YNAB – You Need a Budget

I am loving budgeting again and wanted to create a page to share with everyone my job for YNAB – You Need a Budget.

There are 4 rules for ynab:

  1. Give every dollar a job
  2. Embrace your true expenses
  3. Roll with the punches
  4. Age your money

The app/website make it very simple to follow the 4 rules, and in turn, help you become a better budgeter. Figuring out all of your expenses is the hardest part…but also the most cathartic.  Once you realize that having an annual $1,200 insurance bill means that you really should be saving $100/month towards that expense…it becomes that much easier to plan ahead and not be surprised by big bills down the road.

Here’s a video from one of their online webinars (many of which happen multiple times a week at different times) that explains how to go about using YNAB for the first time:

Lastly, here’s an explanation that I found on reddit.com/r/ynab that explains it fairly well:

Think of YNAB as an envelope system for your money. You get paid so you add your paycheck as an income transaction and the money shows up in To Be Budgeted. TBB is the pile of money you own that you’re going to put into envelopes.

In YNAB *Budgeting* refers to the act of assigning money from TBB to a budget category. This is also called *funding* a category. This is like taking $300 from your pile and putting it in an envelope to be spent only on one particular expense, like groceries.

*Transactions* are when you actually spend the money. You spend $50 on groceries and enter that transaction and tell YNAB to take the cash out of the grocery envelope. Now you only have $250 left to be spent on groceries.

If you don’t spend all the money in the grocery envelope in October, it will automatically move the leftovers from the October grocery envelope to the November one. The next time you get paid, you will go through your categories and decide which categories to add more cash into.

YNAB has no idea how *you* want to allocate your funds. Every time you get paid, you will decide which envelopes are most important and must get funded first. You can use the monthly funding goals or scheduled transactions to help you make those decisions but the allocation of funds cannot be automated.