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You Need A Budget, a Software Review

Updated on October 14, 2017

What is YNAB?

YNAB stands for You Need A Budget. Technically YNAB is just a budgeting software. It can help you track money in and money out. It can help you pay off your debt and save up for big expenses. But YNAB is more than just another financial planner. If you will take the YNAB philosophy to heart it will pay big dividends. The YNAB philosophy (also known as the 4 Rules of YNAB) will help you look at your financial life in a new way. When you start thinking about your money differently, then things begin to happen.

When you become the master of your money, tracking every penny in and every penny out, you start thinking about how you are spending your money. You become more consciously aware of what you are doing with it, which leads to better buying decisions and often greater savings. You save because you think twice about impulse purchases. You begin to plan ahead more, so you may spend less on birthdays and Christmas gifts because you are thinking about them ahead of time, you catch things on sale more often and you tend to stick to your budget when you are not pressed for time.

The You Need A Budget Story

Jesse and Julie Mecham were full time college students and part time employees, expecting their first child. They were trying to make ends meet and get through school without student loan debt.

Jesse, an accounting major, developed a spread sheet to make their budget. Along the way he developed what have become the four rules of YNAB.

Give Every Dollar a Job

Save for a Rainy Day

Roll with the Punches

Stop living Payday to Payday.

Of course Jesse and Julie told their friends about it and while trying to make some extra cash to pay the rent for another semester Jesse began selling copies of the spread sheet to friends and YNAB was born.

So what makes YNAB different? I think it's really more about the 'rules' of YNAB than anything else. Jesse's financial philosophy is simple and easy to understand. Let's look at the four 'rules' of YNAB a little closer.

Give Every Dollar A Job

Some of us make a budget where we ear mark the money we need to pay our bills and just spend anything left over without a lot of thought. But YNAB says give every dollar a job. Track every dollar coming in and going out. If you haven’t been doing this it will be a real eye opener. Especially if you eat out frequently or stop for coffee every day on your way to work, or your kids are nickel and dimeing you to death. You will be surprised at the amount of money you can save when you are paying attention to your spending habits.

robbing the piggy bank
robbing the piggy bank

Save for a Rainy Day

Why are we always surprised when we get those less than monthly bills? You know the property taxes, house insurance, and car registration? We know they are coming, we usually even know when they will be due and hey, everybody knows the date for Christmas! We really need to plan ahead for those items. Estimate the cost and divide by the number of months in the billing cycle. For example, 12 months for that annual property tax bill, 6 months for the twice yearly house insurance. You then save that amount each month. Walla! When the bill comes, the money is sitting there in the bank waiting to pay it. No more mad dash and scramble to come up with it in time.

Roll With The Punches

Sure you will blow the budget and overspend occasionally. YNAB will draw your attention to it in big red numbers, giving you a chance to adjust things this month or deduct the over spending from your total income next month. This handy feature helps keep you on track, it helps keep you optimistic that you will make your financial goals and it keeps you from giving up before you really get started.

Stop Living Payday to Payday

This was an especially important concept with Jesse and Julie’s variable income. How could he make next months budget if he didn’t know what their income would be? Goal: Save as soon as possible enough money to cover one month’s expenses. This gives you a buffer of time and money. On the first of the month you already have all the money you will budget to spend for that month. Any income you receive during the month becomes the money you will budget and spend the following month.

Do You Already Use YNAB?

Just wondering how many others already use YNAB to keep their finances on track.

Do you already use YNAB?

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$100 in the bank
$100 in the bank

Today's YNAB

Today's YNAB is a self contained software program that is extremely intuitive and user friendly. YNAB is backed up by fast, personal customer service as well as a great group of people on the website's forums. They are always ready to help out newcomers.

When I was looking at and comparing YNAB to other budgeting software programs the real clincher for me (besides the 7 day free trial) was that all the information I needed was FREE right there on the website. There are no hidden fees, subscriptions or dues. AND I didn't have to buy the software before I could access the information or the online forums. Now THAT'S how to run a company! I truly believe that YNAB is the best budget software you can find anywhere. YNAB isn't just about managing your money, it will change how you manage your life!

I have been using YNAB for almost two years now and it has certainly turned my financial life around. In fact, Jesse mentions in one of his blog posts that according to surveys of their customers, the average YNABer makes a $3000 turnaround in their financial life in nine months. That is, they either pay their debt down or build their savings up by that amount.

So head on over to
Sign up for the forums (they're Free!), Read You Need A Budget, the book (it's FREE) sign up for a 7 day FREE trial. Sign up for FREE online classes! You will be glad you did. In fact, you might be like me and discover how to save more than the cost of the software in the first month you use it. For those of you really on the go, there is even an app for iPhones!

YNAB Voted Most Popular Personal Finance Software!

YNAB has been voted most popular personal finance software over at YNAB recieved 50.84% of the votes, beating out Mint, simple spread sheets, MS Money and Quicken. You can read it here at lifehacker

Did you like this review? Was it helpful to you? Do you already use YNAB? If not, will you check out YNAB to see what it can do for you? Inquiring minds want to know!

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