YNAB Review: Listen, You Need a Budget
- Rachel Cribby
- April 14, 2021
“You need a budget!” may be a phrase that you have heard before, whether it was from a financial planner, a parent, or even from your inner monologue. True as it may be, it can be challenging to set out a budget, let alone stick to one. The good news is that you don’t need to do it alone.
In fact, there are several budgeting apps out there that can help you reach your financial goals. One of the most popular among them is YNAB, which aptly stands for You Need a Budget.
In this YNAB review, we will go over the pros and cons of the software and what makes someone a perfect candidate for this unique budgeting approach.
Table of Contents
What is YNAB?
YNAB, pronounced colloquially as why-nab, is a budgeting software available for various mobile and desktop platforms. Aside from offering a tool to its customers, YNAB also provides a sort of money philosophy that states at its core that “every dollar has a job.”
In the world of YNAB, this doesn’t only mean the money that you set aside for predictable bills every month, but also the money you put into a savings account, as every dollar should have a job (i.e., a purpose). Whether it be for saving up for a car or a house, or for use as an emergency fund, this approach may sound familiar to anyone acquainted with zero-based budgeting.
YNAB also allows its customers who use the app to try it for a 34-day free trial. It costs $84 after the trial period is over.
How does YNAB Work?
The beauty of YNAB is that it can auto-generate payments when synchronized with your personal banking account, which saves you the trouble of having to import transactions.
YNAB is available both as a mobile app and a desktop platform. Once you download the program, it will ask you a few questions, such as whether you will be using YNAB for personal or business use, as well as your currency and date format preferences.
You are then able to sync your accounts (such as your savings or checking account) and either start automatically sync your purchases to the app or input them manually yourself.
The next step is to assign categories to your spending. This will help YNAB present you with any trends and patterns that it sees in your spending and help you create a realistic budgeting system for yourself.
YNAB comes with several premade budget categories, but if these don’t fit with your spending, you can create your own.
Besides offering a financial planning service, YNAB also comes with its own set of money “rules,” which can be more aptly called philosophies.
These are as follows: every dollar needs a job, be honest about your actual expenses, be resilient when you get off track with your spending, and rollover any money that wasn’t spent one month into the next month.
Why Do People Use YNAB?
The main attraction of YNAB is how it can help you visualize your spending habits and identify the areas where you can cut back on spending.
Once you have your transactions synced and categorized, YNAB will compare your real-life spending to your projected spending and let you know where you are off (or on) track.
YNAB is also helpful for users who feel bogged down by debt or who want to break the cycle of living paycheck-to-paycheck, as their paycheck cycle is not always consistent.
Its approach of meeting users where they are financially, regardless of income level, is refreshing to many who may not have felt like they had enough personal capital to benefit from the grandiose goals of other budgeting apps.
Is YNAB Safe to Use?
Safety is a common concern when it comes to any personal finance app. Still, people who use YNAB can rest assured that the budgeting tool is trustworthy with personal information, as it offers a highly-esteemed program.
In fact, as YNAB does not rely on advertising revenue, meaning there is no reason for the program to sell your data. Not even YNAB's staff can access information related to your finances, except if the customer or the rare case requests for them to do so by law. For added security, YNAB encrypts all customer data. It is part of their privacy policy.
YNAB Pros & Cons
Wealthsimple's advantages greatly eclipse its drawbacks. Still, it's important to assess whether or not the investment platform is a suitable fit. Like buying a pair of shoes, you want to make sure both feet fit perfectly and not just the left one.
Pros: The Good Stuff
Cons: The Not So Good Stuff
Frequently Asked Questions
It’s understandable to be apprehensive about syncing your account with the app, and it ultimately will come down to a personal choice of whether or not you feel comfortable. Some of the security measures that YNAB have in place include the encryption of data, an annual security audit, strong password guidelines, and the hidden storage of passwords. YNAB also only works with trusted Direct Import partners.
It is not currently possible to pay your bills through the YNAB app.
“Better” is a subjective word — they’re different! YNAB has a unique approach to money management, and while it works for some users, some people may find Mint’s approach more accessible. To learn more about Mint, check out our review here.
About the Author
Rachel Cribby
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