I love GPS.
That lady’s voice calmly instructs you to turn left in one hundred feet. She’ll warn you of freeways diverging. She’ll forecast the duration of your trip at your current speed.
And all with that soothing voice.
She determines what you want to do, and then tells you (at just the right moment) the steps required to arrive.
What if GPS worked more like your “traditional” personal finance software?
1) It wouldn’t ask for your destination. Traditional personal finance software doesn’t care where you want to go. It just cares about what you did. And when you tell it what you did it’s kind of like, “Meh. Thanks for letting me know.”
YNAB wants to know EXACTLY where you want to go with your money. That’s the first rule. Giving every dollar job means that you answer one simple question honestly, again and again: “What do I want to do with this money that came in?” Vacation? Utilities? Mortgage? Birthday present? Just decide what you’d like to do with your money and YNAB will help you do it. Input the destination…follow the directions.
2) Traditional personal finance software would wait for you to stop driving and then announce that you were headed in the wrong direction. What if GPS gave instructions like: “Turn left one half mile back.” It wouldn’t be useful, and it would be dangerous.
YNAB gives you directions along the way. Rule Three (roll with the punches) makes automatic corrections for overspending by making you replenish overspent categories with money from next month’s budget. YNAB gives you a dashboard through the Budget interface to see exactly where you stand, with any category, at any given moment. The power in seeing it all right there? You make wise decisions — weighing adding money to category A, by taking a bit from category B. The consequences of your PLAN are right in front of you. The consequences of your ACTUAL behavior sits right in front of you as well.
3) If GPS worked like traditional finance software, it’d probably stop allowing you to use critical features unless you upgraded to the latest version.
YNAB takes the opposite approach. Once you’ve purchased the software, it’s yours. It’ll work forever. We won’t ever force you to upgrade by crippling your current software. We may try to entice you with awesome features.
The main difference between YNAB and its competitors? YNAB wants you looking forward, planning, and adapting on the fly. Traditional finance software wants you to set some arbitrary numbers, then look back at the close of the month, see some fancy report, and continue doing whatever you’ve always been doing that hasn’t really been working.
YNAB is a change in your mindset. It just happens to also have some really, really polished software to help you implement the change.