This is the last review in a four part series on budgeting software. I’ve already reviewed Wesabe, Mint, and Mvelopes. Today I’ll be reviewing Y-NAB* (short for You Need a Budget). Y-NAB is a very simple, yet effective, desktop system for budgeting your money. It is based on four rules of money management.
- Stop Living Paycheck to Paycheck. Even if you are living paycheck to paycheck now, Y-NAB helps you to make a plan to save a month’s worth of buffer money, so you have some padding in your checking account.
- Give Each Dollar a Job. This is what we like to call a zero based budget. Every dollar you bring in has an assignment, even if that assignment is “fun money”. It’s a good way to know where your money goes every month and plan accordingly.
- Prepare for Rain. Yes, you need to be prepared for irregular expenses like a new roof or a car repair. Y-NAB helps you do this.
- Roll With the Punches. There will be times when you go over your grocery budget, spend too much eating out, or go over on the car maintenance budget. Y-NAB makes it easy to adjust and move on, so you aren’t tempted to give up on your budget all together.
The Process
Unlike the other applications I’ve reviewed, Y-NAB doesn’t connect directly to your bank account, and it isn’t an online application. You need to download Y-NAB to your desktop, and you can either manually enter your bank transactions, or you can download the transactions from your bank to your desktop and then import them into Y-NAB.
Setting up your budget is really easy. There are already basic categories set up, but you can add categories easily. It’s also easy to see at a glance where you are with your budget for the month.
Categorizing transactions is also very simple. There’s a handy drop down menu for categorizing, and there’s a tool to categorize split transactions as well.
In Y-NAB Pro, there are also pie charts and graphs to see your spending trends at a glance. You can choose between a pie chart and bar graphs, and you can even compare your spending from month to month.
Perhaps my favorite feature on Y-NAB is the ability to adjust your budget from month to month. If you overspend in a given category, that amount is taken off your total budget for the next month, rather than from the category you overspent on. So if you overspend on groceries by $50, your total money available for the next month will just be $50 less, and if you don’t want to cut your grocery budget, you can make the cut somewhere else.
Y-NAB comes in two versions. The excel spreadsheet version is $19.95 and the Y-NAB Pro version (which is what I evaluated) is $39.95. I’ve been told that the one thing people find to be lacking in Y-NAB is account tracking, but that feature will be included in the next release of Y-NAB. And if you buy the current version, you don’t have to pay to upgrade to the next release.
The Pros
- Very intuitive.
- Easy to set up a budget.
- Easy to adjust the budget from month to month.
- Doesn’t directly connect to your bank, for those who worry about security.
- Gives you a good overview of where you stand for the month.
- Makes budgeting to save a buffer easy.
- So far the best I’ve tried for use with a variable income, though it’s still not real easy.
The Cons
- Cost is $39.95 for the Pro version (though that’s not real expensive)
- It doesn’t automatically sync with your bank (if you’re not worried about security, and you want something quick and easy)
- It’s a desktop app, so you only have access from one computer.
- Might be a problem if you forget to write down transactions frequently, and you don’t download transactions from your bank.
I really, really liked this application. In fact, I’m considering using it for my own budgeting this year. The only thing holding me back is that I do forget to write down transactions, but I guess I can download them from my bank. If you’re just getting started trying to make a budget, Y-NAB* would be a good program to try. It’s simple, so you won’t get bogged down in the details, and it provides a very clear picture of where you are with your budget at any given moment.
Several of you have mentioned other programs to me over this week, and rest assured I have written them down and will review them at a later date. I never realized there were so many financial programs out there!
Thanks for sticking with me during the reviews this week, and I hope we are all able to meet our financial goals for the new year. Stay tuned for more on my financial goals on January 1!
Other reviews in the series:
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Thanks for posting this series, I always like to see what else is out there, I have used MS Money for so long, I sometimes forget that their are other programs out available! Whichever system people decide to use, it is always a good idea to keep track of your money as closely as possible, so thanks for sharing all these wonderful reviews!
Take Care
LJ
Ooh, I like the sound of this software. It’s my favourite of the four you have reviewed. Too bad budgeting software isn’t in my budget! I think I’ll have to stick to my excel spreadsheets this year.
This one sounds tempting to me. I have used Quicken for many years to manage all of my accounts and transactions, but I use Excel to manage my monthly budget- doing what sounds to be the same thing that YNAB does. I’m guessing YNAB would be a bit more user friendly and maybe save me time maintaining my spreadsheets. I may have to give it a try, though I don’t like the idea of spending money to manage my budget. :)
Your subsequent reviews have not swayed me from using Mint. The $40 price for today’s app is excessive- and the desktop-bound app is a definitely hinderance. I recommend Mint out of all these apps you reviewed.
The $40 price tag is the one reason I haven’t made the move yet. I do love Mint a lot. The only thing I don’t love is that it doesn’t have the ability for me to see what I’ve budgeted in each category for the month, and how much money I have left to spend in each category. And at this point in my life, I really need that. If Mint would add that ability, I’d be one happy camper! :)
Thank you posting all this great info! I enjoyed reading your series,in was very informative:)I think I’ll try the Mint in 2008!!
Thanks for doing this series Lynnae!
If I import the transactions to my desk top does this mean they automatically will go into each category? or do I still have to manually fill in the transactions? I am thinking that I can just click somewhere and our transactions will automatically go into each category?
I use walletproof but think that I will have to give this one a try. I had never heard of Y-Nab before!
Thanks so much :).
We have been using this software for almost a year and it
has been a great budgeting help. Easy to use…recommend
it highly. Wouldn’t use anything else.
@Heather – My trial expired, and I can’t remember exactly how the categorizing worked, but I remember it was really easy. When you import the transactions from your desktop, they all show up automatically, so you don’t have to enter each one manually. As for categorizing, there are drop down menus for choosing a category, and I *think* you can opt to have transactions from certain places automatically categorized.
My best advice would be to go to download.com, search for YNAB, and download the 15 day trial to see if it works for you.
@Amy – Thanks for your input. It’s always nice to hear from someone who has used the software consistently. It’s sometimes hard to get a good idea as to how it’s going to work from a two week trial.
I use YNAB. I use it both at home and work, using both Apple and Windows operating systems. I bought the basic version (using Excel) and keep it on a flash drive that I carry with me. Since it contains no personal information–no names, accounts, bank names, etc.–it’s not a financial emergency if I lose the flash drive (I keep a back-up on my hone computer when I update here).
(No affiliation with the makers of the product. I’m just stating my experience. It works well for *me*, but everyone needs to know what works for them.)
@thisisbeth – I broke down and bought it, and I’ve been loving it so far! It’s a great idea to keep it on a flash drive. Maybe I’ll do that, too!