If you’re in debt, have little in savings and are not investing for the future, there’s a better-than-even chance the fundamental problem is the lack of a budget. If you’re going to implement one, it’s best to go with an automated system that will make the effort as easy as possible. YNAB is a popular and well-respected budgeting app, and $6.99 per month is a seriously small price to pay for a tool that could literally be life-changing.
The 34-day trial makes it hard to pass up. That will give you enough time to set up the app, become comfortable with it and see the results of at least a month of budgeting. There is no obligation (no credit card is required), and your data will be wiped clean once you end your participation.
Many apps offer budgeting as an add-on feature, which has to make you wonder exactly how effective it is. But budgeting is all YNAB does, which is the reason for the multiple revisions of the app. They’re constantly working to make it more comprehensive and user-friendly.
YNAB is a comprehensive budgeting app that’s perfect for getting on track with your monthly spending and tackling debt. However, there are several YNAB competitors that might be better fits depending on your financial situation and goals.
Highlights
Personal Capital
YNAB
Pocketsmith
Rating
9.5/10
8.5/10
7/10
Budgeting
False
True
True
Investment Monitoring
False
True
False
Retirement Planning
True
False
True
Bill Payment
False
False
False
Manual Entries
False
True
True
Bill Management
False
True
True
Personal Capital is one of our favorite alternatives since it offers numerous free budgeting tools as well as an investment fee analyzer tool. And customers with $100,000 or more to invest can use its Wealth Management service and create an investment portfolio that matches their goals. Plus, Personal Capital also has numerous retirement planning tools.
As for PocketSmith, it offers useful forecasting tools that help you visualize how your spending habits impact your net worth. It also has a host of budgeting tools and calculators like YNAB. It also has a free plan that lets you test the waters with two accounts and manual transaction importing.
Pros & Cons
Pros
34-day free trial
Available on multiple platforms and has a mobile app
Automatically sync your transactions
Create multiple budgets
Helps you tackle debt
Track multiple financial goals at once
Cons
There isn’t a free YNAB plan
The app requires a bit of learning to use all its features
YNAB has revamped its pricing structure, and it now charges $14.99 per month with the monthly plan and $98.99 for the annual plan. According to its website, YNAB users save $600 within their first two months and more than $6,000 in their first year on average.
Paying $14.99 per month isn’t much to pay for a well-regarded budgeting program. You’ll almost certainly save more than that several times over just as a result of the greater discipline the budget will impose on your finances.
We can also assume the service will be more cutting edge when there’s an ongoing fee hanging in the balance. That’s why paying a small fee for a service is often better than getting it for free.
They do offer a 34-day free trial exclusive to Investor Junkie to help you decide if you like the service. They won’t collect your credit card information during the free trial because, in their words, “It’s lame when companies do that.”
YNAB’s last version was YNAB 4, which was a simple desktop-based application. With the new edition, YNAB has been rebuilt from the ground up. It’s now an online application that can sync with your desktop application. You no longer need to manually enter your transactions, and it makes the service more on par with Mint and Personal Capital.
Some of the “Rules” have changed. Gone is “Save for a Rainy Day” as Rule #2. It’s been replaced by “Embrace Your True Expenses” as described above. The thought was to go broader than just saving for certain expenses and to focus instead on going beyond your regular monthly expenses.
Rule #4 used to be “Live on Last Month’s Income,” a rule designed to keep you at least one month ahead in the budget process. Officially, there’s no longer a Rule #4, but its focus is now included in “Age Your Money and Extend,” which goes beyond getting ahead of the budget process, to investing your money. The basic concept is to expand the time between receiving income and spending money, to enable you to get ahead of your expenses.
Some other features in the New YNAB include:
Seamless Sync — You no longer need to access Dropbox to use YNAB; it is now entirely web-based. Changes made to your account on one device will automatically carry over to other devices.
Direct Import — You can now import transactions from your bank into YNAB; you no longer need to first go to your bank’s website to start the process.
Goals — YNAB will now make budgeting recommendations to help you reach your goals, whatever the goal is.
Category Inspectors — This involves a wider number of color codes to help you see when a category is underfunded (yellow) or when overspending has occurred (red). It will help you quickly visualize potential trouble spots in your budget.
The Inspector — This feature allows you to see summary information about your budget, as well as provides quick options. It will let you know, for example, if you’ve budgeted enough money for an upcoming expense or not.
Loan Calculator — Use YNAB’s loan planner tool to calculate interest and time savings for each dollar you put towards becoming debt fre.
Spending & Net Worth Reports: Get a visually appealing breakdown of your net worth and also your different spending categories.
Multiple Budgets: Budgets can automatically categorize expenses with YNAB, but you can also create multiple budgets and split transactions for accurate tracking and record keeping.
YNAB allows you to automate your budget and is now web-based. The newest version allows you to take live online courses to learn how it works. They also offer several “Extra Helpful Help Guides” that include both written and video instruction and cover the following topics:
User Handbook — This is the general intro to YNAB, how it works and what it does.
Transition Guide — If you currently have YNAB 4, this will show you how to make the changeover to the new version.
Learn to Prioritize — This guide is the first of the strategy guides, and it focuses on exactly what the title implies.
Think Long, Act Now — This guide shows you how to “focus your big goals on today’s small decisions.” Basically, it’s how to reach long-term goals with actionable small steps each day. If you’ve been struggling to achieve long-term financial goals, then this guide is mission-critical.
Deal With Your Debt — Debt is one of the major forces that drive people to use budget software, and YNAB does an outstanding job of explaining the rationalizations that land people in debt, as well as providing strategies to put debt in your past.
Join Forces — The importance of putting accountability behind your financial strategies. You team up with a budget partner and hold each other accountable for reaching your own goals.
Simplify — This guide is all about streamlining your financial life so you’ll have more control over it. In today’s world with so many too-good-to-pass-up credit deals, this is an underrated area.
Age Your Money and Extend — This is the guide that helps you to create extra room in your financial life by saving and preparing for contingency expenses. The idea is to put you permanently in control of your money.
YNAB’s overall strategy is built on three basic rules designed to help you live within your means, get out of debt, save money and stop living paycheck to paycheck.
Rule #1: Give Every Dollar a Job — This rule holds that each dollar in your budget should be allocated to a certain purpose. The idea is to remove unrestricted spending and to impose discipline, order and purpose in your spending.
Rule #2: Embrace Your True Expenses — The overriding philosophy is to smooth out your budget by taking large, less frequent expenses and allocating funds to pay them on a monthly basis. This can include budgeting money for insurance premiums, vacations, major holidays and birthday expenses. The idea is that if you continually budget for these expenses, you’ll have greater control of your cash flow and not find yourself broke in certain high-expense months. Predictability, which is another of the basic YNAB philosophies, is a real stress buster.
Rule #3: Roll With the Punches — This rule makes it clear events will crop up in life that will take you off your financial game. You will overspend in certain categories in certain months. But it also shows you how to just roll with it when that happens. You make changes and adjustments as necessary, moving money from one category to another, then keep going forward. You anticipate disruptions but never let them get you off track on a long-term basis.
YNAB — which stands for “You Need a Budget” — has grown to become one of the most popular budgeting software packages available. If you’re looking for an effective budgeting system, then YNAB may be the app you’ve been looking for.
What Is YNAB?
YNAB was started by a CPA named Jesse Mecham to help him and his wife, Julie, deal with real-life financial struggles. They created their own budget app, one that worked for them. In fact, it worked so well — better than other popular budget apps — they rolled it out to the general public.
The app offers not just the mechanics of monitoring income and expenses, but also provides instructional support to help you deal with the root causes of financial distress. It’s an example of an app that does one thing and does it extremely well.
YNAB Features
Price
Min: $11.99, Max: $11.99, Term: month
Budgeting
True
Bill Payment
False
Investment Tracking
True
Access
Web Based, iOS, Android
Credit Score Monitoring
False
Bill Management
True
Retirement Planning
False
Tax Reporting
False
Reconcile Transactions
True
Custom Categories
True
Import QFX, QIF Files
True
Two-Factor Authentication
True
Online Synchronization
True
YNAB Blog — The blog has dozens of articles on related topics and it’s updated regularly. This can be important since going on a budget involves changing not only habits and behaviors, but also ways of thinking. You’ll need plenty of fresh motivation along the way. The blog delivers that.
YNAB Forum — Everybody needs the help and support that only comes from regular interaction with others in similar circumstances. You’ll find that on the YNAB Forum. Topics include the various mechanics of using the YNAB platform, as well as specific budgeting strategies. This is where budgeting becomes a group participation activity.
YNAB Mobile App — YNAB has a mobile app feature available through the App Store or Google Play. You can use the same login credentials for the mobile app that you do for the desktop version.
Site Security — This is an important issue for anyone using a budget app since your entire financial life could be exposed. To start, YNAB staff don’t access customer data unless requested by the customer or required by law. Passwords are one-way salted and hashed, using multiple iterations of a key derivative function for passwords, making it nearly impossible for a hacker to determine the exact sequence. Data is encrypted, so it can’t be read even if the hard drives were stolen. And when you terminate your account, your data is wiped clean from the database. The infrastructure is built on Heoku, which is the same technology used by the CIA. There’s a lot more on the security front, but you get the picture — YNAB is serious when it comes to site security.
