In early June, I asked my readers to help me find a better way to track my personal finances. In the article, I explained how I was using Mvelopes Personal and the issues I was having with it. I really like the envelope budgeting system so, I wanted something that would fit this model. I also listed the other features that I was interested in for the new software. For instance, it needed to have a way to import my transactions from my credit union’s online system. This was one of the key problems I was having with Mvelopes.
I got a lot of great suggestions when I asked for help and I want to thank everyone for their responses. I reviewed each system carefully and finally made a decision. I chose You Need A Budget (YNAB) Pro at the recommendation of Lynnae at beingfrugal.net. Thanks Lynnae!
The YNAB rules for personal finance.
I knew right away that YNAB was a little different the minute I visited their website and read their Four Rules. The Four Rules define an awesome philosophy for managing your money and the software is designed specifically to support these rules. The rules are as follows:
- Stop Living Paycheck to Paycheck
- Give Every Dollar a Job
- Prepare for Rain
- Roll with the Punches
I liked the rules as soon as I read them. They certainly meshed well with the way I want to manage my finances. The Four Rules are explained very plainly on YouNeedABudget.com. I especially recommend watching the short videos. They will give you a good look at the software, how it operates, and how the rules apply.
YNAB really wants to help you do better with money.
The cool thing about YNAB is that they aren’t just trying to sell you software. They seem to really want to help you improve your financial situation. For instance, they offer a free budgeting course that explains the reasoning behind their philosophy and how to implement their software for maximum benefit.
They also include a book when you purchase the software that explains the methodology. These are excellent resources if you are just getting started with budgeting. I highly recommend taking the course and reading the book. You will definitely learn things that will help you see your finances in a new light.
YNAB offers two versions to fit everyone’s needs.
The next step for me was determining which version I wanted to buy. The regular YNAB is a spreadsheet-based budgeting system. It is compatible with Excel, OpenOffice, and NeoOffice (Mac). You can think of this as the “lite” version of YNAB. It is sold for $19.95.
I determined right away that I would need YNAB Pro because it supports the ability to import my banking transactions. It also includes the ability to split transactions into multiple budget categories, to run reports, and to automate recurring entries. These were all features that I wanted. I bought YNAB Pro for $39.95 knowing that I had a 60-day money back guarantee just in case.
The YNAB purchasing process.
YNAB is purchased online from the website. The author uses Google Checkout or PayPal to complete the transaction. I used Google Checkout. After completing the purchasing process, I started receiving multiple e-mails confirming my transaction.
I got a little confused at this point. I received several e-mails, but none of them told me how to download YNAB Pro. My problem was that I expected to immediately be given the information I needed to get started. You do not get this right off. However, it does arrive in your inbox if you are just patient. I just got a little antsy, but after checking around, I found some information that told me to just wait. It wasn’t long and I received the e-mail I needed. In my opinion, this process could have been explained more clearly up front, but it wasn’t a big deal.
YNAB Pro was easy to set up and start using.
YNAB Pro includes a great help file with a step-by-step procedure for getting things set up. I recommend following their advice. It didn’t take me long and I was very pleased with the ease of getting it configured. Here’s the main steps that I took.
1. Create budget categories.
The first thing I did with YNAB Pro was create my budget categories. This was very easy. I was able to simply mirror the categories that I had in Mvelopes. If you haven’t ever set up a budget, then this might take you a little longer. The process in YNAB couldn’t be easier, but you will need to take time to figure out all the categories where you spend your money.
2. Create accounts and enter beginning balances.
The next thing I did was create accounts for checking, savings, and a few accounts that I have at ING Direct. I then entered beginning balances for each of these accounts. I entered the beginning balance in my checking account as supplemental income in YNAB so I could assign it to various budget categories. This was necessary in my case because I had some balances in various envelopes that I needed to carry forward.
3. Start entering transactions.
Finally, I tested exporting transactions from my credit union’s online system. I performed a date-range search in the credit union’s system to narrow things down to the transactions that I needed to import into YNAB. I then exported these to a file in Quicken format. I switched over to YNAB and easily imported the transactions. Everything comes over beautifully. All I have to do is assign each transaction to the proper budget category. This is as easy as picking a category from a dropdown list. Yea! The main problem I had with Mvelopes is solved!
4. Copy your budget forward for next month.
Another nice thing about YNAB Pro is that it allows you to copy your budget forward each month. Of course, you still need to tweak the amount assigned to each category for the new month to allow for variations in spending, but this sure makes it easy!
The bottom line on YNAB Pro.
I’ve been using the system for about a month now without any issue whatsoever. It is very easy and for me it eliminates the monthly cost of Mvelopes. The purchase price for YNAB Pro is roughly equivalent to about three months of Mvelopes service so there is a nice ROI for me.
I am very happy with YNAB! The system is very intuitive, flexible, and it does everything I need. The few questions that I’ve had I have found answers for using Google or by searching the forums at the YNAB website.
I highly recommend YNAB Pro to manage your finances. I am very glad that I found it. I must not be the only one that feels this way because there are a ton of awesome testimonials on the YNAB website. You should check it out!
Photo by Joshua Davis