. Now the card balance shows $910. $100 of that payment covers the $100 in purchases you made. The other $100 goes to the pre-YNAB debt so in your budget you budget $100 for the debt. The $100 in purchases should have been budgeted in whatever category they were (groceries, gas, etc). Now your pre-YNAB debt in the budget also shows $910, matching your card balance!

Doing it your way you are like manually manipulating the accounts and budgeting the money differently, and also at least on my first read-through, I am not sure how you are budgeting and paying for ongoing purchases. You don't need a separate budget category for the card payment, because you already have that in the pre-YNAB debt section. One of the things I had to get over when I went to YNAB was to stop trying to say I am budgeting my bank account, because you aren't really. You are budgeting your income, your transactions can be in many accounts, your bank account is just one, and the budget has to match your income, not your bank account. You can have $5,000 left in your bank account but no money left in your budget, because you gave that money the job of being savings or emergency fund or pre-planning for christmas spending, whatever.

LeapingGnome: That's the way I do CCs too, which IIRC is how the tutorial videos explained it. Sometimes a number doesn't match, and then my brain collapses, but that's more my problem than an indictment of YNAB.

I'm also tempted to just stop itemizing all cash purchases and just delete the cash account and record all withdrawals as spending money, mostly because they're small and usually by Mrs. Gravey who often forgets to get a receipt.

Pages