You need a budget!  This is the assertion of the envelope budgeting software called YNAB Pro.

I chose YNAB Pro as my budgeting system over a year ago and I couldn’t be happier!  YNAB makes managing my finances a snap saving me a ton of time over the systems I used in the past.

My budget helped my wife and I become debt free except for our mortgage.   We paid off over $28,000 in debt in about 20 months!  I sleep a lot easier now knowing all we owe on is our house which we will have paid off in the next 4 or 5 years.  We never could have done it without a budget. 

Ask yourself, “How would it feel to not owe anyone in the world a dime?”

Welcome to My Visual Tour of YNAB Pro

YNAB Pro is a fantastic system!  It does everything I need and more.  I wholeheartedly endorse this system.  Of course, you don’t have to rely just on my word.  You can read the hundreds of customer testimonials on their site!

If you are looking for a personal finance and budgeting system, you can’t go wrong with YNAB Pro.  Want to learn more?  Great because I’ve put together a brief visual tour of the software that I’d like to share with you.

YNAB Pro Will Help You Get Control of Your Money

There is no doubt in my mind that a well organized budget is essential to winning with money.  YNAB Pro will absolutely give you the tools you need to put you in charge of your finances.  As far as I’m concerned, it is one of the best investments that I ever made!

You can visit the YNAB website to learn even more!

Disclosure:  I make a small commission if you visit the YNAB site by clicking one of the links above and decide to buy YNAB Pro.  The proceeds support this site.  However, I would endorse YNAB whether I made money from it or not.  I firmly believe it can help you get control of your finances and win with money.  It has certainly helped me to do so!

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:

1. Stop Living Paycheck to Paycheck
2. Give Every Dollar a Job
3. Prepare for Rain
4. 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

How we track our finances now.

In Mvelopes, we created an envelope for each of our spending categories.  We also have a spending plan or budget where we forecast our spending in each envelope.  For some of the envelopes, like groceries, eating out, and miscellaneous, my wife withdraws the money from the checking account every two weeks.  We then use this cash to pay for purchases in these categories.  For some of our expenses, like the mortgage and utilities, the money gets withdrawn directly from our account automatically.  We assign each of the transactions from our checking account back to an envelope in Mvelopes.  This helps us to plan and know exactly how we are spending our money.

We use three different types of envelopes.

We have envelopes that work in a few different ways.  Some of our envelopes get zeroed out every month.  An example of this is the mortgage envelope.  We know exactly what our mortgage payment is going to be every month so the exact amount goes in and comes out each month.  We never build up or carry a balance in this envelope.  The expenses like this are easy to track.

However, other envelopes do carry a balance.  For instance, the envelope we use for auto fuel is funded a certain amount every month, but the amount we spend for fuel varies.  Also, we don’t withdraw this money from our checking account because we pay for gas with our debit card.  So, we need to be able to keep track of what we spend and the balance in these types of envelopes from month-to-month.  The balance in these envelopes needs to carry forward to the next month automatically without our intervention.

The final type of envelope is not really used to track expenses at all, but rather to keep track of savings.  An example of this is our emergency fund.  We just became debt-free except for our mortgage a few months ago so, we are now building up our emergency fund.  We set up an envelope for this and each month according to our spending plan, we deposit the appropriate sum of money in this envelope.

Where the problems arise with tracking our envelopes.

As I said earlier, everything seemed to flow smoothly for us initially.  Mvelopes would automatically download our transactions from our checking account at the credit union.  When we logged in, it would notify us that we had new transactions and request that we assign them to the appropriate envelopes.  However, after our credit union did an upgrade to their system, Mvelopes was no longer able to automatically download new transactions for us.  This means that we now have to manually enter the transactions which causes us to get behind.

The other problem with Mvelopes that we can’t figure out is that sometimes an envelope gets out of whack and there doesn’t seem to be a way to make a simple adjustment.  We have had a few situations where we just wanted to zero out an envelope or we wanted to enter an adjustment because we knew the balance in the envelope was wrong.  Well, the software doesn’t seem to let you do that.  If a balance exists in an envelope, it forces you to transfer that balance somewhere.  You can’t just enter an adjustment that changes the balance in an envelope without it affecting something else.  I understand the reasoning behind this, but it doesn’t really work with real life and it annoys me.

What I like about our present system.

One of the things that I like about Mvelopes is the way it allows me to create my spending plan and then use that to fund my envelopes on a regular basis.  I also like that it is an online system which means that I don’t have to worry about backups.  Mvelopes is also fairly easy to use.  You don’t have to be a computer genius to figure it out.  They have online help and tutorials that answer most of the questions that have arisen. 

What I want in a finance tracking system.

Since I’m asking for ideas, it only makes sense that I tell you what I want the system to do.  Here are some of my thoughts:

1.  It should support the envelope system of budgeting.

Overall, I like using the envelope system of budgeting so, whatever I move to has to support this approach.  This is why we chose Mvelopes in the first place.  It is built solely around this methodology.  I’d like a system that either recognizes the concept of envelopes or at least can be configured to emulate the behavior.  If the system isn’t designed around the use of envelopes, then I’d like to see or be told how someone else set it up.  I don’t want to have to recreate the wheel to get it to do what I want.

2.  I want a software-based system.

I suddenly realized that I might be assuming that everyone thinks like I do and likes software.  This is probably not the case.  I’m sure there are some out there that still like to do things by hand.  I am not one of those.  The system I choose will have to be software-based.

3.  It needs to have a way to automate the loading of transactions.

I think that if Mvelopes still automatically downloaded our transactions or supported a methodology where we could easily upload our transactions instead of having to manually key them, then I probably wouldn’t be looking for an alternative system.  I’m not picky about how the system handles this as long as it is easy and eliminates the manual entry.

4.  I need to be in control.

I want to be able to enter an adjustment in one envelope without it affecting any other envelope or account.  I want more flexibility than I have now within Mvelopes so that my financial management system can adapt to real life.  Unfortunately, things in the real-world get kind of messy and complicated at times.  The system needs to give me the control I need to handle the unusual circumstance.

5.  It needs to be easy.

A system that requires a doctorate in computer science to operate will not work.  I believe that one of the keys to financial success is consistency.  It is impossible to consistently manage your money with a system that is difficult to use.  By nature, we humans avoid things that are painful or difficult.  I don’t want to dread using the system.

6.  Some decent reports would be nice.

I don’t use a lot of reports, but a few decent ones would be nice.  It is great to be able to print out a copy of the budget or the balance in each or our envelopes.  Occasionally, we like to print a register of transactions by envelope for a specific date range to analyze a situation.  Other than that, we don’t typically get too fancy with reporting.

Please let me know ideas on a new system.

I hope this is enough information to give you an idea of what I’m looking for in an alternative to Mvelopes.  I am very interested in how others are doing this.  I sincerely hope to find something that is easier for my wife and I to use and that takes less of our time.  Once I come up with a new system, I will post an article letting everyone know how it works for us.  Hopefully, there are others out there that can benefit from what I learn.

Please feel free to let me know your suggestions by leaving a comment below or you can email me at jeff(at)mysuperchargedlife.com.  Thanks!

Photos by Gunnar Wrobel and David Boyle