Thursday, January 2, 2014

Tracking your budget.. What the heck is a YNAB?

Once you have painfully penned away a budget, you need to find a way to track your spending to see if you are on budget, or over budget.  Here are just a few ways you can track your budget:

1.  Good old fashion pencil and paper.  When I used this method, I kept a separate page for each budget category and worked it like a checkbook register.  I entered in the budget amount at the top of the page.  On pay day, I would "deposit" the amount of money into each category and as I spent, I would subtract.

Obviously, there are some draw backs to this method.  It is a bit time consuming and there are plenty of places that math errors may be against you!  Also, revising it to meet the needs of an unexpected expense can be messy and difficult!

2.  Spreadsheets.  Spreadsheets are a great way to track your budget.  Not all that skilled at creating spreadsheets?  No worries!  Search the internet and download blank budget spreadsheets that other people have created!  Using a spreadsheet takes all the grunt work out of calculating figures and allows for easy editing!

3.  A computer software program.  There are TONS of programs and I have tried many of them.  The only one I can truly recommend is YNAB.  It has been my software of choice for the past 3 years and I cannot see ever switching to anything else.  YNAB?  What the heck is a YNAB?  Glad you asked.

YNAB is short for You Need A Budget.  It is very user friendly and they even offer free online webinars, both recorded and LIVE,  on how to use the software correctly.  The customer service is second to none!  (NOTE:  I am not being paid anything for this review.  As a matter of fact, the people at YNAB don't even know I'm writing it!  I just love and believe in this software this much!!)

If you go to the YNAB website , you can download a fully functional 34 day trial of the program.  After that, it is $60.  That $60 purchases the software.  There are no monthly or annual costs or upgrade charges (unless the software is dramatically updated, which has only happened once in the 3 years I have used it!  They are very good about giving discounts on the new version to loyal users!)

Also with YNAB, you can download their app to your Android, iOS or Kindle device.  This allows you to check your remaining budget amounts AND enter transactions on the go that will automatically sync to your computer at home.  I enter my gas pump purchase as soon as I get back into my car, that way I don't have that annoying $1.00 hold on my account staring at me while I'm trying to remember what my total was!  This is a great feature!

Another very cool thing is that you and your significant other can both have the app on your phones, both enter transactions and everything will sync to your computer via the Cloud (dropbox).

Anyone who knows me knows I am kind of a geek when it comes to my budget.  YNAB caters to my inner nerd by providing reports that are easy to produce and easy to read.  I find these especially helpful at the end of the year when I'm trying to set up next year's budget!

Finally, YNAB is makes it super easy to edit your budget as needed.  It would be nice if we could carve our budget in stone, but we all know things come up.  In the first few months, you will change your budget A LOT!  This is ok, you are still learning.  HOWEVER, you can only budget what you have!  So if your electric bill is $13 more than you budgeted for, you will have to take $13 from some other category that will still leave enough money in that category to pay it!

Obviously, I <3 YNAB!  I would highly recommend downloading the trial and playing with it.  They give you 34 days to try out the software with all its functions to see if it's right for you!  Download it for free HERE .  While you are at their site, check out the support links for some very helpful information on how to make YNAB work for you!

Which budgeting method are you planning to use?  Make sure you come back and share how it's working!  Good luck!