Finances

Yes, You Need a Budget (YNAB Review)

Disclaimer: This will not be a post detailing the four rules of YNAB or how to use it–for that, I recommend reading the YNAB site and watching YouTube videos like this one. Instead, this is detailing my personal experience with the app.

Well, folks, I have drank the Kool-Aid. The YNAB Kool-Aid, that is. It is a cult and I am proud to be a member.

Image by Icons8 Team on Unsplash

I have been conscientious of my money since I became semi financially independent from my parents (I say semi because I live at home), which coincided with me getting into medical school. Suddenly I was staring down the barrel of a minimum of $100,000 in tuition fees over the next four years. That was, and still is honestly, a number so large I can’t even really conceptualize in my mind what that means. To try and put that into context, it is equivalent to 28 of the cheapest Chanel 2.55’s, and maybe half an undergraduate degree at Harvard.

Education is expensive, y’all.

After loosely tracking my expenses in the fall, I didn’t really feel in control of my finances. I flirted with the idea of using Mint, which seemed to be the answer to my situation–a free, digital interface that would enable me to track where my money is going, but I didn’t love the idea of linking my bank account to an app. Back to the drawing board we went.

When I searched for other solutions, I found that plenty of people recommended an app called You Need a Budget, affectionately known as YNAB (pronounced why-nab, if you were curious). What intrigued me about this recommendation was that people would often say that this app had changed their finances forever, subsequently changing their life. Everyone’s tone was full of certainty that this app was what had enabled them to save up for their down payment or pay off debts.

The concept of the program is simple: you can only spend the money you have on hand right now. It’s a digital version of the popular envelope budgeting method, where you assign different categories to envelopes and put some cash in them.

In the spirit of New Year’s Resolutions and all that, I resolved to give it a try. So on January 1st, I plugged away at using YNAB. I’d read some advice and watched some YouTube videos on how to use it, but I still felt wary, because I’d heard there was a huge learning curve with the program. I tentatively filled in my budgets for different categories, thinking to myself that it didn’t seem like it would be too difficult–or too different than other personal finance programs. Did I mention that YNAB costs money, too? $84 USD ($107 CAD) for a year. Was this really a life-changer? I had my doubts.

Flash forward to today, and I can confidently say that yes, YNAB is a life-changer, and here’s why:

  • It’s cleaner than a physical envelope budgeting system. You can have as many categories/envelopes as you want, and it’s all there on your digital surface. No need for messy envelopes running amok.
  • Similarly, you can use credit cards. The usage of credit cards is a hot topic in the personal finance community, but regardless on your take, the option to use credit cards with YNAB is there while still embracing the envelope budgeting method. Sure, you could still make it work with physical envelopes, but it’d be messier.
  • It’s flexible!! My perspective of budgeting was that it was rigid, and I couldn’t move money around once I had set it for the month or else I was a failure. It didn’t matter if my phone broke unexpectedly, because I had no money dedicated to technology repairs that month, my budget had failed. YNAB understands that there’s no such thing as a perfect budget, and that rolling with the punches is a key part to sticking to your budget.
  • My finances are more organised. Instead of looking at my bank account and vaguely registering that I have $1,000 to spend on eating out if I wanted to, I know that actually, I only have $100 allocated to eating out. $900 is for rent (hypothetical examples). I could have $900 in my bank account, but if my eating out envelope is $0, there’s no eating out until I can re-fill that category. Some people do something similar by creating multiple bank accounts, but see: messy point above.
  • You’re in control. The way YNAB is built forces you to manage your money in a way that ensures you’re in control of your finances. You have to actively make decisions about which categories you want to allocate your money to, but then there’s no guilt when you take money out of ‘clothing’ to buy a pair of shoes that you don’t need.
  • I believe in the company. I believe they want to help you with your finances. Their customer support is great and they have lots of helpful blog posts, videos, and success stories to educate and keep you motivated!

Similarly, though YNAB costs money, they give you a free 34 day trial to test it out before you have to pay–and, if you sign up using their website, they don’t ask for your credit card information so there’s no sneaky paying! Even more fantastic–if you’re a student like I am, once your free trial is over, you get one year for free. This may sound like an ad, but like I’ve said, I’ve drank the Kool-Aid.

Yes, there’s a learning curve. Yes, it costs money. But it will change your life.

x B

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