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

By: Go Granular to Change Behavior

Go Granular to Change Behavior — Tue, 31 Aug 2010 16:58:32 +0000

[...] focused in previous Whiteboard Wednesdays on keeping things simple so you can stay on track. While unsustainable effort can affect change, it’s only meant to [...]

By: Renee McGrath

Renee McGrath — Wed, 03 Mar 2010 21:43:51 +0000

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?!

By: Jesse

Jesse — Fri, 26 Feb 2010 16:45:58 +0000

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!)

By: Ren

Ren — Fri, 26 Feb 2010 16:14:11 +0000

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?

By: Dashboard Usefulness (and Craziness) – Whiteboard Wednesday

Dashboard Usefulness (and Craziness) – Whiteboard Wednesday — Wed, 17 Feb 2010 17:20:17 +0000

[...] Today’s Whiteboard Wednesday is an extension from another we did a few weeks ago on Simplicity. [...]

By: Becky

Becky — Sun, 07 Feb 2010 07:44:09 +0000

great info….keep it up

By: Andrea

Andrea — Sun, 07 Feb 2010 00:28:00 +0000

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.

By: Jenny

Jenny — Sat, 06 Feb 2010 23:06:32 +0000

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.

By: ian

ian — Sat, 06 Feb 2010 03:59:30 +0000

@jesse Like the share buttons :)

By: Jeff

Jeff — Fri, 05 Feb 2010 22:39:26 +0000

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.