YNAB or, “You Need a Budget”, is one of the most popular personal finance tools that not only helps you budget, but also helps you keep track of your spending. YNAB is an online tool, making collaboration very easy.
First of all, security. Because your own personal finances are involved, YNAB has taken security very seriously, and used the best protection and encryption techniques available, meaning your data is very safe. Possibly the easiest way for someone to hack your account is to guess your password, so make sure you use a secure password.
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YNAB costs USD5.00 per month, or USD50.00 per year, but you can try it free for 34 days before you have to provide your payment details if you wish to continue using it. Signing up is really easy, just go to www.ynab.com, click the blue free trial button, then enter your email address and a secure password, that’s it.
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An email will be sent to your address with a link you need to click to confirm your email address, do this now. Once confirmed, the YNAB website will open ready for you to start setting up your budget. Click the green “Create a new budget” button, enter a name for your budget and set the other settings, then click the “Create Budget” button.
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Now set up your accounts. YNAB has two types of accounts, Budget Accounts which represent accounts that hold money, and Tracking Accounts which represent accounts such as loans. Click the “Add Account” button and add your first account, such as your checking account. Enter a name, then select an account type from the drop down list.
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YNAB has the option to connect up with your bank account and automatically import transactions into YNAB to save you having to enter any expenses from the bank account manually. We won’t activate that feature just yet, so remove the tick from the Transaction Import option, enter the current balance of this account, and click the “Add Account” button.
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Add any other accounts you have including cash on hand, then click the Budget menu. At the top is a green box which shows total available money, and to the left of that is the month you are budgeting for. Under this is the list of accounts, grouped by category. Expense accounts are called categories.
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To add a new category, hover your pointer over the group heading you want to add the new category to and click the plus icon that appears. Enter a name for the category and click OK. You can delete a category by clicking it, then clicking the Edit button that appears on the right and selecting Delete. To start budgeting, first add recurring expenses, such as power & telephone bills.
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On the All Accounts menu, click the “Add a transaction” button and enter the required information for the transaction in each column. In the date column you can set a recurrence pattern. The save button is on the right end of the row. If you have regular income, you can also add this the same way, entering the amount in the Inflow column rather than the outflow.
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Next, go to the Budget section and click on the dollar amount in the “Budgeted” column for each category and enter the amount you would like to assign to that category. When you select a category, on the right hand side an “inspector” opens giving information about that category, including upcoming recurring payments.
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As you budget, your available funds amount will update showing your how much you have left. To enter expenses as they happen, select the account that paid the expense on the left panel, and click the “Add a transaction” button and enter its details. All recurring expenses show greyed out until they are in the month they are due.
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Before an expense will show in the Activity column of your budget, it has to be cleared. This is like reconciling your bank account. In the list of transactions, click the cleared icon on the right hand side of the transaction list. As transactions are cleared, make sure the cleared balance showing in YNAB matches the real balance for that account. We strongly recommend you go to www.youneedabudget.com/learn and read the Quick Start and User Handbook articles for more information. Also view our video for more detailed explanations.
