When it comes to financial planning, we all have our own styles. Mint has been dominant in recent years, but there has also been a great deal of interest in You Need A Budget (or YNAB for short). One of the reasons that YNAB has received so much attention is due to its proactive approach to spending.
YNAB works on a Windows PC or Apple Mac OS X (Intel based). YNAB uses a system that is desktop based (you can also get an app that allows to fill in your information, and then sync it later). Instead of connecting to your accounts like Mint does, YNAB requires you to actually enter each of your transactions. YNAB also has you assign each dollar a job. YNAB is about planning, and is built on the idea of a zero-based budget.
This is one of the main differences between YNAB and Mint. While you can create a budget with Mint, and Mint will help you track what you’ve spent, and show you at the end of the month, YNAB requires that you by more actively involved with your finances. You are forced to enter your transactions, adding another layer of conscientiousness to your spending. With Mint, it’s more of a reaction to the spending you’ve already engaged in, while YNAB focuses on the proactive approach of planning.
YNAB has an easy to use interface, and is simple to set up. Unlike Mint.com, it does cost money. You can try YNAB free for 34 days, and if you like it, you pay $60. Mint also has a consumer-friendly interface, although it has a different feel than YNAB, and it is free. YNAB has a number of features and bonuses that allow you to see where you’re at, as well as make plans for where you are going. Mint also has some powerful features, one of which is a savings finder that can help you compare interest bearing accounts, and other financial products, to help you decide to change some of your habits so that you aren’t wasting as much money.
YNAB, however, is more of a system. It’s designed to help you get out of debt and stop living paycheck to paycheck. The YNAB system is based on four principles:
- Stop living paycheck to paycheck
- Give every dollar a job
- Save for a rainy day
- Roll with the punches
Budgets are relativity easy to manage
(click to enlarge)
In the end, though, it really is about your style. I don’t use currently use YNAB or Mint. However, YNAB is closer to my style, with its ledger/checkbook register look in some places, and its focus on planning ahead. My main issue is the zero-based budgeting principles, which I struggle with, since I have a variable income. I found it difficult to accurately ascertain my expected income each month in order to give every dollar a job.
On the other hand, I know that there are several people who prefer Mint. It really depends on what works for you, and what you prefer. If you already have a system that works, or don’t have much debt, this application isn’t for you. If have problems managing your money. Though compared to Mint.com which automatically downloads your transaction, I question how many will fully use this application.
It will be fantastic if they implement intelligence calculations like in Numeric Notes on os X.
Given that you have to manually enter your transactions, is YNAB more like a spreadsheet template? One that sets you up to track your spending and calculates amounts, but doesn’t do much beyond that? You said it’s more of a system, which is why it sounds similar to a pre-set excel template, but I wasn’t sure.
For what it’s worth, unless YNAB’s system is out of this world, it seems unlikely that users would switch from a free, automated system to a paid, manual system – but I haven’t used YNAB yet. Just my two cents…
Love the blog – thanks for the review.
Tim Murphy
You can use the same method with a spreadsheet, and there are similarities in the way it looks, but YNAB is a little easier (at least from my perspective) when it comes to entering transactions and viewing them. I personally like the viewing better than a spreadsheet, and find it easier to break things down. It’s cleaner and easier to navigate than a spreadsheet, but someone good at spreadsheets could probably work up something somewhat similar to YNAB.
But I like the manual aspect of it (I actually use MoneyDance). If you want something automated, that automatically pulls from your account, YNAB probably isn’t for you.
A friend linked me this review after I posted about giving YNAB a go.
I was building my own spreadsheet system based on this style for a while… broken down into
Daily / Fortnightly / Monthly and Yearly with calculations back and forth, a seperate sheet to tally up my daily expenses outside my budget and then this being worked back into my money flow.
But it was more of a static overview. YNAB gives a more fluid overview and I can see exactly what’s happening with my funds in a much clearer stance and how it’s affecting my future budgeting.
Mint while automated, at a quick glance doesn’t quite suit my needs, as I’ve tried a few budgeting methods and the idea behind YNAB fits my thought patterns precisely!
Hey Miranda – thanks for the reply. Not familiar with MoneyDance but I’ll check it out!
Hi Tim,
MoneyDance is also reviewed on our site:
http://investorjunkie.com/15716/moneydance-review/
Thanks, Larry!
“…since I have a variable income. I found it difficult to accurately ascertain my expected income each month in order to give every dollar a job.”
Hello! I just wanted to let you know that YNAB is even better for people with variable income because it is designed for you to be budgeting off your previous month’s income (not the current month as you are making it). This takes all the guess work out of how much money you have to spend. This is embedded into principle #1 you have listed above. Once I did this, it changed my world!
The beauty of YNAB is you’re budgeting what you have in your pockets/bank account/etc. not what you’re expecting or might expect to come in. Budgeting this way helps you to live within your means.
Imagine budgeting $1500 you currently have vs $1500 you will be getting tomorrow only to be short $300.
If you budget what you don’t have (yet) you will fall short often, which is why the paycheck-to-paycheck cycle continues.
If your bank allows you to download your account to your computer you can import it into YNAB. So it automatically populates you account for you.
YNAB full version mobile apps are currently available free on both Google Play and iTunes.
Google Play: https://market.android.com/details?id=com.youneedabudget.ynab.app.market
iTunes: http://itunes.apple.com/us/app/you-need-a-budget-ynab/id372076250?ls=1&mt=8
Don’t know how long this will last.
I believe the mobile apps were always free. You MUST have the desktop edition to use.
Previously the mobile apps also cost. Positive on Android, fairly sure on Apple. Price just dropped to FREE in the past few weeks. Since the mobile version requires desktop version be installed also, hopefully mobile will remain free.
Since you have a variable income, you may wanna check out financial peace university through http://www.daveramsey.com/fpu