How I Manage My Family’s Finances: A YNAB Review

A few months ago I revamped the way I manage my family’s finances to use a software called  You Need a Budget or YNAB. It’s the third system I’ve used since I began tracking expenses in an Excel worksheet. I’m sharing this YNAB review to explain  why I love the system I’m using, but you’ll understand it better if you know where I’ve come from.

My History with Expense Tracking

Starting on March 13, 2003 (as in almost 10 years ago to the day) I kept a checkbook register in Excel to track our spending. It tied in to a worksheet where I could project our cash flow out for 6-12 months. I took time every single Friday to update our numbers and look ahead, even as our debt mounted.

An Excel-based system

Then in June 2006 when we decided to get out of debt we enhanced my Excel-based tracking system because I didn’t want to spend the money on something like Quicken. We’d come to realize that  the budget we had been using was deceiving us  and we needed to better plan for life’s expected expenses like car repairs and medical bills. I set up a fancy ledger and a handful of pivot tables for the purpose of tracking our cash on hand for designated purposes like vacation, water bill (paid quarterly), home repairs, etc.

Mint.com

Fast forward to the middle of 2009 and my life was crazy. I was working full-time by day as COO for  this Minneapolis-based non-profit. I worked by night on this website. I had an infant and toddler under foot and my husband was a graduate student focused on his studies. Mayhem. I started to find my homemade Excel-based system unmanageable. I no longer had time to manually key in every expense and tweak the reports and charts like I had in the years prior.

I was thrilled to discover Mint.com. I started using Mint to track our household expenses, but I still wanted the ability to project our cash flow into the future. I also wanted to continue tracking cash balances for designated purposes, even though the money was all stored in one giant savings account. Mint couldn’t handle the forward-looking cash flow planning that I wanted, plus I was dissatisfied with its handling of cash balances.

In early 2012 I abandoned Mint.com and returned to my trusty Excel worksheet because it gave me a more complete financial picture.

You Need a Budget/YNAB Review

In October I downloaded  You Need a Budget’s free 34-day trial  and within a week I upgraded to the paid version; it is a $60 one-time fee. I’d always balked at paying for software to do something I could do for free in Excel, but YNAB, as they call it, is worth every penny.

Let me a YNAB review to explain the six reasons why I love it and have started shouting its praises from the rooftops (including giving it a thorough mention in  Pocket Your Dollars the book).

Expense tracking.  You Need a Budget  provides the expense tracking functionality I appreciate about Mint.com. Granted, YNAB doesn’t auto-sync with my bank account, BUT I don’t have to manually key in my expenses either (which is what I was doing in Excel). In less than 2 minutes I can download and import my transaction history.

Planning for the future.  YNAB allows me to project my cash flow into the future. I have officially abandoned my cash flow projections in Excel for both my family AND my small business. I handle them both within YNAB.  Some small businesses have abandoned Quickbooks all together and use YNAB as their complete accounting solution.

Makes saving easy.  Setting aside a little bit of money each month for expected, but non-routine expenses is a cornerstone to living a debt-free life. YNAB expects you to do this and makes it easy to account and track your money toward various purposes. (This is my most favorite thing about the software, by far!) This works well combined with the free Capital One 360 savings account I use for our emergency fund as well as savings for non-routine expenses.

Helps you avoid future debt.  Once you get fully set up in YNAB you won’t spend according to your bank account balance. Instead, you’ll live by the  “available to budget”  number within You Need a Budget. Money is no longer  “available to budget”  once you’ve designated its purpose,  even if  you’ve not yet spent it. It makes saving easy, which is a restatement of point #3, but important enough to be repeated.

Great training and Customer Service.  After you download the free trial, then check out  YNAB’s support center  –  it’s ginormous. You can watch videos on demand, attend a free live webinar, browse the FAQs or ask a question in the support forum. You should be able to get every question you have answered. I love it.

Monthly reconciliation.  Just like I’ve grown used to in Quickbooks, where I keep Pocket Your Dollars’  books, I can reconcile every account at month-end. I love knowing that everything balances and is accounted for. My Type A heart sings every time I do it.

After I discovered You Need a Budget I recommended it to a friend who is a single mom on a tight budget. She was working multiple jobs and felt like money was slipping through the cracks because of her poor money management system. She said YNAB has made a  huge  difference. When she told me that, then I knew I wanted to tell all of you about it too. I hope it makes a difference for your family.

YNAB coupon

If you’re interested in trying You Need a Budget, then download the free 34-day trial. Then, if you decide to buy a copy right after your trial is complete, then you’ll save $6. If it’s been more than a day or two after the trial expires, then come back and click through this link to save $6. No YNAB coupon code is required.  You can get the discount to initiate your actual purchase via this link (the free trial can be downloaded from anywhere).

As always, I’m interested in hearing from all of you. How do you manage your finances? What works with your current system and what would you like to improve?

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