Spinoff-Those using YNAB

brazzledazzler · Sep 2, 2015

FairestOfThemAll37 said:
what made you try it? What were your goals for using it? Pros/cons? Is it of any use if you have a decent handle on your budget (ie. Don't have CC debt or "overspend")

Why did I try it: In late 2013 My boyfriend (now DH) was 11K in credit card debt when we started dating, and when we talked about marriage, we both felt it was important to start a marriage off credit card debt free. YNAB got his finances in order and he was able to pay off that debt this year. On top of that, we have been able to save for our 3 week honeymoon, countless Disney trips and a down payment for a home. I only started using YNAB when we started comingling our assets after our wedding in April.

Pros: It actually makes it a lot easier to manage our separate and joint accounts. It makes it easier to save for rainy days and savings goals. I know exactly where all my money is going and where it is sitting at all times.

Cons: The app on the phone is limited, you really need to use the computer app. You also need to stay on top of all your purchases.

Is it of use if you have a decent handle on your budget: I never had CC debt, and I find this app to be AMAZING. Firstly, if you are trying to save/plan for anything in your future that requires money (Christmas, birthdays, car payments, retirement, Disney!, whatever!) this program gives you a better handle on where your money is going and when it is coming from. Just because a person doesn't have CC debt, doesn't mean they don't have expenditures. Everyone needs savings; Everyone needs to plan for a catastrophe; YNAB makes you think ahead.

pryncess527 · Sep 2, 2015

FairestOfThemAll37 said:
So I've seen it mentioned recently on my own thread and a few others and countless times in the past.

For those who use or have used YNAB: what made you try it? What were your goals for using it? Pros/cons? Is it of any use if you have a decent handle on your budget (ie. Don't have CC debt or "overspend")

Give me the skinny. I'm very curious as online reviews make it seem like finding the gates to heaven.

My husband saw in on Steam and thought it sounded interesting, so we bought it. A few months later, we actually gave it a try.
We did not have CC debt and were pretty in control of our spending, but YNAB has been amazing. We are more thoughtful about how we allocate our money because we are taking a zero-based approach, and YNAB makes that easy to manage. It has improved our conversations about money because we both have access to the budget and have a clear picture. It has helped us understand our priorities -- there are some things we used to say were important to us, but when we started using YNAB we realized that when we lay our goals all out some of those things aren't as important as we thought and the budget helps make sure our spending matches our priorites.

When we did a kitchen remodel and my FIL asked me "how much do you have to spend on tile" -- I was not guessing. I knew EXACTLY how much I had to spend on tile without risking any of our other goals. And so when he suggested an upgrade to travertine, I knew I could swing it. MUCH less stressful than the bathroom remodel we'd done pre-YNAB where I had a budget, but in hindsight I was just guessing . . .

And my favorite -- we have increased our giving. We have a category in YNAB that covers charitable, political, and unexpected giving situations and having budgeted money set aside for that purpose has enabled us to be more generous than we were in the past, and that feels great.

pryncess527 · Sep 2, 2015

One more thought -- I think a zero-based budget approach (YNAB or not) is helpful for anyone who wants to be thoughtful about how their resources are allocated. A lot of people think of the word budget as being restrictive, which is why I like to think of YNAB as more of a 'Spending Plan" -- it's not about what I can't do, it's about allocating resources to ensure I can do what is most important. There is nothing more freeing than buying a new pair of expensive shoes guilt-free with funds budgeted to my clothing category

NO ONE on this earth has unlimited resources. Even Bill Gates has created a budget framework to help him target his dollars to ensure he does the most good with what he has, because he can't do it all.

YNAB helps my family allocate our resources in a way that is easy for us to both see/understand/adhere, and encourages us to be thoughtful about our choices. I can't imagine any scenario where I would not want to be thoughtful about how I use my resources. It has really helped me have a fundamental shift in how I think about money which has been so powerful for the health of my family, even though I didn't even think we were "sick" before.

RobbW · Sep 2, 2015

pryncess527 said:
A lot of people think of the word budget as being restrictive, which is why I like to think of YNAB as more of a 'Spending Plan" -- it's not about what I can't do, it's about allocating resources to ensure I can do what is most important.

I think THIS right here is probably one of the most important take-aways to understand about YNAB (or any zero-based spending plan)! Do not regard it as a "diet" for your finances where you restrict your spending across the board, but rather learning to put less on your dinner plate so that you have lots of room for a big, yummy dessert!!!! For me, WDW vacations (and traveling, in general) are my big, yummy desserts, and YNAB is going to help me control my appetite so that I always have room for dessert! Priorities, my friends!

pryncess527 · Sep 2, 2015

erin1715 said:
So far, YNAB is confusing to me. It's only showing the income for the entire month, so it doesn't break it down by week. And even if I add a future paycheck transaction it just adds the entire amount onto the month shown. I guess I just like seeing it broke down per week instead of the entire month lumped together. With my spreadsheet, I was also able to keep in mind what bills are due when based on when I would get paid. With YNAB, I see the bills that are listed but it seems like I have to keep track in my mind when they're due each month. I'm going to give it a try a little longer but I might just go back to the way I was doing it.

You might find these forum posts helpful for setting up weekly budgets. The idea is that, eventually, you "live on last months income" and start September with ALL the money you need to cover everything for September (which I find amazing and delightful), but many people are in no rush to be buffered and operate with a weekly budget using a variety of techniques.

http://forum.youneedabudget.com/discussion/35852/weekly-budgets

The people on the YNAB forums are VERY nice and helpful

LinderInWonderland · Sep 2, 2015

I also use Excel for our household budget, but I am trying to get DH to be more accountable for his spending. We have 'money dates' where I lay out our financial picture and we discuss goals, but I don't think he fully connects how to conserve on small things so he can have big things. I think YNAB will be just the thing to help him visualize what effect his current spending has on his future wants (needs are covered). He wants to buy a house in 5 years, get a fully loaded brand-new car in three years and take annual vacations, but doesn't see how fast food breakfasts, going out during the week and every weekend eats away at that goal.

FairestOfThemAll37 · Sep 2, 2015

Ok YNABers, I downloaded the free trial as even though my fly by budget works, I figured I'd give it a twirl.

So, if I get paid on 1st and 15th I have entered what's in my account now. So the way I get paid (because you only count what you have) I will always be "overbudgeted" until the end of the month (I also get an additional smaller check at the end of the month)?

I live "paycheck to paycheck" out of my daily checking account with savings, buffer, vacation etc. in another account.

I like having these two things physically separate.

I hate seeing the glaring red overbudget by a huge amount!

Do I just need to add my other account so YNAB reads it as me using old money?

Is there any reason why I need that "buffer"/rule number 4 sitting in the same account I use for bills? As long as the money is in my account does it matter that my "last month money" sits there month over month just in case and I'm using my new money right away?

FairestOfThemAll37 · Sep 2, 2015

How do you work this w/CCs?

Do you pay off your CC daily? Weekly?

I pay the whole month when the bill comes due, but CC billing has a delay that debit doesn't have.

This feels so difficult lol.

pryncess527 · Sep 2, 2015

No, it does not matter what account you keep the "buffer" money in. As long as it's in YNAB, it does not have to be in your main checking. YNAB doesn't really care where your money is -- it makes no association between budget categories and specific locations, if you want to enforce that connection that's up to you.

One solution to the overbudget is to add your other account to YNAb.
The other solution is to only budget expenses that you will pay with this paycheck. When you get more money, budget again.

RobbW · Sep 2, 2015

YNAB technically doesn't care where you physically keep your money or what source you use to pay for anything. However, it is important to have all your accounts entered into YNAB so that all your income is available. If you want to maintain a "buffer", then add a budget category called "Buffer for Account XYZ" (or whatever you want to call it) and put however much money you want into that category and leave it there. That will remove those funds from your "Available to Budget" pool and keep them set aside. Use the remaining income to budget for everything else.

pryncess527 · Sep 2, 2015

FairestOfThemAll37 said:
How do you work this w/CCs?

Do you pay off your CC daily? Weekly?

I pay the whole month when the bill comes due, but CC billing has a delay that debit doesn't have.

This feels so difficult lol.

I can pay my CC off any any point in time -- I pay the whole month when the bill comes due.
It can feel difficult at first, it's a radical transformation in thinking for most people, and that takes time.

When I buy something, groceries for example, I use my AmEx. I record it in YNAB, indicating that the transaction was done on AmEx using the budget category groceries.

When I pay off the AmEx, it is a transfer (both in YNAB and IRL) from checking to AmEx, which does not impact the budget because no new money was spent.

RobbW · Sep 2, 2015

I analyze my CCs and pay them off every Friday. As long as you never let your YNAB budget categories fall into the red/negative, you never need to worry about having the money to pay off your CCs or other bills.

RobbW · Sep 2, 2015

The timing of paying your CCs really doesn't affect YNAB at all. Since you have already recorded all your CC transactions against your budget categories in "real" time, when you actually pay your CC doesn't really matter.

FairestOfThemAll37 · Sep 2, 2015

RobbW said:
YNAB technically doesn't care where you physically keep your money or what source you use to pay for anything. However, it is important to have all your accounts entered into YNAB so that all your income is available. If you want to maintain a "buffer", then add a budget category called "Buffer for Account XYZ" (or whatever you want to call it) and put however much money you want into that category and leave it there. That will remove those funds from your "Available to Budget" pool and keep them set aside. Use the remaining income to budget for everything else.

Thanks for the info!

I don't want to budget any more for "buffer" but I thought a huge part of the YNAB philosophy was that you keep a buffer of one month so that you essentially always have one month with of expenses in an account.

I have that but it always sits in a separate account and then I live off of new money.

Ok so I don't make a budget category for CC, I just mark it as CC when I make a purchase?

FairestOfThemAll37 · Sep 2, 2015

I have a feeling that the one month trial won't really be enough to really get a feel for this.

Especially having not had any type of zero sum budget it's tough to gauge and I feel like my CC cycle is off

RobbW · Sep 2, 2015

You add your CCs as accounts, just like you do with your bank accounts. That will allow you to record your CC transactions and post them to your CC register.

pryncess527 · Sep 2, 2015

FairestOfThemAll37 said:
Ok so I don't make a budget category for CC, I just mark it as CC when I make a purchase?

Correct, you budget the CC spending to a category based on what you bought.

You might be surprised with how much progress you make in a week

They are really nice too, if you need 1 more week at the end of your trial before you are ready to commit, I bet their support would help you out.

pryncess527 · Sep 2, 2015

Any spending that was on your CC before you started YNAB will be considered "pre-YNAB debt" in the software.

If you have the means, I strongly suggest paying your CCs in full before starting, it does make things easier to avoid Pre-YNAB debt -- especially if the debt isn't really debt but just a paid-in-full CC that isn't paid yet

FairestOfThemAll37 · Sep 2, 2015

pryncess527 said:
Any spending that was on your CC before you started YNAB will be considered "pre-YNAB debt" in the software.

If you have the means, I strongly suggest paying your CCs in full before starting, it does make things easier to avoid Pre-YNAB debt -- especially if the debt isn't really debt but just a paid-in-full CC that isn't paid yet

Ok this! This is what I'm really having trouble with to the tune of $2k or so across all my cards. My cards are staggered so they weren't tied to a specific "month" budget. I just kind of always lived "within my means" and payed things when they came (I've never paid interest in CC) and never really "budgeted"

I could pay that ahead out of my vacation fund (my poor vacation fund has already taken an extra $2,500 hit from my cruise thread). But since it's not really extra, I guess it will even out? IDK I'm really good with math, but it's a whole new world of thinking.

pryncess527 · Sep 2, 2015

FairestOfThemAll37 said:
Ok this! This is what I'm really having trouble with to the tune of $2k or so across all my cards. My cards are staggered so they weren't tied to a specific "month" budget. I just kind of always lived "within my means" and payed things when they came (I've never paid interest in CC) and never really "budgeted"

I could pay that ahead out of my vacation fund (my poor vacation fund has already taken an extra $2,500 hit from my cruise thread). But since it's not really extra, I guess it will even out? IDK I'm really good with math, but it's a whole new world of thinking.

Okay, it sounds like you've been doing what YNAB calls, "Riding the Credit Card Float" -- it's not a bad thing, but in order to truly be living off last month's income, the cycle has to be broken. There are a few various methods that YNABbers use to get off the float. This support article explains the concept ---
http://www.youneedabudget.com/support/article/understanding-the-credit-card-float

I'll see if I can find a few helpful threads to link, several users have creative solutions for dealing with it.

here's one I was looking for -- it contains an "off-the-books" suggestion for getting off the float in a post by nolesrule
http://forum.youneedabudget.com/discussion/40574/quick-credit-card-question

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