YNAB: My budgeting tool of choice

3809464245_ee7bf73a55_zSince moving out of my parent’s house more than 20 years ago, I’ve had a general attitude of frugality and practice close management of my money. That’s not to say I’ve never made mistakes. I racked up thousands of dollars of credit card debt in college when I was working in theatre and hardly making any money. I also got myself into significant student loan debt. Fortunately, that’s long paid off and I haven’t had any major missteps since (although plenty of minor ones)!

But I hadn’t found a great way of tracking my day to day spending. I’ll admit that until last year, I still used a checkbook register to note all of my checking account transactions and would reconcile it against a printed monthly statement. I’m the kind of gal who needs to know how much money is in her checking account at all times. I’m not comfortable ball-parking the numbers in my head, like several of my friends and family told me they do.

I’ve also never been too keen on following a budget. Over the years, I just know what I should or shouldn’t spend my money on. I wasn’t earning much while in school and in the years after I graduated, so I had to live modestly. Now that my career is going full steam and I make a good salary, those frugal practices are still engrained in me as I continue to live below my means.

About a year ago, a friend introduced me to YNAB (You Need a Budget). I was looking to modernize my financial tracking system and thought this was worth a try for a small upfront investment (I think I had an online coupon and bought the software for about $40).

I just want to throw in a note that I’m not affiliated with YNAB in any way…I just like what they do and want to share it!

YNAB has a fun, user-friendly website. Their methodology is easy to understand, forgiving of spending missteps, and gives me a sense that they genuinely want to help people be better managers of their money. 

Once I started using it, it didn’t take long to figure out that it was great as a tracking tool and I would be able to throw out my vintage checkbook registers!

  1. I purchased and installed the software on my computer and got the app for my smartphone.
  2. I entered my checking account, credit cards, and Capital One 360 savings as my “budget accounts” since I use those the most.
  3. I entered my Betterment and Roth IRA accounts as “off-budget accounts” since I transfer money into them regularly, but don’t spend from them. I don’t track my 401k or traditional IRA in YNAB.
  4. I created a budget plan, but honestly don’t pay too much attention to it. It’s occasionally good for a check-in to see where my money is going and keep spending in check, but I don’t hold myself to the actual budget numbers.
  5. When making purchases with any of my “budget accounts”, I enter them in the YNAB phone app immediately.
  6. On a weekly/bi-weekly basis, I check my accounts on my laptop, making sure that all transactions are marked off in YNAB when they clear in each account’s website data.
  7. About every month, I do a proper reconciliation of each account and make sure the numbers match up!
  8. I also track my cash spending through YNAB, although I’m less diligent about reconciliation. I often forget to enter transactions for small cash purchases and will then just fudge the numbers to make YNAB match what’s in my wallet.

I encourage you to check them out if you feel the need for some help setting yourself up on a budget, or just want an easy way to tracking what you spend. For a small time investment, it could really be worth it! Their website has tons of resources to help get you started, including video tutorials, forums, and free online classes. Enjoy!

(Image: hadesigns)

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