As the YNAB Team, we’ve been living and breathing YNAB 4 and its evolution for the past 18 months.
We’ve debated minutiae that would drive most of you insane (“This is a pixel off. What if we did a slightly lighter blue? Couldn’t we give this a bit more breathing room? What happens if someone working on the Desktop deletes an account, but then their spouse with an offline iPhone adds a new transaction to that account? What if the Desktop deletes a category and someone on an offline Android modifies that category, while also adding transactions to it, then comes back online?”)
All this talk of features and functions has me missing The YNAB Method.
To be honest, all of my blog posts and emails since last Thursday have focused completely on the software. The software’s just a tool to implement the method.
The Method has worked under every iteration of the software.
When I used to sell the YNAB spreadsheet (it was called YNAB Basic), it only had one Register. You had transactions from all of your accounts all mixed in to one register. There was no scheduler. There was no Quickbudget, no split transactions, and certainly no importing of OFX files or anything of the sort.
When we launched YNAB Pro, people happily upgraded from the spreadsheet (duh!). YNAB Pro still didn’t let you use multiple accounts. The first version still didn’t let you import! We improved YNAB Pro, added some hideous tabbed accounts across the top, and you could import bank files. We added splits, a scheduler, reports etc.
Then we launched YNAB 3 just before I went bankrupt, which ended up being very good timing (avoiding bankruptcy I mean…and I’m actually kidding, though it was horribly stressful). We gave it a new look, lots of new features…
And now we’re at YNAB 4, with our best YNAB yet.
It’s still all about the method. Fancy Cloud Sync algorithm aside (don’t shoot me for saying that Taylor), the software is there to help you become more aware (Rule One), anticipatory (Rule Two), flexible (Rule Three), and secure (Rule Four).
Rule One: You’ll still be giving every dollar a job. That will raise your awareness. It will help you communicate better in your relationship, will highlight money “leaks” and will show you if your money is actually doing those things you truly value. Once your money lines up with your values, you’ll feel content. I was feeling that contentment using YNAB Basic.
Rule Two: You still need to be looking ahead and anticipating those larger, less-frequent expenses. It’s June, which means we need to renew the registration on our vehicles. That was the first expense that surprised me and Julie back in 2003. We’d never owned a car before, and I get this bill in the mail for $105! I about lost my lunch. I learned from that, and we created a “Car Registration Renewal” category where I’d plug $8.75 into it each month. I’ve never been surprised by a car renewal again.
(Well, not true. I got a ticket last year because I forgot to actually renew. But the point is that the money was there for it…)
The holidays are in six months. Are you halfway toward your savings goal for holiday spending? Paying cash for the festivities and gifts, with zero stress…that is living the method. And that type of thinking, applied to all sorts of future events that are coming down your life’s pipeline, is what will transform your life. The software will help you stay on top of it, but it won’t do it for you.
Rule Three: Some of you feel so mad/ashamed when you overspend in a category. My goodness, let me show you something:
Not too hot of a performance is it? That was May’s budget results. Frankly, I’d have to dig around to know exactly what went awry for the month. You know what’s interesting though? May wasn’t particularly bad. It was particularly normal.
You see that balance of $3,230.74? Those are our “Fixed Bills” where I save for things like Property Taxes, Life, Car, and Homeowner’s Insurance, HOA dues, and some others I don’t recall off the top of my head. That climbing balance is why I feel fine with missing some of the other categories.
I don’t budget to see if I can stay within budget and not overspend, I budget to arm myself with the information needed to make good decisions. Follow Rule Three by being flexible. Adjust things as needed. Roll with those incessant punches.
Rule Four: Save for that Buffer! Set aside a bit from each paycheck to be Available Next Month. Just keep making that amount bigger with each paycheck. You’ll get there (on average it takes YNABers about four months, but it’s okay to take much longer than that!).
You’ll love living on last month’s income. It’s liberating. Your bill-paying process becomes an absolute breeze, and you’ll work with a known number each month instead of doing crazy projections (a fancy word for JUST GUESSING :))
Imagine receiving a bill in the mail and…just…paying it. (Couple that with Rule Two: imagine receiving a huge bill in the mail and…just…paying it.)
All of this talk about features made me pine for the method, so this was somewhat cathartic for me. Hopefully some of you reading it were reminded of why YNAB works (it’s because you do).
Totally agree Jesse!!!!
I exactly had your method before knowing YNAB (it works because it is only common sense) and the software is just a tool. What we need is financial education, commitment with it and perseverance.
Congrats again for your efforts and I am delighted to contribute to your project.
Go for it!!!!
I love the method!! Rule #3 is why I have been using YNAB for two years now, when other software has never kept me happy for longer than a couple of months. When I finally realized that my goal *isn’t* to be able to accurately predict exactly what I’ll spend on what categories each month, but instead just to be able to spend on the most important things before the least important things, planning for what I can and adjusting for what I can’t plan – that’s when budgeting actually began to work for us. And YNAB is the only software that is designed to let me “tweak” my budget mid-month without feeling like a failure or a cheater.
It took me a few months to get used to adjusting the “Budgeted amount” to equal the amount spent (while reducing in other categories), without feeling like I was doing something illegal. And it took me about a year before I was staying under my overall budget consistently, without carrying any overspending into the next month’s buffer. But now I’m at a point where, even if I spend too much here, I can make up for it there, and it all works out – and most importantly, I’m in control of it! Now… starting my YNAB 4 Upgrade category today ;-)
Thank you for the reminders about what is important about YNAB … though we do like how the new “improved” versions make it oh so much easier to get to the reason we do budgeting in the first place. To live life just a bit more stress-free because we have a plan for our money.
Nice synopsis of what YNAB’s purpose is. Helps me to stay focused on why to budget, and why to do it in this particular way.
Thanks!
After years on Quicken, I went looking for a new solution since all the importing, reconciling, budgeting and running reports wasn’t resulting in me getting any further away from living paycheck to paycheck. I couldn’t articulate what I was looking for, but I knew there had to be a better tool out there.
I started using YNAB in May and it took me awhile to really shift my thinking to be in line with your budgeting concepts, but now I can say I’m heading into July with a decent surplus and realize that I can actually afford those set of new tires sooner vs. later… and pay cash for them without worry.
I’m SO impressed by everything… the user experience (I’ve done some of this work professionally), tutorials and messaging. I’m enthusiastically looking forward to YNAB 4.
Keep up the good work!
Since YNAB has fixed the duplication of register entries between manual entries & bank downloads, I’ll try again. The YNAB product is great – but I just got sooooo bogged down I quit updating info in my iPhone, and then things went downhill from there :( Thanks for YNAB!
I must admit that I do feel ashamed and embarrassed when the budget isn’t met, but it’s all in the course of a month.
Thank you for your excellent software. I’m a recovering Quicken user here, and I am finding that your method is by far the best, and your software is still miles and miles ahead of the competition. (Intuit doesn’t get it).
Please keep up the amazing work your team does!
Mark,
If you made plans to go to the beach with your kids on Saturday, and then on Saturday, you woke up and it was raining, you wouldn’t go to the beach, right? :) You’d go see a movie instead. The situation changed, so you’d change right along with it.
Your budget is no different. You plan to send $X in ABC category, but something comes up, so you shift and adjust.
There’s nothing to feel bad about there. :) In fact, you should feel good! You were proactive and smart.
THAT’s a living budget. Much more realistic and maintainable.
:)
No feeling bad about adjusting the budget. :)
Seeing all those red categories makes me feel a lot better about my budget…
My thoughts exactly!
I cannot tell you how excited I am to purchase the new build. I also cannot tell you how much it pleases me that it is the end of the month and I easily have the money to purchase it! Thank you so much for the method (the rules) AND the means (YNAB software in its various forms).
I tell everyone about this company.
I can’t say enough about how YNAB changed the way I think about budgeting – I was a spreadsheet budgeter before. Now I’m on YNAB for last two months (which has a benefit of a free upgrade =), though I only read the YNAB book last weekend and now I’m even more happy with my decision to go with it- I think I got it! And this blog post just confirms this.
Jesse, I think you and all your team – you should all be proud of yourselves, you are literrally changing lives of thousands of people for the better. So. Much. Better.
Jesse,
Your METHOD, is the reason why not having all these things that are being implemented now, made it okay. I was also a Quicken user for years, but kept talking to my husband about the things that weren’t right. These new features are only going to help make the METHOD better, which will, in turn, make my life easier. Thank you for all you and your team do.
I almost forgot. The idea from the webinar last night of getting the kids started on their own budget was great. They have their own category, which I have been able to show them when they want to spend their money, but I can’t wait to start teaching them so they can have this skill set when they are on their own. We have used a budget since the day we were married (over 20 years now), but now there is excitement when working on the budget and making the budget work. I will probably start the new school year with the kids budgeting their earnings. Thanks, again.
Hey where is the update link I cant find it? If I go to your website and click on purchase it only offers YNAB 3….I’m within the 6 months and trying to download YNAB4 upgrade….
You’ll get an email, Luke :)
Aaaaaaaaaaah, I can’t wait. I’m so amped…..its not right when you are this excited to work on your budget!!!
Jesse– I’m dying! I want YNAB 4 already! I can’t believe that I’be been using YNAB for 18 months now! Paying bills is a BREEZE now. Shopping and controlling my spending is still a battle, but at least now I know what I have to spend rather than trying to figure out how much I can “get away with.”
Yeah, I had the money for the overdue registration AND for the overdue fee AND for the parking ticket I got for being overdue.
I’m not actually a YNAB-er. My husband and I have been 8 years on a loose system of just saving money. I’ve gotten lazy lately and started buying unnecessaries. Recently trying to get back into tightwaddery (i.e. pottytraining the almost 3-year-old). Did the YNAB trial, didn’t catch on fire before the trial was up. It seemed like too much fiddling. I am too used to just buying something when I want it. I think I’m going to keep a notebook of my expenses as is, then after a few months when I see where it’s all going, then maybe I’ll start needing software. Hope you’re still around then.
P.S. I think we have the same kids’ age dynamics. 7yo, 5yo, 4yo, 2yo, 4mo. Your wife is a rockstar, if her life is anything like mine!
She is a rockstar, no doubt. I do hope we’ll be around in a few months when you decide to try the software :)
I don’t know you guys but I LOVE YOU, YNAB team!!!
I started using YNAB less than 2 months ago. LOVE IT!!!! And, Jesse, I love reading your step by step thoughts. LOL you seem like a pretty cool guy!
Congratulations on the launch of your next milestone!
This has gotta be the best thing that I’ve read thus far… “I don’t budget to see if I can stay within budget and not overspend, I budget to arm myself with the information needed to make good decisions. ” Awesome work!
Congratulations, Jesse & the team. We’ve bought every version to date, and YNAB 4 is no exception. Just bought it, activated it, and already loving it. You all deserve the hugest hug for helping people get on top of their finances. You’re all quiet superstars!
Your Aussie friends
Glyn & Sandra
You guys do such a great job with updates on the blog. Really good stuff. YNAB is an awesome tool, thanks for making it available to us.
I’ve recently been working on a series of blog posts on budgeting and have capped it off with a review of YNAB4. Being new to blogging and reviewing, I’d appreciate any feedback. In the meantime I’ll continue following the YNAB goodness here.