Adjusting to YNAB

A lot of folks in the personal finance and financial independence spheres are familiar with the program You Need a Budget (abbreviated to its acronym YNAB). I’ve pooh-poohed it for over a year, trusting my pen, paper, spreadsheet system but after a commenter on this piece pointed out that the program runs almost flawlessly in a WINE bottle* I figured I might as well try it out.

30 minutes later I was hooked. 2 hours later a purchase was all but assured.

This isn’t a formal review of the software. This is basically my reaction to the software, its methodology, and how all of that makes me feel as a steward.

YNAB’s methodology breaks down into 4 Rules:

  1. Give Every Dollar a Job. Because the budget system and 3-month forward view works so well, you can budget forward much more effectively. I have very good data for the past, but counting out future cashflows – even fixed expenses – was always something my system had a very hard time doing. So I had to leave buffers all over the place to account for this haziness. I’m letting things stay a bit hazy for now, but in the future YNAB will let us be more aggressive about debt repayment and post-tax investment contributions.
  2. Save for a Rainy Day. This is something we’ve always done, but YNAB’s way of segregating funds is more elegant.
  3. Roll with the Punches. Oh yeah. We’ve done this a lot. Readers from the beginning (18 months ago!) will know how much has changed.
  4. Live on Last Month’s Income. Previously I kept a Dave Ramsay-esque $1,000 general buffer because we are in debt repayment mode, but we’re going to work up to filling a full month buffer, as it helps YNAB’s system work better. Initially I thought we had this already, but then realized I’d made an error in handling how our primary credit card was imported. We may have the buffer by April, but for sure we will have it by May of this year, and then can resume more aggressive external savings.

How do I feel?

Honestly, a bit humbled and chastened. I realize that, while I’ve made a lot of progress, there’s a lot more I can learn about future planning. Two mornings in a row I’ve woken up earlier than planned, my sub-conscious having chewed on details during the sleep, and spent my first waking minutes correcting errors and tweaking our YNAB setup.

Hubris is a nasty little bugger. I think I’ve let myself get a bit too excited about sustainability initiatives and almost dropped the ball on taking care of the core family financial health. Taking extra care is doubly important now that we are on a single income. Then again, having the mental bandwidth to focus so hard on adjusting our budget system is a possibility space created by me being home. Like all things in life, growth occurs in many directions, and from many sources.

Do you YNAB?

*For non-Linux heads, YNAB lacks a native Linux version, so to run it on Linux you have to use WINE, which is essentially a Windows emulator.

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6 Comments on “Adjusting to YNAB”

  1. Kelly says:

    I love YNAB! We’ve been using it for a year and a half and it’s been such a success for our family. We have our buffer in place and are in intense debt-payoff mode. I never would have been able to accomplish that without the YNAB software. I hope it works well for you!

  2. Ziggurat says:

    Yep, love YNAB, and this from someone who hates most software. But occasionally software is just very elegant and this is one of those times. It was frustrating for a very short time until I latched onto the fact that it was designed around Rule #1: it’s mostly about the *purpose* of the money, not so much about which account the money is sitting in. Once that clicked, I realized that it really was a better way to view money.

    We’re well past debt repayment (close to FI), but still find it very useful to plan ahead for major expenses, as well as tracking where we can optimize spending.

  3. […] my newest tool, helps but I still think we’re probably going to overspend a bit this year. But it’s […]

  4. Mom says:

    I *love* YNAB – and if you haven’t already paid for it, attend some of the live classes, they give away a license during them. Several friends have gotten a free copy just for attending the live classes (which are at all kinds of times and days). While paying off debt, I had both a DR-style $5k efund *and* a full buffer. Of course, I started YNAB when Rule 1 was living on last month’s income!

  5. Tracy says:

    Do you have a YNAB referral link?


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