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You Need A Budget
Back in April, I wrote a post called How to Set Up a Basic Budget. That post has been very popular (thank you 🙂 ), so I thought today I’d take it one step further and share with you the budgeting tool I use on a daily basis to manage my personal finances.
I highly recommend this tool! It’s made a huge difference to how I manage my day-to-day finances and has taken away a lot of the stress around budgeting.
Spookily 😉 , the tool is called ‘You Need A Budget’ or YNAB for short. I came across it around last August and signed up in September, when I returned from my holiday. Being a complete numbers nerd I’d been researching the tool while on holidays, so I was eager to get to work on it when I returned home!
So what makes You Need A Budget so special? Here are a few of the genuine reasons I love YNAB!
The tool is available as an app
Once you’ve done your budget set up on your desktop, download the app. This allows you to see your budget on the go. This is an incredibly useful addition as you can check your funds before you spend. Ok, there’s always the chance that you’ll decide to ignore YNAB and impulse buy anyway, but, just knowing you have access to your available balance at any time is very empowering and certainly helps curb impulse buying.
You can set up as many budget ‘pots’ as you need
You Need a Budget suggests a number of budget ‘pots’, ie, categories of expenditure for you to share your income into, thereby setting your budget. Technically it doesn’t allow you to over commit your available funds (you can, but it turns bright red and is kinda obvious!). By doing this, you’re forced to budget within your available funds. This is a great lesson in learning to live within your means.
YNAB also allows you to easily set up other ‘pots’ that are more meaningful to your personal circumstances. This makes it easy to tailor the tool to fit your personal needs.
You can update your finances in real time
Once you’ve decided to go ahead and purchase an item, you can log the transaction via the YNAB app immediately! The app will then reduce the available funds, and hey presto, your budget is up-to-date again!
You can share your budget
If more than one of you have access to your bank account, your partner can also download the app. This gives him/her the same access to see the available balance plus they can also log any transactions as they happen. To sync, simply pull down the screen and you’re both up-to-date.
This particular feature is probably my favourite. As the designated finance person at home, I no longer have to answer questions about how much is in the budget for x, y or z. I just say “check YNAB!”. Job done!
It helps you plan ahead
You Need a Budget encourages you to plan for non-regular expenditure, for example, annual transactions like subscriptions, insurances, birthdays etc.
You can also set up ‘pots’ to save for your annual holiday or a special purchase (new car, maybe) and watch the balance grow.
Unlike other budgeting techniques, YNAB only ‘allows’ you to budget the money you actually have. So that makes every pay day even more exciting than it was before. It really is fun replenishing your pots each month or week, or whenever you have money to allocate.
This method forces you to prioritise, making you cut down on ‘luxuries’ if necessary whilst ensuring that the important things (rent, mortgage, food etc) are covered.
A supportive Facebook Group
YNAB has a supportive Facebook Group where you can learn more and share your experiences. It’s a very positive group with lots of inspiring stories of the progress people have made in saving large sums of money or clearing debts.
I joined the group before I got YNAB and was so inspired I couldn’t wait to get started!
It will pay for itself
This is my and many others’ experience. I have saved money by using YNAB so that it has effectively paid for itself. I’ve avoided late payments, reduced interest charges, weeded out things I no longer need etc.
Even if you already use a budget, this will take things a step higher. I was using a spreadsheet previously to track all my income and expenditure, but YNAB has superceeded my spreadsheet and I won’t be going back!
There are so many other benefits to using You Need a Budget that I could carry on writing for hours, but really there’s no point! The best way to benefit from YNAB is to use it.
Like any budget, YNAB is only as good as the information you put in. If you don’t keep your transactions up-to-date then your budget balances will be incorrect and misleading.
I log on to my bank account a few times a week to reconcile my You Need a Budget balances with my bank balances. This is usually a quick task and for a numbers nerd like me, quite enjoyable!
Want to give it a try?
By using the link below, you can sign up for a month’s free trial (you don’t need to enter any credit card details) and experience it for yourself. It’s multi-currency so usable wherever you are. There’s nothing to lose and so much to gain. I love this program and have got my children using it too!