what is a YNAB?

HappyMJ

Ophelia_10 wrote: »

Does anyone else find that it feels a bit hopeless when you first start using YNAB? I mean, when you first set up your categories and 'give every job a dollar'....so, for example, you start putting £20 away towards car repairs, then your car needs a major repair but you've only been doing the budget for two months so you have £40 to pay a £200 car repair bill?

Don't get me wrong, I do love the concept and have started my own spreadsheet based on the concept, but I've found it tricky when things have cropped up in those early stages when you don't have anything close to the ideal figure in your category :-)

You take the money from another category so the car repairs category ends the month at -£160. Other categories will have positive figures and should offset the -£160 so you're no worse off. The £40 monthly contribution to the car repairs category will balance it after another 4 months then become positive again until the next repair comes up.

If the sum of all your one off/annual expenses ends the month as a negative figure then that's the month when you'll be using savings, credit card or overdraft to balance the budget. Future months contributions will bring the overdraft back to zero.

Ophelia_10

I do get that HappyMJ, but then if I take from other categories, you can guarantee that something else will crop up that I should have had money in that category for, but now haven't so then feel like it's not working if I end up having to use credit cards at the end (don't have savings). To be honest I think the best chance of YNAB working is if you have quite a lump sum to put in first and distribute between categories. I'm not entirely convinced it works for people with quite a low income?

I have been using the concept since April but my bank balance never seems to match what YNAB SS says I should have - I acknowledge that's my poor record keeping tho and every month I try to do better lol :-)
I will stick to it as it is nice when something manageable crops up....like my hair appointment or a birthday, and I simply go into that category and use that money for it with no stress and trying to find the money from 'somewhere' - it is a great concept :-)

Frogletina

HappyMJ wrote: »

You take the money from another category so the car repairs category ends the month at -£160. Other categories will have positive figures and should offset the -£160 so you're no worse off. The £40 monthly contribution to the car repairs category will balance it after another 4 months then become positive again until the next repair comes up..

I disagree with this. If you use money from another category (eg groceries) then that category should show a lower balance, otherwise you cannot trust your category balances. Your car repairs category would show a zero balance.

Think of categories as envelopes - you cannot have an envelope containing minus pounds. If you wrote minus £160 on the car repair envelope then the groceries envelope would still say £200 but when you took it shopping you would find it only had £40 in it.

You need to replicate what happens in real life.

emg

If you do a webinar you have a chance of winning the ynab software for free (they give a copy away during each class and you can do as many webinars as you like). I say download the free trial, do the first webinar and you will know whether it is worth buying by the end of the first week. I'm on month 3 now and have saved loads. It makes so much sense to think 'this is my money, how will I plan to spend it?' Rather than just writing down what I have spent in a notebook after it has happened and then being stressed cos i impulse bought shoes and forgot that I needed to put money by for my hair appointment.

HappyMJ

Frogletina wrote: »

I disagree with this. If you use money from another category (eg groceries) then that category should show a lower balance, otherwise you cannot trust your category balances. Your car repairs category would show a zero balance.

Think of categories as envelopes - you cannot have an envelope containing minus pounds. If you wrote minus £160 on the car repair envelope then the groceries envelope would still say £200 but when you took it shopping you would find it only had £40 in it.

You need to replicate what happens in real life.

YNAB is and isn't different envelopes.

All of the envelopes are pooled in one big envelope. The sum of all the envelopes should be positive. There will in the early stages be envelopes with negative figures there isn't much you can do about that. You've got to pay for the car repair. It either comes from the other envelopes or if there isn't enough it comes from the savings envelope or if that's empty it comes from the credit card or overdraft envelope.

Frogletina

Ophelia_10 wrote: »

I do get that HappyMJ, but then if I take from other categories, you can guarantee that something else will crop up that I should have had money in that category for, but now haven't so then feel like it's not working if I end up having to use credit cards at the end (don't have savings). To be honest I think the best chance of YNAB working is if you have quite a lump sum to put in first and distribute between categories. I'm not entirely convinced it works for people with quite a low income?

I have been using the concept since April but my bank balance never seems to match what YNAB SS says I should have - I acknowledge that's my poor record keeping tho and every month I try to do better lol :-)
I will stick to it as it is nice when something manageable crops up....like my hair appointment or a birthday, and I simply go into that category and use that money for it with no stress and trying to find the money from 'somewhere' - it is a great concept :-)

Just replicate real life. If you don't have all the money for a car repair then what would do?

Without savings you might have to delay repairing the car or you may be able to borrow on credit.

Ynab encourages you to build up an emergency fund. Start slowly, maybe delay that hair appointment for a week (I have my hair cut once a year, for me that is enough), walk if you can instead of using the car for all journeys. Look after the pennies.

As to record keeping, I update ynab and reconcile every day.

You don't have to fill all of your categories every pay day, some can wait. I already have my Christmas category filled, but I remember the days when I had to wait for my December pay before buying Christmas presents for my children (often on Christmas Eve) and then having to be really careful as the next pay would not be until the end of January.

I also remember empty food cupboards and the last 10p going into the electricity meter the night before I was paid. Budgeting was the only way I was able to manage on what was a very low income.

Frogletina

HappyMJ wrote: »

YNAB is and isn't different envelopes.

All of the envelopes are pooled in one big envelope. The sum of all the envelopes should be positive. There will in the early stages be envelopes with negative figures there isn't much you can do about that. You've got to pay for the car repair. It either comes from the other envelopes or if there isn't enough it comes from the savings envelope or if that's empty it comes from the credit card or overdraft envelope.

I understand the big envelope concept, which would be the sum of all categories, which would equal what is in the bank account/bank accounts.

The problem is when you come to spend from the positive envelopes, they will show £160 more than there is in the bank account, which in Ynab speak is monopoly money.

The Ynab philosophy is to reduce the category balances to account for the money removed for the car repair.

andyfromotley

There are plenty of free alternatives to YNAB including excel, pen and paper whatever. However YNAB has built up a huge following as it just kinda works. I have tried many of the other systems and never stuck with them. I have been using YNAB since the spring and since the day i started using it i have not been overdrawn or added a penny to my credit card, I can tell you in 3 seconds exactly how much i have in my bank account AND CRUCIALLY what every penny in there is designated for. It has revolutionised my relationship with money.

You can get it cheaper of stream, I think the record on there is £7.75 paid by SeduLous (grrrr) or get it free if you are a student like me. YAH!

It has saved me thoudands i'm sure of it. As you can tell i'm a big fan. But the main thing is to find something that works for you.

craftingmad

I am currently using the free software budgetpulse which seems pretty similar to YNAB in that you can allocate all of your money to set budget categories and each month as you enter your transactions you can clearly see how much money you have left. I have only just started using it (I actually downloaded YNAB free trial first but unfortunately illness struck and I didn't have a chance to use it) and am already finding that it really helping me to focus on my spending as if I don't have enough money in the budget category to buy something - I don't.
Can anyone tell me if YNAB will give me anything extra to the software I am currently using. I really need to justify the expense if both packages are pretty similar.
Thanks

Frogletina

craftingmad wrote: »

Can anyone tell me if YNAB will give me anything extra to the software I am currently using. I really need to justify the expense if both packages are pretty similar.
Thanks

There is a new Ynab being trialled by invited individuals at the moment which is different from Ynab 4, the one currently on offer. This new Ynab is a web version and may be subscription only. It is as yet unknown if there will be a desktop version, although anyone with Ynab 4 will be able to continue using that. I expect that Ynab 4 will soon be withdrawn from sale.

I would say that it is not possible at the moment to compare this new Ynab to other software packages, as all the features are either not yet known or yet built in. Also no prices have yet been announced.