It's the little things

The big things:

For the past few weeks, we’ve been working on YNAB Pro version 2.5. Our beta testers have been diligently hammering on it, and now we think we’re less than two weeks away from a public release.  I’m excited about this release for two reasons.  The first reason is that we’ve added some cool new features:

  • You can add notes to categories and budget cells on the budget screen.  Now when you need to remember why you had to budget an extra $50 this month in the gifts category, you can make a note that it was for your spouse’s birthday.
  • You can transfer money from one account to another really easily.
  • You can bulk-categorize transactions.  (This is especially helpful when you import transactions)
  • When you download a file to be imported from your bank’s website, YNAB Pro will automatically start and initiate the importation process.  (No more hunting around for the file)
  • And a few more…

The little things:

In addition to the features however, I’m probably more excited about the “little things” that we’ve changed.  When you think of a program or a web page that you really like to use – one that just seems to “get it,” – chances are that program acts the way you expect it to.  I don’t just mean that it has the features you expect.  I mean that when you click on something, or hit a key, or hover over a certain part of the screen, it does exactly what you expect.  In fact, it probably does so many things that you expect, you don’t even think about it.  To prove my point it might be easier to think about the last web page or software you used that you didn’t like.  Chances are it almost never did what you expected.  It doesn’t take many mouse clicks in software like this before you’re ready to give up and you might not even be sure why!  All you know is that you feel frustrated.

When we developed YNAB Pro originally, we tried to pay attention to a lot of “little” things because we know they add up!  Every time we asked the question, “What should the software do there?”, we tried to answer by saying, “Well, what would I want and expect it to do?”  I think we did a pretty good job with this, and consequently, I think YNAB Pro is pretty enjoyable to use.  That belief is reinforced by our fans, but after spending every workday with the software for the past few weeks, I started noticing some little things that we didn’t do right or that we missed:

  • “Wait, that took too many clicks.”
  • “Why is that taking so long?”
  • “Ugh – that feels sluggish!”
  • “Wait, that’s not what I expected”
  • And a few more…

Now that I’m full time, I’ve got time to really dig in and investigate when I see YNAB Pro do something I don’t expect, even if it seems like a “little thing”.  There are over 100 features, fixes, and changes in this next release, and a lot of them fall in the “little thing” category.  My guess is that you won’t even consciously notice most of them.  Hopefully you’ll just think, “Wow, I really like this new version,” even if you can’t say why.  But let me give you a hint:

  • It’s much faster and more responsive – Loading is faster, clicking around is faster, renaming categories is faster…you get the idea
  • There are fewer mouseclicks required to begin editing a cell in the register once the transaction is selected
  • You can reorder the account tabs just by dragging them around
  • Payee entry is not case-sensitive anymore (Typing “yn” and hitting tab will select “YNAB” instead of changing it to say “ynAB”)
  • All of the right-click menus just disable items that are invalid instead of hiding them.  This makes the menu much more predictable and discoverable
  • And trust me, the list does go on…

You can expect to get your hands on this release very soon, and we can’t wait to hear what your favorite “little” change is.  Many of these changes were a direct result of people telling us about them on our forums, so if we left something out, and YNAB Pro isn’t doing what you want or expect, let us know!

YNAB for Lazy People

I use the term lazy only for headline punch. You are all very hard-working individuals. :)

No, actually it’s because of this article: “Budgeting for Lazy People” written by Dayana Yochim over at the Fool.

Here are some tips if you’re just feeling lazy about YNAB (either starting or continuing).

Use Fewer Categories

I am on a quest to get our categories down to eight. Right now we’re somewhere around 35! I’ve been whittling almost every time we use the budget (which is now almost exclusively on Sunday evenings, unless of course I’m betatesting).

A few of my thoughts going forward. I’m going to get the biggest bang for my buck by consolidating all of our insurance into one category: Insurance. That’ll kill homeowners, car, life and health. I’ll drop from four to one.

I used to have the kids’ clothing categories all separate. I’m going to get those down to just Clothing. I may keep a separate category of clothing for Julie because she likes to know how much she’s spending specifically. I don’t buy clothes, so I don’t need a category.

Now, you may be wondering how I’ll be able to keep all of the insurance payments straight if they’re in one big category? A few things: 1) homeowners is monthly, car is monthly, health is monthly, life is annual (or monthly divided by 12). I’ll be dealing with the same total to be budgeted every month. 2) a new feature in the beta version makes this very nice, because I can write notes about specific categories, or specific Budgeted amounts.

I think I’m going to expand the reach of our Miscellaneous category and also consolidate Date, Family Night, and Recreation down to just one: Entertainment.

Why all the work getting to fewer categories? I don’t want to have to make as many decisions when recording transactions. Instead of having to think, “Okay, this shirt was for Porter…those shorts were for Harrison…now I need to split the transaction…” I just record it in Clothing and I’m done.

Fewer categories means you don’t need to split transactions as often. That means you’ve saved some time.

Import Your Transactions from the Bank

OFX, QFX, QIF…YNAB Pro imports them all from your bank. I just grab the same date range every week (First of the Month through Today) and import. It disregards transactions already imported and I categorize the new ones. I very rarely deal with matched transactions because I very rarely input spending except through importing.

This saves a bit of tedium and time.

Use the Batch System

Decide on a set time once or twice per week to enter all of your spending. Just cutting down on the frequency of the process will save you time.

I implemented a batch system for email several months ago and love it. (I was prompted by Tim Ferris’ excellent book, The Four-Hour Work Week). I do emails at four, noon, and four again. (Early to bed, early to rise, makes a man healthy, wealthy and wise…) The time savings has been measurable, and productivity has increased because I’m distracted far less.

My Thoughts on the Fool Article

It’s funny, because the beginning of the article really caught my attention but then as I read it, I realized what the author was suggesting was actually quite a bit of work :) One aspect I really liked that they talked about: the absolute key being that you spend less than you earn (Rule Two certainly helps you in this regard) and, in the end, that’s it. That’s all you really need to worry about.

Yes, it may be nice to look back in 10 years and see how much you spent to bring your golf game from horrible to horrid (which is worse?), but in all honesty, you probably won’t ever look back and need to know that information. Bear that in mind when you’re debating about “going granular” or just wanting to make sure you’re staying on top of the Big Picture: Spend Less than You Earn.

Conclusion: To All Those Who are Out of Control

These don’t apply to you. You need to get with it. I would suggest almost the exact opposite from what this article suggests:

1) Plug leaks. If you’re spending a bunch of money on coffee then you need a coffee category. DVDs? You need a DVD category. Do you find yourself constantly purchasing books? You need a book category. As you isolate, you’ll evaluate and when you evaluate, you’ll mitigate (useless spending).

2) Record things manually. Force your spending to be something you really have to work for. Recording your spending manually will make you (dreadfully) aware of what is going on. Yes, it’s nice to have beautifully-designed aggregators of all of your spending data, but looking back at your spending nicely categorized doesn’t have near the psychological effect of sitting down with a receipt, recalling the moment of purchase, seeing the amount, t-y-p-i-n-g that amount in, deciding where to categorize it, and then feeling slightly sick to your stomach.

3) Increase frequency. You need to be recording your purchases every day. At least once per day. Frequency breeds awareness and that’s what we’re after.

As you develop the habit of budgeting, you’ll be able to adjust these three things accordingly.