Do “You Need A Budget”?

There are many money management software packages available, however “You Need A Budget” (or YNAB) has gained significant coverage lately with a loyal following. Not to mention a considerable level of testimonials who swear by it’s use and credit it for their journey out of debt.

Money management is sadly something that is not taught in most schools, many of us grow up not having had learnt the essential life skill. Budgeting is a key part of that, over the years there have been many incarnations of budgeting tools and programmes. In the modern digital world of course, this has progressed and delivered us a multitude of apps and websites.

Enter YNAB or “You Need A Budget”, a service designed to stop you living from pay check to pay check. The core concept is a simple one, give every dollar a job to do, whether that is paying the rent, bills or pocket money. Similar to the old envelope system (Where you put cash in envelopes for each category) the concept is a simple one but it works.

Without budgeting you may end up spending more than you think on certain categories such as eating out, by tracking that spending and setting defined budgets for them it encourages you to be more aware of your spending. The concept extends itself to building up a buffer, with the eventual idea being that you end up spending the previous months pay check. With a months buffer in hand for emergencies and unforeseen circumstances. For those in debit that’s not necessarily so easy but it’s still a useful exercise to more carefully watch your spending and plan paying down those debts, with more data on your spending being crucial to that process.

The software itself has gone through some pretty major changes of recent, moving from a one-off license fee with software you download to a Software as a Service model with a monthly fee. The benefit is an always up-to-date system and easier access no matter where you are.

We can’t fault them for their on-boarding, there are countless introduction videos for new customers helping to explain the concept, software and wider money management. There is also a 34 day free trial, allowing you to give it a try without handing over any money so really there’s nothing to lose.

On a side note, we should highlight of course the core concept behind YNAB can be replicated with a spreadsheet. Indeed there are several free budgeting spreadsheets available including the one mentioned here on Reddit.

The benefit to YNAB over a spreadsheet for us however comes down to the entry of spending being on-hand via your smartphone, encouraging you to enter into the habit of adding spending as soon as you exit a shop.

We found YNAB during our trial to be very helpful in understanding the budgeting concept and simple to use, at $5 per month it’s affordable too. With a 34 day free trial there’s nothing to lose so we recommend giving it a go.