YNAB - the app for a mindful financial life

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

People versed in the topic should participate in the creation of thematic applications. And even better, when a professional does not just advise, but he himself is engaged in the development of the program. This is exactly the case of the YNAB finance application, which we will discuss in this article.

Jesse Mecham and his method of budgeting are familiar to us under the article “Philosophy of YNAB Budgeting”. And today we will talk about the application he created specifically for this system.

I stumbled upon YNAB when I was looking for a smart budgeting app to replace the Family 10 program I used on Windows.

I needed an application that

• when drawing up a budget, it shows how much funds remained unallocated;
• works correctly with debts (they can be paid to the budget);
• on time and in the right place reports the balance or budget overruns;
• Has versions for OS X and iOS with fast sync (YNAB also has apps for Android, Windows and Kindle Fire);
• has a nice design;
• clear and easy to use.

For those who are critical of the presence of multicurrency, YNAB is not suitable. The application only works with one currency.

It is worth saying, before we move on to the instructions, that YNAB is not an ordinary program for keeping track of personal finances. Accounting for income and expenses in this application is a secondary matter.

YNAB's sole purpose is to work on a budget.

The budget in this app is the center around which everything else revolves.

But don’t worry, YNAB also knows how to keep track of expenses, draw up reports and charts on transactions.

YNAB App Basics

At the beginning of working with the application, you need to create a budget, give it a name, enable synchronization (via Dropbox), select the type (family budget or small business) and decide on the data format.

You can create multiple budgets and switch between them. When the budget file is ready, you need to create accounts (1) and categories (2) in the main window:

To create a subcategory, you need to move the cursor over the parent and click on the icon of the plus sign that appears.

The left sidebar does not differ much in content and functionality from the control panel of similar applications. In the uppermost block (4), you can choose to view Budget, Reports or transactions for all accounts (All Accounts). Here you can also see the total balance of your accounts.

The next block (5) shows the accounts, the movement of funds on which is taken into account in your budget, as well as the total balance on them.

It is very important to understand what the accounts are for, which are not included in the budget (6). If you add an invoice-debt or an invoice-piggy bank to the budget, then the application will take into account the balance on them when planning, which will make a lot of confusion in working with the budget. The type of account and whether it is included or not included in the budget is determined when it is created.

There is one more type of accounts - closed (7). When you bought a car from the "Piggy bank for a car" account or brought the debt account to zero, then it is logical to send it to the closed ones so that it does not interfere with you.

The block of categories of expenses and income (8) in its performance also does not differ from other similar applications. But the rest of the blocks are where the magic of YNAB happens.

The magic of YNAB

ribbon(9) helps us navigate quickly through the months. The months shown are highlighted in blue, and the current month has a yellow triangle in the upper left corner. You can click on the past month and see the budget for the past, current and future months. If you expand the window wider, the number of months displayed will increase.

Block 10presents us with a summary for each month:

• Not Budgeted in [previous month] - the unbudgeted amount from the last month that went into the displayed one.
• Overspent in [previous month] - budget overspending in the last month, replenished from the displayed one.
• Income for [current month] - income for the displayed month.
• Budgeted in [current month] - budgeted in the displayed month.

Have you noticed that YNAB very clearly shows the "underspending" or overspending of the budget in the past month? It is just as simple with the help of the application that the overspending is replenished from the next month (if you adhere to the fourth rule) or the "underspending" is thrown there. This application capability makes the implementation of the third YNAB rule a matter of seconds and does not limit budget management to one month.

If you only need to know the amount available for budgeting (Available to Budget), then click on it, and the program will remove unnecessary details.

Block 11- the place where the main work and analysis will take place.

The Budgeted column shows the total budgeted amount and the amounts for each category. You can change them right here by clicking on the number. In this case, a sheet icon will appear on the left so that you can make any comments and notes, and an icon for calling the "quick budget" and calculator functions will appear on the right.

Outflows is filled automatically based on your spending. Balance shows the balance or overspending on the budgeted amount. I think you are well aware that the amounts in blocks 4–6 and 10–11 speak of completely different realities. The first group of blocks says how much you have in bank accounts and cash, and the second - free.

But in practice, it took me some time to be guided by the right-wing blocs when making decisions. In short, YNAB is trying to do everything possible so that you treat the budget conscious as spent.

This is how YNAB compares favorably with other similar applications, the concept and design of which made it difficult and inconvenient to make decisions on the basis of a budget.

Another feature of the application is the impossibility of planning income, because the YNAB philosophy recognizes the section of the skin only for the already killed and refreshed bear. To do this, there are two special built-in categories Income [current month] and Income [next month], which cannot be scheduled. This is quite convenient, justified and reasonable if you are practicing the fourth rule. And the fourth rule itself is just a godsend for freelancers or people who do not have a clear rate.

But what if we are just on the way to the implementation of this rule? The way out is very simple:

1. Create a category "Income" and the subcategories you need.
2. Drive into them the amount with a minus sign (negative).
3. Everything. You have planned income, but the amount can be easily changed if it turns out to be different.

One of the reasons why YNAB is the best app on this topic for me is because it is easy to budget for debt repayment. It would seem that everything is very simple: an account with a negative balance is created, and a transfer to this account is planned in the budget. But to my surprise, no app I tried other than YNAB had this simple solution.

In YNAB, you will need to create a debt collection category (or for each debt separately) and plan expenses for it. And in fact, conduct a transaction from a budget account to a debt account with an indication of this category. Not perfect, I agree, but other applications didn't even have such a solution. And since we have already started talking about transactions, let's figure out how it's done.

Working at YNAB with income and expenses

To create an expense transaction, click on the Add a new transaction button, to transfer from account to account - Make a transfer in the window of the selected account.

As you can see, when you select an expense category, the amount that you can spend according to your budget is shown to the right of each of them. By choosing Split in the categories, you can create a "check" from several categories.

You can schedule transactions for the future (Scheduled Transactions) or perform group actions on already committed ones.

Tablet apps have the functionality of desktop versions, except for the ability to create categories. Due to the fact that they are free, but very easy to use, you could only get by with them without buying a version for Mac or PC. But this limitation is not difficult to get around.

has a 34-day trial period with full functionality. During this time, it is quite possible to create all the necessary categories, synchronize and safely use only the mobile version in the future.

I think that getting such a well-thought-out budget management system and a functional application to it for free is a real celebration of life. For those who still want to buy, I advise you not to rush, as there are often discounts on Steam.

In conclusion, I want to say that in the format of an article it is difficult to describe all the possibilities of the philosophy and application of YNAB. Therefore, if you have any questions or have personal experience, write in the comments.