An Argument for Simplicity, Weighing Effort & Reward (Whiteboard Wednesday)

A bit late because I had major technical difficulties :) Please leave a comment down below if you have any feedback or ideas for future Whiteboard Wednesday topics! Also, please share this with friends that need to learn a bit about budgeting!

21 Responses to “An Argument for Simplicity, Weighing Effort & Reward (Whiteboard Wednesday)”

  1. zezont4

    I really have done this 2 months ago .
    monthly spindling sub categories ware about 10 , like grocery, Pharmacy, car’s gas, my mobile bill , my wife’s mobile bill, internet bill, electricity bill …etc.
    It was Painful before.
    But now it’s Only 2 Sub categories: General Spending and Bills.
    Also I have about 10 saving sub categories, but saving is not painful like spending

  2. Nathan

    Haha! Bank heist. I can see it now.

    Very helpful again. I hope you keep doing these. I’ve come to the same conclusion about simplicity. I’m a bit of an organization freak so it is a struggle not splitting things into lots of category. One thing I have tried that I like though is putting all my monthly bills under one major category (Monthly Bills) instead of parcelling them out under things like home, utilities, auto, etc. The advantage of this besides simplicity is I can see instantly the minimum amount of money it takes to get through the month (i.e., monthly bills plus food and gas). It’s great for keeping an eye on how much of an emergency fund I have/need. I do the same for annual bills.

    Suggestion: Use fresh black markers. It’s hard to see some of the other colors.

  3. Nathan

    One other note: I’ve had my debit card number stolen which locks up your bank account (and could potentially make some bills bounce if enough was taken out before you get the problem fixed). I would hate for this to happen on vacation. We use one credit card that we pay in full and only use our bank account for bills. Really doesn’t make things much more complicated since almost all the transactions from my bank can be set up with YNAB’s scheduler. Plus we get a few hundred dollars in rebate checks each year. All my bills are automatically drafted except my credit card (that way I can keep an eye on it for mischarges). Just some thoughts.

  4. Michael Hedgpeth

    You got me thinking about having fewer categories. My rule of thumb is always if I don’t want money “accidentally” flowing from one type to another, then I make categories. So the wife and I get different clothing categories because she would spend all of the money I would need for clothing. Would you say that this would fit with what you’re saying?

    Regarding future whiteboard ideas, I’m a software architect so I like talking software on a whiteboard. I would love for you to talk about some of the conceptual challenges with YNAB and maybe give a non-Spreadsheet-based view of how everything works. In other words, everyone views the software as a spreadsheet because that’s how it has started, but how has the concepts within the software and how the numbers flow changed since you did YNAB Pro and YNAB 3?

    • Jesse

      If you have a legitimate need for breaking out a category (his/hers for instance), then that’s valid. There just needs to be a reason why it’s broken out. For instance, we bundle all of our city utilities into one category — no need to monitor trash and water separately since those are both fairly fixed. Consider other instances with fixed categories where you could combine them (phone & internet?). It’s easy enough budgeting for those combined fixed categories b/c you’re doing the same number pretty much every month. Also, thanks for the suggestion on a more software-specific whiteboard.

      Excellent suggestions as well!

      A share button would have been the smart thing to do, so leave it to me to not do that… thanks for the idea. Next Wednesday I’ll wear my YNAB t-shirt.

  5. Tarra


    I’m new to YNAB (coming from Quicken) and already love it’s simplicity and methodology. So far I feel I’ve gotten great value for money with a incredible piece of software, great training videos and now the White Board Wednesday’s.

    These last two WBWs have really helped me to use YNAB more effectively. I’m going to prune my on-budget accounts (have way to many!) and use categories to position myself on a more sustainable spot on the effort vs return curve :)

    Thanks so much! I look forward to other topics!

  6. Scott

    Ideas for future Whiteboards:
    -Reimbursments (with one point being, how to keep track of who owes you and if they’ve paid).
    -How do I know my budgeted money actually matches what I truly do have in my accounts?

  7. joel

    For future white board Wednesdays – could you give the bullet points of what you will be discussing? Sometimes it is a topic I am very familiar with and would rather not watch a 10 minute video. Others times I think I know the topic and almost ignore it only to find something very helpful.

    Bullet points or a brief paragraph synopsis would be helpful.

  8. ian

    Video would be easier to share, if there was a share button,
    Make it simple for us, lower the effort, increase the returm.

    Also consider the branding in your video. Maybe a clean white T shirt with the YNAB logo and website. The shirt & tie was smart, but you seemed more comfortable in the beanie.

    Also most budgeters are not suit & tie wearing folk. We do this at home, not at work.

  9. khad

    Great points, I have a problem with being too ambitious starting things, so I’m glad I made my categories pretty simple. For example, we have a “Groceries & Misc” category. The Misc includes things like toothpaste, napkins, a new brush, stuff like that. It helps especially when you go to big stores like Wal-Mart. It cuts down drastically on the split transactions.

  10. Michael Jones

    Great presentation, and very true. Sometimes I can get involved in the minuitae(sp?) and forget about the overall (does the old saying “can’t see the forest for the trees” ring a bell”)

    Again, Thanks really appreciate these presentations…keep ‘em coming!!

  11. Jeff

    I really enjoy your whiteboard presentations. Very informative. I just reduced my categories and combined sub-categories by half. This really simplifies viewing the budget.

    Again, thanks so much for the great presentation and cool tips to simplify your life.

  12. Jenny

    Love the concept and the topics. Much better camera angle this time… less glare. Possible topic… I have used Quicken for years and find it useful for generating reports come tax time or when questioned by the financial planner. A couple years ago I was trying to download to both with little success. Any ideas? Could I download to YNAB in a different format to avoid the problems? The bottom line was that ended up downloading to Quicken and entering YNAB transactions by hand. I got so far behind I had to start over.

  13. Andrea

    Greetings, Jesse, I love your “food for thought” WBW’s (Whiteboard Wednesday – two and counting). I was thinking it might be useful to tie in what you suggest with how to actually do this in YNAB3. For instance, if a decision is made to shrink the number of categories, how should the user do this in the program? (What are the recommendations for what to do with the prior and now outmoded categories – just deleting them might create issues with reconciling.) Of if someone opts to have an off-budget account, is there a little tutorial available on how to move funds around to be sure the correct steps are taken?

    It’s fun to see you in front of the camera again. Your enthusiasm is contagious! My thought for an upcoming presentation: project to the future “You” in 5, 10, 20 years and beyond (you could use yourself as an example, or borrow from the stories of the YNAB users) and give a real-life demonstration of what steps in money management could best help to get you there.

  14. Ren

    I’m considering giving the YNAB software a try, but am looking through lots of information here first since I’m not certain a week will be long enough for me to evaluate the software. I’ve been a Quicken user for years and have actually developed my own budgeting methodology that is very similar to YNAB. (FYI, I use Quicken’s Savings Goal virtual accounts as the primary mechanism for this.)

    The reason I am commenting on this topic is that I wanted to point out something I have learned through the years about categories. While you are absolutely correct that having fewer categories is a huge boon to managing a budget on an ongoing basis, it can still be quite helpful to have finer-grained categories to track your actual spending when it comes time to assess and adjust your budget. The key to this is to budget at the category level but track spending at the subcategory level.

    For example, Nathan mentioned using a single category for monthly bills. I think this is a great idea, but I wouldn’t want to lose the ability to look back and see how, for example, my electricity bills have changed from year to year. By still categorizing the actual electricity payment to the, for example, Bills:Utilities:Electricity subcategory, but budgeting at the higher Bills (or Bills:Utilities, as a compromise) category, you basically get the best of both worlds.

    While Quicken’s budgeting capabilities are far too rudimentary, I have been able to create monthly reports that give me what I need and then enter appropriate transfers to Savings Goal accounts to achieve similar behavior to YNAB. Because it is just a report, consolidating the subcategories and only managing the budget at the higher level is straight-forward. This leads to a question about YNAB: is this type of budgeting supported? That is, can I budget to the higher level category and spend from the subcategory?

    • Jesse

      Hi Ren,
      You bring up a great point. I would add that if you’re having trouble in a category, that’s a great reason to give it its own section so you can be more aware of it. Awareness will put it back in its place.
      While it’s great that you can look back and see trends in electricity payments, as your example, my guess is that, oh, from the hip I’d say 95% of users — though they want to have the historical data — never look at it. And of the five percent that do look at it, 80% of those people actually find something out that’s actionable :) That’s just a guess though – no hard data to back it up.
      YNAB currently doesn’t allow you to budget to higher-level categories. We’re constantly improving the software, so I never rule things out, but I also am slow to add (slow on purpose!)

  15. Renee McGrath

    I’m loving whiteboard Wednesdays! Just cut down on the number of accounts that we track in YNAB (took retirement accounts out this year) but could still simplify the categories (and probably the accounts, too).

    For the record, I liked the bank heist look better than the professional look. Perhaps there’s a happy medium?!

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