YNAB Review: The Best Budgeting Software I’ve Used

Preface: I’ve only used YNAB 4, so most of my review will be centered around this version of the software.  The newest version was recently introduced with additional features but still retains the same principles and ideals.  Once I transition over to the new YNAB version I will update this blog post accordingly.


The most valuable tool you possess in your personal finance arsenal is your income.  However, we’re often lazy and don’t take the proper precaution to protect our income.  After all we’re just trading our time, which is finite, for money.  

Unnecessary expenses and spontaneous events can quickly erode our monthly cash flow.  Our income is extremely important because for most of us our earning potential, as well as earning years, are limited.  So if we don’t have a plan to optimize the money we earn today we’ll be forever loathed by our future selves.  

Lucky for you, I want to share a tool that has made my life easier and I wholeheartedly believe it can have a huge impact in your life.  It’s called YNAB, short for You Need A Budget.

I first heard of YNAB from a close friend who touted it pretty highly for many reasons which I’ll hit on here soon.  After that, I heard about it again from a  prospect who was thoroughly impressed.  This was enough to get me to see what the buzz was about.

Jesse, the founder of YNAB, had a primary vision of developing a system that was able to plan for the future before it happened while having the flexibility to handle change when it occurred.  Jesse and his team at YNAB get it.  They get that expenses aren’t easy to plan for but the process of budgeting can be one of resilience.  YNAB’s three primary rules are:

  • Rule One: Give Every Dollar a Job
    • This is the foundational requirement of having a successful budget.  Your money is important because you’ve exchanged your time for it and your time is the most valuable resource you have.  Don’t let your dollars slip away because you failed to give them a specific and important job.  Determine what’s important and assign your dollars.   
  • Rule Two: Embrace Your True Expenses
    • Distant expected expenses don’t have to catch you off guard when the time comes.  You can start planning and incrementally saving today to smooth out those times when large non-monthly bills come due (insurance, taxes, car repair/maintenance, etc.).
  • Rule Three: Roll with the Punches
    • Budgets are meant to be a living plan because uncertainty happens and expenses change or come up.  It isn’t set it and forget it.  When change happens adjust your categories to accommodate it and make it less painful.  If you’ve forgotten to budget for a gift then take the funds from another discretionary category (entertainment, clothing, etc.) and carry on with life.  


Get Ahead

One of the flagship beliefs of YNAB is “getting ahead” or not living paycheck to paycheck.  I’ve long been a proponent of this idea but never fully realized its impact and therefore have never really shared it.  

The conventional method has been to pay this month’s expenses with this month’s income.  However, bi-weekly and end of the month pay periods tend to put our personal finances and budgets in a crunch.  Because I care about you I want you to know there is a different way.  A way that will empower and give control back to you.  

Basically, you want to get to a position where THIS month’s income is paying for NEXT month’s expenses.  What this means is that you’re no longer dependent on the current month’s income to pay for your current month’s expenses, you’re creating a buffer.  It’s refreshing to start off the new month with the money and the plan for everything that month.

Just the psychological and emotional relief knowing a burden has been lifted is worth it!  You have the power to tell your earned money where to go instead of playing catch up.  Tell each dollar where to go and it will go (Rule 1).

More than likely this will require you to put back a little each month until you get an entire month’s wages saved.  If you can expedite this process be sure to as it’s well worth it!  I also recommend having a couple hundred dollars in your account as a buffer so you don’t happen to overdraft.


What’s bothered me the most about other budgeting software’s is the lack of flexibility.  The struggle was real if you were trying to update a category amount, budget far in advance, or expenses and income didn’t fall within that specific month.  

One thing I grossly disliked about using a prior budgeting software, whom I’ll leave unnamed, was that they wouldn’t let you create the budget until that month started!  Kind of defeats the purpose of having a plan.  YNAB allows you to set expected expenses far in advance.

YNAB is a perfect tool for those whose expenses often change month-over-month.  This is accommodated by allowing for easy updating of budget categories (Rule 3) while always having a figure displayed of what you have left to budget.  If you ever under-budget or forgot to budget for something (which never happens, right?) you can easily pull funds from another category.


One supreme truth of budgeting is that you need to be aware of your income and expenses.  What I love about YNAB is that it helps you continually stay aware.  With YNAB you can choose to manually enter transactions or import them from your bank.  Newer versions may auto sync with your bank but I’m not certain.  

I personally have chosen to manually enter transactions because it forces me to be aware of every transaction that we incur.  For me, manually entering every transaction has the psychological effect of paying for the transaction with cash.  

Not only are you able to be aware of your transactions YNAB is as well.  Now before you get creeped out let me explain.  For some reason, if you overspend in during a month it will take that deficit from next month’s budgetary income.  So if you normally bring home $2,000 per month and you happen to overspend $50 this month you will now only have $1,950 to budget for the new month.  It keeps tabs on it for you so you don’t have to worry about digging yourself into deeper hole.

Planning made easy

Like I said above, YNAB has made planning for the distance future very easy (Rule 2).  One of my favorite benefits of YNAB is that it allows for sinking funds.  Sinking funds are funds that you incrementally save for with the expectation of using the funds in the future.  Some examples of sinking funds are auto insurance (if you pay every 6 months or annually), home maintenance, auto maintenance or repairs, vacation, education expenses, medical expenses, etc.

For example, I like to prepay my auto insurance every 6 months because it’s cheaper than paying it monthly (companies often offer a discount incentive for prepaying).  However, in the past I’ve never had $450 to pay in any one month.  So instead I started saving $76 per month for 6 months and paid the insurance company when my insurance was up for renewal.

It’s as if you have multiple “sub-accounts” in which you can keep tabs on.  It’s allowed Amy and I to keep our checking and savings consolidated into one high-yield account.  This convenient is for us because we don’t have to move funds between various other accounts but instead keep track of it through YNAB.  




YNAB isn’t an account aggregation software.  This means they don’t sync with outside accounts to provide information, values, and other data under one roof.  For example, some vendors allow you to link multiple bank accounts, investment accounts, and loan accounts up to your account and display all the aggregate information.  This would allow for a comprehensive financial snapshot of assets, liabilities, and cash flow.  There are other solutions that do this and some individuals may find this benefit too valuable to go without.


In today’s environment, you can find an abundance of free resources online.  YNAB costs $50 upfront (one-time charge) or $5 per month (recurring).  I can honestly say that it’s provided value well above the $50 cost for us, but then again there may be a free solution out there that could do the same thing.  YNAB does offer its product to college students for free upon proof of enrollment.  You’ll have to evaluate the alternatives and if the cost is worth it.

Device Sync

For YNAB4 you currently have to use Dropbox in order to sync to other devices.  Dropbox is used to save the “budget” and then the YNAB app communicates with Dropbox to upload it.  This results in categories and transactions not always being up-to-date when you open the app.  However, this issue is resolved via the new web-based YNAB version.


Final Thoughts

Don’t let YNAB’s small size fool you.  They are evolving quickly and are onto something as seen by the development of a loyal cult following.  More than anything, I believe in their vision and how they’ve developed a solution to fit that vision.  YNAB is simple to use all while offering various tutorials, webinars, forums, and other resources for your benefit.  If you’ve struggled in the past sticking to a budget YNAB may be your solution as it offers flexibility and freedom.  If you’re after a comprehensive financial command center or cutting edge solution you may need to look elsewhere.  They do offer a 34-day free trial, no credit card information required, for users to experience their software.

If YNAB doesn’t do it for you, it’s imperative to find a tool that will work for you and retain engagement.

Do you have a budgeting solution that keeps you on track?  What solutions have you found most helpful?


Disclosure: I did not receive any form of compensation for this review nor are any of the links “affiliate links”.

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