YNAB Review: 5 Things To Know About the Budgeting Tool

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If you’re thinking about downloading a budgeting app, You Need a Budget (YNAB) may be worth checking out.

I’ve set up a budget on YNAB, checked out what resources it offers and looked at other budgeting tools to see how it compares. In this article, I’ll take a close look at five things to know about YNAB before you download the app.

5 Things To Know About YNAB

If you have financial goals that you’re trying to achieve, budgeting is a crucial step. It’s important to delegate where your money is going to go so that you aren’t left wondering where it went. While you can set up a budget on your own, there are tons of budgeting apps and websites that can set one up for you. YNAB is definitely one to consider. 

YNAB claims to save new budgeters more than $6,000 in their first year. Unfortunately, the savings come at a cost of $11.99 monthly or $84 annually after a 34-day free trial

If you’re thinking about signing up for YNAB online or downloading the app, here are five things to know:

Below, you’ll find detailed information on YNAB including how to start budgeting for free and what to expect once you’ve created an account. 

What Is YNAB?

You Need A Budget (YNAB) is a website and app that launched in September 2004. YNAB users claim that the app has helped them take control of their spending habits in life-changing ways.

The personal finance app stands apart from competitors like Mint and Personal Capital because of its proactive system. 

“It requires you to be forward-looking and intentional about every dollar; it requires you to be aware,” the YNAB website reads, “but in return you’ll be in total control of your finances, and in so doing, your life.” 

What’s so great about YNAB is that it brings together all of your accounts and then prompts you to give each available dollar a job. This way, you determine where your money will be going instead of waiting to see a summary of where it’s gone.

How Does YNAB Work?

Unlike a lot of other budgeting tools, YNAB works by making you assign each free dollar to a category. This way, you can plan where your money is going to go before you spend it. 

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YNAB’s philosophy is that you have to be intentional about making a plan and sticking to it in order to actively change your spending habits. For this reason, the app keeps you focused on the money you have available before you spend it so that you have total control over where it goes.

Getting Started

To get started, visit You Need a Budget’s website or download the app for iPhone or Android

Click “Start your free trial” to create your account. You’ll have to enter an email address and password before proceeding. You’ll have to agree to the terms of service and the privacy policy, but the company offers assurances that your information is protected.

Once you’ve logged in, you can immediately start setting goals and filling out your profile. If you’re budgeting with a partner, you can also indicate that when you first sign in. 

When I checked out YNAB, I created my account on the website. Once I was logged in, here’s what I saw: 

YNAB (You Need a Budget) homepage with a pre-loaded budget

While the website and app are designed similarly with a spreadsheet feel, it can still be a little intimidating to begin with. From this page, I clicked “Add Account” to begin. 

You can add checking accounts, credit card accounts and/or savings accounts. You can choose to have information imported automatically, such as account balances and cleared transactions from a linked account. Or you can start with an unlinked account by entering your current balance and then manually keeping up with transactions. Either method works, but I linked my accounts to make it easier. 

You can add accounts from the website or from the app. You will need your account information to add a linked account, so have that handy if you plan on going this route. Whichever method you choose, you’ll be guided through the process of getting set up. You can also add as many accounts as you’d like. 

For more details on how to set up your account and link your bank accounts, check out YNAB’s guide to getting started.

How To Set Up Your Budget

Once you have your accounts linked, you’ll see a dollar amount across the top of the screen labeled as “To Be Budgeted.” You’ll be able to budget only money that you currently have. The goal is for you to decide where that money needs to go before you get your next paycheck. 

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YNAB app homepage with a "to be budgeted" amount

Now you’re ready to customize your budget and assign your money to specific categories. You’ll see default categories pre-loaded when you first log in, but you can edit, delete, rename, reorder or add new categories any time. I didn’t need categories like “music” or “software subscriptions” in my budget, so I took these out and added things like “cat food” and “books.” 

It’s also a good idea to allot a certain amount of money to a category like “stuff I forgot to budget for.” This is a great way to create a safety net so that you don’t go over your budget.

If you link a savings account, you may have more money in your “To Be Budgeted” category that you plan to spend soon. I added an “emergency fund” category and budgeted some saved money there. You can also get more specific and assign your savings to a few different categories such home improvement or travel.

You may be starting from scratch. In this case, YNAB is a great way to prioritize your immediate needs and take control of your current funds. Start by assigning the money you have to your most immediate obligations such as bills or groceries.

When you’ve determined how much of your money should go toward a certain category, you can click the dollar amount in the “budgeted” column” to update it. Then, you’ll be able to see how much of that budgeted amount you have available before making a purchase and adding a transaction. 

How To Stick to Your Budget

Once you have your budget set up, it’s important to stay on top of it so that you see the savings. 

YNAB believes that your budget, not your bank account, should guide your spending. The idea is that the money in your bank account is no longer available: You’ve spent it on your budget. Now you look at the amount available in your budget for each category before deciding how much to spend.

Of course, you can adjust your budget at any time. Over the first month, you may have to do this a few times as you realize how much you actually need for each category. When I set up my budget, I completely forgot to designate any money toward medical expenses, so that was a change I had to make when I realized I had a doctor’s appointment coming up. 

For your budget to work, it’s important to record your spending every time you spend money. If you’ve linked your bank accounts, YNAB will automatically import all your transactions. If you’re entering your transactions manually, you can just click “add transaction” in the app or online. 

Adding a transaction manually on YNAB

I used the automatic import feature when I tried out YNAB, but tracking your transactions manually works just as well. In fact, YNAB claims that it’s arguably the best method for optimal awareness and real-time status of your category balances. You can also do both! If YNAB imports a transaction from your bank that you’ve entered manually, it’ll match those transactions and prompt you to eliminate one. 

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When it comes to cash, YNAB recommends creating a category for cash spending. Then you can budget and track your cash flow throughout the month. Any time you take money out of your bank, add it to your cash budget on the app.

How Does YNAB Compare?

Compared to other personal finance apps, I found YNAB to be one of the best for budgeting, because it really encourages you to think ahead and take the time to plan where you want your money to go. 

Still, it’s far from the only personal budgeting tool available. If you’ve been searching for the best budgeting tools, you’ve probably also come across Mint and Personal Capital.

Here’s a quick highlight of what to know about the features available with each of these budgeting tools: 

 Mint.comPersonal CapitalYNAB
Best forTracking expensesInvestmentsBudgeting
Free to useYesYesNo
Ad-supportedYesYesNo
Track spendingYesYesYes
Monthly budget plannerYesYesYes
Bill payment alertsYesYesNo
Free credit scoreYesNoNo
Retirement plannerNoYesNo
Investment trackingYesYesNo

As you can see, all three budgeting apps offer a variety of different features that help you track your spending and net worth to build a practical budget. But they each specialize in different areas of your finances. 

Money expert Clark Howard is a fan of Mint and says it’s great for tracking your expenses. If you’re mostly interested in seeing what you’ve spent and watching your overall financial health, Mint may be a great free alternative to try first. 

If you’re mostly focused on watching your investments or planning for retirement, Personal Capital may be a better budgeting tool for you. Plus, like Mint, it’s free! 

However, if you’re more interested in a strict monthly budgeting tool and you don’t mind paying for a subscription, YNAB may be worth it. You can try it out for free for 34 days without having to enter any payment information. 

Compared to other popular budgeting apps, YNAB is an option that’s definitely worth checking out. It offers a strong forward-thinking approach that — if used properly — will definitely help you take control of your finances. Still, the platform can be a little overwhelming at first. It really requires an initial time investment to learn and, of course, a monetary investment to keep.

How To Get the Most Out of YNAB

YNAB is built around four core rules to help you get the most out of your budget. The app encourages you to improve your spending habits using these rules, and building your budget with the rules in mind is a great way to make YNAB work for you. 

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  1. Give Every Dollar a Job. As soon as you have money available, decide where it should be spent. This is the best way to avoid buying things based on your mood or bank account. Instead, you’ll be spending based on your priorities. If you set aside some time each time you get paid to make a plan for the money, it’ll be much easier to decide what you can and can’t afford throughout the month. 
  2. Embrace Your True Expenses. “True expenses” are those big, unexpected things that can cause financial stress. Think of a car breakdown or a last-minute trip you have to make. YNAB encourages you to think about those “true expenses” in advance and break them down into monthly “bills.” This way, you’ll be ready for those expenses when they come up. 
  3. Roll With the Punches. While YNAB offers a strict budget platform, it’s OK to be flexible. If you overspend in one category, YNAB will encourage you to address it quickly and adjust accordingly. You can choose a category where you’ve overspent, transfer funds from another category to cover it and then move on without the guilt. 
  4. Age Your Money. This rule comes with time. After you’ve consistently budgeted for a few months, you’ll be spending less than you earn. Eventually, you’ll be able to cover this month’s expenses with last month’s paycheck. The goal is to be spending money that’s at least 30 days old so that you never have to worry about having a low balance.

To learn more about YNAB’s four rules, check out the website.

Final Thoughts: Pros and Cons

Budgeting is essential if you’re serious about reaching your financial goals, and YNAB provides everything you need to take control of your money. After trying out YNAB myself, here are the biggest benefits and drawbacks that I’ve found:

Pros:Cons:
Active Approach: YNAB makes you designate each available dollar to a budget category before you spend a dime. This forward-thinking approach helps you take control of your finances upfront. Price: While the first 34 days are free, YNAB costs $11.99 monthly or $84 annually afterward. Competing personal finance apps Mint and Personal Capital are free.
Personalization: YNAB provides a budget with suggested categories, but you can edit them, delete them, reorder them and add new categories that make sense for your life. You can also create categories for cash spending, savings goals and accidental overspending.Usability: The YNAB interface is a little overwhelming at first, and the system takes a while to learn. Still, there are helpful videos and articles on the website to help you get started. If this budgeting method works for you, it could be worth the time it takes to learn the system.
Easy Tracking: You can link your accounts to have your transactions automatically imported. You can also enter your transactions manually. Either way, the app makes it easy to keep track of how much you have available in each category.Limited Features: YNAB doesn’t have as many features as some of the competing free apps. There are no bill payment alerts, and you can’t track your investments. Instead, the app focuses solely on budgeting.

Compared to other budgeting tools like Mint and Personal Capital, YNAB stands out for its active approach to money management. But I found the system to be a little more complicated to learn. If a free budgeting app or even a classic spreadsheet/pen and paper budget is working for you, there’s no reason to switch to YNAB.

I use a simple spreadsheet on Google Sheets that works well for me. After trying out YNAB, I’m still going to stick to my spreadsheet. YNAB’s approach to budgeting wasn’t the best fit for me because the app was difficult to learn how to navigate, and I felt that I was getting the same benefits with my simple spreadsheet.

Still, if you need help getting your finances under control, YNAB has been effective for many people. If your current budget isn’t working out, check it out. You can try YNAB for free for the first 34 days to see if it’s right for you.

For more information on how to get started and how to set up a budget that works for you, check out YNAB’s ultimate get started guide and some of the video courses available online

Do you use YNAB or another personal finance tool to stay on budget? Tell us about it in the comments below! 

More Clark.com Content on Budgeting: 



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