What is YNAB?


Jeremy BiberdorfBy: Jeremy Biberdorf

April 18, 2023April 18, 2023

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Are you struggling to manage your finances, track your expenses, or achieve your financial goals? If so, you’re not alone. Many people face similar challenges, and it can be overwhelming to navigate the world of personal finance without the right tools. This is where You Need A Budget (YNAB) comes in.

YNAB is a popular personal finance app designed to help users like you take control of their finances, make informed decisions, and ultimately reach financial success. In this comprehensive article, we will delve deep into the world of YNAB, exploring its various features, offerings, and key elements that set it apart from other budgeting apps available in the market.

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Company Background: The Story Behind YNAB

YNAB was founded in 2004 by Jesse Mecham as a proactive approach to budgeting, aimed at helping individuals break the paycheck-to-paycheck cycle and gain control over their finances. Since its inception, YNAB has grown in popularity, attracting thousands of users seeking a user-friendly, comprehensive budgeting tool to manage their financial lives.

The YNAB platform operates on a zero-based budgeting system, which means that every dollar has a job, and users allocate their income to various spending categories and savings goals. YNAB’s approach to budgeting encourages users to plan for both regular monthly expenses and less frequent “true expenses,” such as medical costs, car repairs, and annual fees, ensuring that they are prepared for the unexpected.

YNAB’s Four Rules for Successful Budgeting

One of the key reasons YNAB stands out among its competitors is its unique and effective budgeting methodology. The app is based on four simple rules that, when followed, help users achieve financial stability and success. Understanding these rules can help you better appreciate the value YNAB brings to personal finance management.

  • Give Every Dollar a Job: The core of YNAB’s budgeting philosophy is assigning a purpose to every dollar you earn. This means that when you receive income, you allocate it to specific spending categories or savings goals, ensuring you have a clear plan for your money. This approach helps you prioritize your financial needs and wants, making it easier to avoid overspending and to stay on track with your budget.
  • Embrace Your True Expenses: YNAB encourages users to plan for both regular and irregular expenses. By budgeting for “true expenses,” such as annual insurance premiums, property taxes, or holiday gifts, you’ll avoid surprises and be better prepared to handle these costs when they arise. This practice helps you build financial resilience and reduces the likelihood of needing to rely on credit cards or loans to cover unexpected expenses.
  • Roll with the Punches: Life is unpredictable, and YNAB understands that sometimes you’ll need to adjust your budget to accommodate changes in your circumstances. If you overspend in one category, YNAB encourages you to reallocate funds from another category to cover the difference, maintaining the zero-based budgeting principle. This flexibility allows you to adapt your budget to your changing needs, ensuring that you stay on track with your financial goals.
  • Age Your Money: The goal of YNAB is to help you break the paycheck-to-paycheck cycle and eventually reach a point where you’re using money you earned at least a month ago to cover your current expenses. By “aging your money,” you build a buffer that reduces financial stress and allows you to plan for the future more effectively. YNAB’s platform tracks your progress in aging your money, motivating you to save and make better financial decisions.

By following YNAB’s Four Rules, users can establish a strong foundation for their financial lives and make steady progress towards their goals. The app’s features and tools are designed to support these rules and make it easy for users to implement them in their daily lives. This unique budgeting methodology is a significant factor in YNAB’s success and the value it offers to its users.

YNAB: A Comprehensive Budgeting Tool

YNAB offers a range of features designed to help users manage their finances, including the ability to link financial accounts such as bank accounts, credit cards, and investment accounts. The app allows users to create custom spending categories and set spending limits, giving them full control over their financial lives.

One standout feature of YNAB is its mobile app, which allows users to track their spending on the go and make informed spending decisions in real-time. The app also offers a Direct Import feature, enabling users to automatically import transactions from their linked financial accounts, ensuring that their budget is always up to date.

Investment Accounts and Budgeting Goals

While YNAB primarily focuses on budgeting and expense tracking, it also supports investment accounts, allowing users to track their overall financial health in one place. The app encourages users to set financial goals, such as building emergency funds, paying off debt, or saving for a down payment, and provides tools and guidance to help them achieve those goals.

Fees and Expenses

YNAB offers a 34-day free trial, allowing users to test the platform and determine if it’s the right fit for their budgeting style. After the trial period, YNAB charges a monthly fee of $14.99 or an annual subscription of $99, which includes all of its budgeting features and access to its mobile app.

Security and Privacy

YNAB takes user privacy and security seriously, and its terms of service state that the company will not sell user data. The app requires bank credentials for its Direct Import feature, but it uses bank-level encryption to protect user information. Users can also opt for manual entry of transactions if they prefer not to link their financial accounts.

Customer Support and Community

YNAB offers comprehensive customer support, including access to a vast library of articles, video tutorials, and workshops designed to help users get the most out of the app. The platform also has an active community forum where users can ask questions, share tips, and connect with others who share similar financial goals.

What is YNAB – Final Thoughts:

YNAB is a comprehensive budgeting tool that offers a wide range of features, a proactive approach to budgeting, and a user-friendly interface. Its zero-based budgeting system and focus on helping users achieve their financial goals make it an attractive option for both new and experienced budgeters.

If you’re looking for a powerful, customizable budgeting app that encourages a proactive approach to managing your finances, YNAB is definitely worth considering. With its 34-day free trial, there’s no risk in giving it a try and seeing if it’s the right fit for your personal finance needs.

Click here to get started with YNAB today.

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Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

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