Real Life

Review: You Need a Budget (online version)

About three years ago I sat down at my computer, looked at my bank balance, and typed “I need a budget” into Google. The top search result seemed so spot-on that I felt almost obligated to check it out: a piece of software named You Need a Budget.

Until recently YNAB held the distinction of being one of the few non-game programs available through Steam, and even occasionally popped up as a Flash Sale. Originally the software was an offline, standalone product that required Adobe Air (ugh) to run, but in 2016 the company launched the brand new, online edition. It costs $5 a month, and now has the capacity to automatically import transactions from your bank. (More on this in a minute.)

At its heart, there’s nothing in YNAB that couldn’t be replicated with a dedicated, if complicated, spreadsheet. However, YNAB is more than just a collection of fields — it’s the system behind the numbers that makes the difference. To be honest like anything YNAB fans can be a little cultish, but there are two basic tenets that I think can’t be ignored:

1. Give every dollar a job. That means budget every penny, even if it’s just assigned to the “Long Term Savings” category.

2. Don’t budget money that you don’t have yet. Yes, you probably are 99.9% certain that your next paycheque will show up when you expect it to, but the future is an uncertain place and things happen. Just work with the money you have right now.

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YNAB is a virtual “envelope” system. Imagine that you have $50 in the bank and $50 in your PayPal account. In YNAB, that might look like $25 budgeted for rent, $25 for food, $25 for video games, and $25 for cat toys. Before YNAB, if I wanted to spend $60 to buy Fallout 4 I might look at my account, see $100, and spend away. Instead, I look at my YNAB balance, see I only have $25 set aside for games, and know that I should wait and save up a bit more.

There has been quite the debacle around the launch of the new YNAB service. The previous software was $60, but you never had to pay again after that. Now we’re asked to pay $5 each month like some kind of chump! (Buy-to-play vs. subscription, anyone?)

However, after trying it out for a month I’m perfectly happy switching to the new service. Some features are still in progress, but being an online service means I can finally update my budget from anywhere, including work and mobile. It means that users can develop a really kickass Chrome plugin for the web. It means that the devs can push changes rapidly rather than wait and bundle them together into downloads.

It also means that users can now automatically import their transactions from most American banks, but that’s a trap in my opinion. Not only does that reduce the security of your bank account (no slight to YNAB — that would be the case with any provider), but manually adding transactions makes you think carefully about each one. It teaches you to think before you spend, and that’s a lesson I needed to learn.

YNAB is not fancy. It doesn’t manage your investments, it won’t do currency exchanges, and it’s not a forecasting tool. But if you want to track your spending, save money, and reach your budgeting goals I wholeheartedly recommend that you check it out.

 

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