Best Buy Budgeting software: YNAB (You Need A Budget)

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arbitron

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Several people on AAM have recommended YNAB (You Need A Budget) over the years, so I thought it would be useful to do a summary post and a thread to discuss pros/cons.

YNAB (www.ynab.com) is a very useful tool for tracking expenses and budgeting. It's browser-based and has iPhone and Android apps. The cost is about €90 per year. There is a 34-day trial and college students can get it free for a year.

It takes a bit of time to set up and get the hang of but they have several good guides and video tutorials. We started using it over 10 years ago when we had a lot of debt and needed to get a handle on things so we could save for a house. It completely changed how we view money and plan our finances.

You start off by adding all of your accounts and balances, e.g. current accounts, credit cards. Most banks will allow you to link to YNAB so that you can automatically import transactions. This is one of the most powerful elements of YNAB - once it's set up you have minimal maintenance, it just populates itself and you can approve the transactions in bulk.

You can add transactions manually, e.g. for cash accounts, and you can track loans. We also track pensions, stocks, other assets (e.g. cars, prize bonds), and even the nominal value of airmiles. Multiple people can use the same account and you can have more than one budget. I have used it in the past to help family/friends who needed to get started. When they were ready to move to their own account, we just exported their budget as a CSV and they switched seamlessly.

Once you have accounts and balances added, you can add transactions (or import them automatically) and tag them with categories, e.g. utilities, healthcare, travel. YNAB remembers the categories so when your Netflix charge is imported from your AIB Visa card each month, YNAB puts it in the entertainment category.

The categories and all transactions are searchable, so it's great for doing expenses and tax returns. You can add notes to each transaction, e.g. a booking code for a flight.

YNAB helps guide you with its 4 rules:
  1. Give Every Dollar a Job - assign all income to a category, including savings targets
  2. Embrace Your True Expenses - plan for irregular/infrequent but expected expenses, like annual insurance
  3. Roll With the Punches - re-assign money when you need to, so you can make better choices when money is tight
  4. Age Your Money - moving away from living paycheck-to-paycheck
We found the 1st rule very helpful at the beginning because it makes you really think about your income and re-assess your spending. Say you assign €200 a month to the "coffee" category. YNAB will categorise every purchase from Starbucks, Insomnia, and so on, into that category so you can see in real time if you are staying within the budget or if you are unwittingly overspending. We were surprised at how much we were actually spending on some things, even though we considered ourselves sensible. If you do find yourself overspent in one area mid-month, you can then adjust your allocation and move some of your budget from say "pub", so you are cutting according to your cloth.

The other rules weren't particularly inspiring but some people like them. There is an online YNAB community that can support you to be as nerdy and detailed about it as you like. We are probably on the more basic end of users.

We really like being able to track our net worth - seeing it grow over the years has been both reassuring and motivating. You can also analyse spending visually, e.g. charts of spending by category.

Here is an example of how you can look at your spending:

1715214050151.png

You can really drill down and it's amazing/horrifying to look back over a decade and see exactly how much you spent on petrol, parking, pizza...

And here is the Net Worth graph:

1715214178911.png

The red is liabilities (mortgage, loans) and the blue is assets. The circle is the difference of the two, i.e. net worth. You can zoom in on any month and see the breakdown.

There are lots of different apps that do this, and we tried a few of them, but I really like YNAB. Apart from the app itself, the customer service is very good.

We spend about 1 hour a month between us updating and reviewing, so it's a small time commitment for a big benefit. Once you are set up with auto-import then it really takes care of itself.
 
That's an excellent post, arbitron. You deserve a few years of free subs from ynab for that!!

Is there any app that tracks the charges of pension or investment products? If, for example, you've a decent size pension fund, what is the breakdown of the total expenses in monetary terms?
 
Excellent post there arbitron and thank you I'm sure there are a few people who will find it very useful
I don't use it myself but have been tracking my own spending since the early nineties on paper and on excel since 2005
At first it was just entering figures of expenditure in one of the named column's but ten+ years ago I started to add a little more info about each purchase basically a summarised version of what on the receipt per se because you won't always remember why you spent €200 many years later

But I was laughing to myself this morning when I was reading your post and in particularly this comment
arbitron said:
You can really drill down and it's amazing/horrifying to look back over a decade and see exactly how much you spent on petrol, parking, pizza...
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Because it's so true, last year for the first time, I put 19 years of yearly expenditure into one excel spreadsheet and wow
I was surprised to see somethings like our BB and phone costs come down over the years
Our food shopping has amazingly stayed relative stable at around €3.5k per year
Also how much I've spent on our holidays and my hobbies over those 19 years which shocked me slightly but not unexpected
But it was the Lotto that truly horrified me, although probably low for some people and the fact that I stopped playing in 2012 and only buy the odd ticket now, the figure came in at around €15k with little or nothing to show for it except the disappointment of never winning anything except a couple of Euros
 
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Great post @arbitron I am actually considering the free trial. I'm assuming the one year free is only an option for full-time students in the US? Would YNAB work for a public servant who is paid fortnightly or does it only work for a monthly schedule?
 

YNAB Direct Import in the UK and EU: An Overview

Direct Import is now available for select UK and EU banks. Our import provider TrueLayer has a growing list of supported financial institutions to choose from!
support.ynab.com support.ynab.com

Searching the internet helps; so like, I used "YNAB supported banks" and look what I found, like totes amazeballs dudes!
 
mathepac said:

YNAB Direct Import in the UK and EU: An Overview

Direct Import is now available for select UK and EU banks. Our import provider TrueLayer has a growing list of supported financial institutions to choose from!
support.ynab.com support.ynab.com

Searching the internet helps; so like, I used "YNAB supported banks" and look what I found, like totes amazeballs dudes!
Click to expand...
I found that page too. It doesn't have a list of supported banks on it.
 
But at the bottom of the page there are other sources of information and there's always the option of ringing your bank to ask if they support exportable transaction lists and in what formats.
 
jasdpace@gmail. said:
That's an excellent post, arbitron. You deserve a few years of free subs from ynab for that!!

Is there any app that tracks the charges of pension or investment products? If, for example, you've a decent size pension fund, what is the breakdown of the total expenses in monetary terms?
Click to expand...

I might try entering "AAM" as a discount code on renewal :p

I haven't come across any pension tracker apps. We have to enter ours manually on YNAB.

Fortune said:
Is there a list of supported banks? I'd hate to go through all the setup just to find they don't support someone I use
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For Ireland: AIB, Bank of Ireland, PTSB, Revolut, Ulster Bank are listed. No sign of N26.

If your bank isn't on the list but allows you to export your transactions then you can still do manual batch uploads if they are in CSV format.

PoundMan said:
Great post @arbitron I am actually considering the free trial. I'm assuming the one year free is only an option for full-time students in the US? Would YNAB work for a public servant who is paid fortnightly or does it only work for a monthly schedule?
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Definitely worth the free trial. I got a year free when I was a student in Ireland, just had to email my student ID. That was years ago so the process may have changed.

I have a relative who is paid fortnightly and it works for her but there are some quirks as it's really designed for monthly pay. I helped her set it up and use it for the first few months and I did find it a bit trickier but we got used to it. She still finds it good as she was struggling to match up 26 payments with 12 billing cycles and this allows her to visualise it all.
 
Thanks for that post. I also find it difficult to work these types of things with fortnightly pay.
Can you manually change how much something cost? In Revolut it bothers me that it tells me I spent €100 on something,even if I did a split bill and someone paid me back €50. I could be wrong, maybe they've fixed that. But I know sometimes people just send me the money, don't wait for a split bill and that def messes up the numbers. Can you override it? Thanks.
 
Khublei said:
Thanks for that post. I also find it difficult to work these types of things with fortnightly pay.
Can you manually change how much something cost? In Revolut it bothers me that it tells me I spent €100 on something,even if I did a split bill and someone paid me back €50. I could be wrong, maybe they've fixed that. But I know sometimes people just send me the money, don't wait for a split bill and that def messes up the numbers. Can you override it? Thanks.
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Yes, you can edit everything, even if it's an automatic import.

You can also split transactions, so say you spend €100 in Circle K, you can allocate €20 as phone credit, €20 as lottery, €20 as groceries, and €40 as petrol.
 
PoundMan said:
Great post @arbitron I am actually considering the free trial. I'm assuming the one year free is only an option for full-time students in the US? Would YNAB work for a public servant who is paid fortnightly or does it only work for a monthly schedule?
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I am paid fortnightly and have no major issues. The YNAB philosophy is to ask yourself "what does this money need to do before I'm paid again?", whether you are paid monthly or fortnightly it doesn't really matter. With fortnightly pay you will probably end up 'half funding' categories more frequently (and funding the balance when you're paid again) but that's workable for me.

Once you are what YNAB calls "a month ahead" the pay cycle becomes irrelevant - you end up using what you are paid in May (say) to assign to spending in June; in May you are spending money received and 'assigned' in April.
 
Maybe before getting hung up on what the software will / won't do, it could be useful for some of us to get back to basics and remind ourselves what the process of formulating a budget helps us achieve, starting with the steps in the ordered lists below. I followed my advice and typed "making a consumer budget" into a search engine and this was one of the first links that popped up

That particular site I chose is exceptionally good - straightforward, aimed at consumers so no techno-babble or highfalutin, econo-chat to confuse and deter the learners at whom it is aimed.

The links are from Managing Your Money a US Government website aimed at consumers. The site has no copyright notices posted and in any case I haven't copied any material from the site, I simply posted links to parts of it, which the authors encourage. Please feel free to pursue other parts of the site that pique your interest once you're happy you have the budgeting basics off pat. If the mods are concerned about possible infringements, please check again for notices I might have missed or check directly with the registered owners. I don't want to be the one responsible for the US launching a nuclear strike on AAM HQ from Mayo, God help us!.

Remember that installing a word-processing program on your device will not in and of itself turn you into the next Nobel laureate for literature, producing for you on-demand high-quality documents and text - you must put the brains, blood, sweat, and tears into the creative process. The paragraphs linked below hopefully explain what you need to do to make a budget and track how good your planning and execution are and how well the budget tracks reality and helps manage the peaks and troughs of personal financial planning.

  1. Making a Budget​

    1. What is a budget?​

    2. Why do I want a budget?​

    3. Why should I try to save money?​

    4. What To Know

  2. How do I start a budget?​

    1. What if I don’t get paid every month?​

    2. How can I use my budget?​

    3. Why should I save money?​

    4. How else can I save money?​

3. What To Do​

    1. How do I make a budget?​

    2. How do I use my budget?​

 
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Personally I would never use cloud based, subscription based software to track my finances. You really don't have any idea what these companies are doing, or will do, with your data. What happens if the company is sold five years from now? Consider how f'ed you are if your entire financial history and account information is leaked online.

I would only use budgeting software that is buy-once-own-forever and offline with no data exchanged between your pc and another server. The convenience of cloud based tools just isn't worth the risk IMO. Only last week Dell sent me an email admitting a data breach in one of their databases holding my personal details.
 
theObserver said:
Personally I would never use cloud based, subscription based software to track my finances. You really don't have any idea what these companies are doing, or will do, with your data. What happens if the company is sold five years from now? Consider how f'ed you are if your entire financial history and account information is leaked online.

I would only use budgeting software that is buy-once-own-forever and offline with no data exchanged between your pc and another server. The convenience of cloud based tools just isn't worth the risk IMO. Only last week Dell sent me an email admitting a data breach in one of their databases holding my personal details.
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I have a similar mindset.

For anyone that is tech savy, you can set up a self-hosted docker container of Actual for free. They have steps for installing via Docker. As I said, this is really only for people who are comfortable either with Docker or alternatively Linux command line.

You'll see from clicking around the Actual website, it is a YNAB alternative, that is free, open-source, and stores everything on your device. It's pretty feature rich. I believe they are also currently testing Open Banking synching in a beta version - i.e. allowing real-time display of your bank account transactions.

I've been using it for a while now and have found it pretty good.
 
another free alternative is An Post Money Manager - you don't need to be an An Post banking customer to use it. It certainly works well for tracking and categorising your spending across multiple banks. I haven't really delved into the budgeting features.

I have used YNAB in the past and found it to be too high maintenance, though at the time you had to add your own transactions as they didn't connect directly to European banks.
 
shweeney said:
another free alternative is An Post Money Manager - you don't need to be an An Post banking customer to use it. It certainly works well for tracking and categorising your spending across multiple banks. I haven't really delved into the budgeting features.
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It's quite limited in the banks it supports, so may not suit everyone.
 
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