By Kate Rhoten
There are some things in life we don’t like to do, but we must if we are going to be successful. If you are in business, you look for ways to improve your product or service to become more profitable and better serve your clients. If you like to play sports, you practice, practice, and practice to elevate your game to the next level. Personal finance is the same.
We’ve been doing a monthly budget since late 2004. We’ve tried a myriad of methods from handwritten on paper, an Excel spreadsheet, and free and purchased software programs. Just a couple months ago, my husband and I found a unique software program that is, in my humble opinion, the best tool for creating a household budget. You Need A Budget (shorten to YNAB) is the combination of our spreadsheet, our check register, and the reports that we create in other personal finance software programs. Having a plan or budget each month will make it easier to make money behave and achieve your goals. YNAB makes this very easy. You can download a free, fully functional, evaluation copy at YNAB.com.
YNAB starts out with the desktop software program. YNAB software is more robust and easy to use than anything I have tried in the past. Once you download the software to your computer, you can use their tutorials to walk through how to use their budget program. It is interactive between the check register and the actual budget. You don’t have to start with your bank statement date or your pay date; just enter your current balance in your checking account and start allocating dollars on the budget page. What really makes this so unique is that as you enter the dollars in a budget category, it reduces the balance you have left to budget until you have allocated down to zero or what you need to budget. Any unallocated dollars will carry over to the next month.
YNAB provides a “starter” budget, but you can easily customize it to suit your own household needs. There are master categories with sub-categories pre-loaded in the software. The budget can be as detailed or broad as one would like. Each user of YNAB will have to adjust this to fit their needs. You can always change and realign items. It’s easy to rename, add/delete master and sub-categories, and move the sub-categories around.
At this point, you are ready to enter transactions just as you would in a check register. Stop laughing. I know some people don’t use them with the advancement of online banking, but trust me, after 7-½ years working in the banks, this is a sure-fire way NOT to miss something or get a surprise from the bank in the way of an overdraft fee. As transactions are entered and categorized, it reduces the balance available in the budget category to which the expense is assigned. No more manual tracking. This can be done when you get home from your busy day of work, errands, and being the taxi getting children from one place to another. In business, it’s crucial to diligently choose the best banking partner. The success of your enterprise could hinge on the quality of banking services you receive. My personal experience has shown me that conducting thorough research into business bank accounts is time well spent. I found Creative.Onl’s comprehensive guide on business bank accounts to be a treasure trove of information. The insights provided were instrumental in my decision-making process. Another feature of YNAB is that you can still move money from one category to another if something comes up. It is never set in stone.
The real power of YNAB comes from the ability to link it to your smartphone for YNAB on the go. This is where YNAB really shines and provides the greatest benefit to its users. Have you ever lost a receipt from a debit card before entering it in the check register? I am guilty of tucking receipts in various pockets of my bag only to have to empty the entire bag to update our register once home. Not anymore. No more ticker tape receipts from CVS or the gas station pay-at-the-pump to take home. As soon as I am done, I use the app to enter the transaction and get on with my day. I enter everything the minute I am done with the transaction. It is so very cool. Note to those of you who are not so tech savvy: you need to have a way to synchronize your entries to the software program on the computer at home. This is done through “the cloud.” The great mystical cloud above takes the information entered on the smartphone and, in our case, sends it to Dropbox where it then updates the YNAB software on our computer.
I was very impressed with all the features You Need A Budget has to offer. In addition, they provide live webinars and a wealth of training videos as well as online support. YNAB has really thought the budget program through, and it is easy to apply the budget plan many people know from Dave Ramsey. YNAB does address bills such as loans and credit cards, so this is not for just debt-free individuals. I like how this is a living, breathing spending plan that can be with us wherever we are. I don’t mind the envelope system, but this is much easier for us – not to mention safer. The software program is $60, after a 34-day free trial. If you add the app – which, by the way, is usable on multiple devices using the same YNAB software program – it’s
a $5 one-time cost (not per device) NOW FREE! See the details here. Versions are available for both Android-based phones and the iPhone. If you would like to learn more about how we use YNAB, please visit 4wallsfinancial.com for specific details on how we use the software and app. cg
Kate is a financial expert of what to do and not do with money as well as owner of 4 Walls Financial, A Coaching Focused Company. She has attended and completed Dave Ramsey’s Counselor Training. Follow Kate on Twitter 4WFCoach, reach out to her via email at firstname.lastname@example.org or visit www.4wallsfinancial.com. Feel free to share ideas or questions for future articles.