I’ve been playing with the new version of YNAB, YNAB 4. For those of you who don’t know, YNAB is You Need a Budget, my favorite budgeting program. I started out using it in spreadsheet form, now I use their program. I love it. Love love love.
The basics behind YNAB are simple – live off of last month’s income and give each dollar a job. By living off of last month’s income, you’re never sitting and waiting for a payment to clear so you can pay your bill. You have a cushion. But wait, where did the cushion come from?
Let me make it simple. Let’s say I get paid on the 1st and the 15th. So on June 1st and June 15th, I get paid. But I don’t spend that money. It sits in my bank account until July. So when a bill comes on July 14th, I don’t have to wait til July 15th to pay it. I have the money. What money? The money from the earlier paychecks.
No, YNAB doesn’t give you that money. If you’re currently living paycheck to paycheck, you need to build up a buffer. They explain it much better than I do on their site, but I know what you’re thinking. How in the world can I save a whole month’s worth of income. Well, first off, you just need to save a month’s worth of expenses, so that’s slightly less money. And by giving each dollar a job and figuring out where your money is going, you will find that the buffer builds up faster than you would think. It took me a few months to get to that point, but I’m so glad I did.
So you already use YNAB and you want to know what I like about v4?
Well first off, the interface is SLICK. I love it. YNAB 3 was great, but 4 is shiny and wonderful.
The other big highlight for me? Cloud Sync through Dropbox. I have an Android phone, and I was able to sync YNAB 3, but I had to manually do it. And I always forgot. But with YNAB 4, I don’t have to worry about being out and not having access to my budget. I can quickly pull up the app and see how much money I have available to spend on groceries (or clothing or whatever I happen to be shopping for) and stay on budget with no trouble. I haven’t actually used it yet (hooray for no surprise shopping), but I know it will be getting plenty of use in the future.
I’ve never been a big user of the reports feature, but I like the net worth report. I think I’ll be using that one much more often. There’s also a new Profit & Loss report option. This I love. I’m a spreadsheet geek, and I love having everything all in one place to easily look at.
YNAB may not be for you. But I have been using it for a few years now, and I love it. I love the concept, I love that everything is easy to find in one place, and I love how it helps me keep on track with my budgeting. So check it out!
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.