Budgets. Don’t you just love them? Come on, I know you do! What you don’t love is living paycheck to paycheck, am I right? Two things will stop that cycle: 1. A rock solid budget, and 2. Budgeting software that keeps you on track. Sure, you might be a pen and paper type of budget freak, but I highly recommend getting the RIGHT software to help. And no, it’s not time consuming. I update once a week and it takes 5-10 minutes.
As a reforming shopaholic, the budget is not going away anytime soon, if anything, it will remain a staple in my financial diet. Instead of loathing it as I used to, I’ve decided to embrace it and figure out new ways to make this money tool work FOR ME.
In the spirit of experimentation that I adore, I decided to change things up and give YNAB a go. If you haven’t heard of YNAB, it stands for You Need A Budget and is a new type of budgeting software from the usual Quicken that I was using.
YNAB is designed to get you off the paycheck to paycheck hamster wheel. To give every dollar a job. Or, to stop paying last month’s credit card bills with this months pay.
There are four simple rules with the YNAB method:
Rule #1 Give every dollar a job
Rule #2 Save for a rainy day
Rule #3 Roll with the punches
Rule #4 Live on last month’s income.
QUILTY – The Dirty Little Secret
I am quilty of living on last months’ pay. There’s my dirty little secret. I somehow got on the “use this month’s pay for last months credit card bills” wagon. Let me say, I don’t like it. It had to stop. The aim of YNAB is to eventually have you with a one month buffer of income so you’re not continuously spinning your wheels.
Wouldn’t you love that? I know I would.
The first 30 days, er 28 days.
I’ve been using the software for almost a month now and I’ll admit it has a learning curve. Not to worry, YNAB provides it’s users with an extensive library of how to videos which I have watched – several times in some cases.
What couldn’t I wrap my brain around?
#1 Waiting until I was paid to be able to divvy the money up. Quite often my pay comes at the end of the first week or sometimes, not until the second week of the month. YNAB prefers you wait for your pay to come in before you try to put money to your budget. This was tough for me. In the end, I just put in what I thought my first pay would be and left a buffer just in case it fluctuated.
#2 How it handles credit cards. This is a huge PRO and somewhat of a Con.
PRO – the software stops you from treating your credit card like a bank account. It wants you to get caught up to the current month’s spending and will carry over the balance. Let me say, negative numbers are not pretty. Red and minus signs = No thanks.
CON – well, this is me and my lazy ass I suppose not wanting to change. When you incur new debt (in other words, go over your budget/income), the software requires you to deduct from the card first, then divvy the money up to where you went over. It’s good because it reinforces that this behaviour is bad. Overspending = bad.
So far, I give YNAB two thumbs up. Two of the three credit cards I have are paid in full to be in line with this months spending. Yes, I have three credit cards but ensure I pay them ALL off. Well, occasionally my Visa has a small residual balance. Such as when I have to pay for school or car repairs, such as in July. I don’t like it when this happens, but it does.
The Nitty Gritty
Support for new users, including webinars, videos and online FAQ’s A+
Check out the support library here: Help Docs
I highly recommend starting with the Quick Start Tutorial videos and following along in the software.
Here’s my Top 6 help topics to check out in YNAB if you’re just getting started:
Free 34 day trial A+ – YNAB is available for MAC OS and Windows. Get a month of YNAB for FREE!! Sign up with my exclusive link here.
Easy to learn A – FREE workshops and classes to help you take control of your finances
Mobile support B – I can’t stand dropbox and this is how it syncs to your mobile phone. It is however available for both Iphone and Android.
Discount for first purchase A+ – Update: YNAB now offers a FREE month!
A few more recommendations:
Start at the beginning of a month. Although YNAB says you can start anytime, my OCD brain preferred that I start with a new piece of software with a fresh new month.
For the first little while, when you download transactions, you’ll have to delete them or your balances won’t match up. You see YNAB asks for an initial balance, what it calls “Pre-YNAB debt” and unfortunately your bank’s software isn’t smart enough to know what date that ended at. So I highly recommend making note of the day you load your initial balance and then removing any transactions that were before that date. Got it? 🙂