YNAB (You Need A Budget) 3 Budget Software Review: Zero Based Budgeting Made Easy

For probably the past 8-9 years I’ve been using Microsoft Money as our main money managing tool.  We enter our receipts and spending into the register in the software on a regular basis – usually weekly – and keep our finances in some semblance of order.  We also use Mint.com to give us a snapshot of how our finances are looking.

While using Money has worked pretty well over the years, the software was recently discontinued by Microsoft, and the ability we had to automatically download transactions into the software have stopped working as of a month or two ago.  While that wasn’t the main reason we used the software, we thought this might be a good time to start looking for a new software that we can use in doing our family budget, and that will work a bit better for actually doing a budget as opposed to just keeping tabs on your money.

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One software that I’ve heard quite a bit of positive feedback about over the last couple of years is You Need A Budget, a desktop budgeting software.  I’ve been putting off trying it for a while now, but this past week I decided to give it a try.

UPDATE: YNAB 4 has now been released. Read a  full YNAB 4 review here.

You Need A Budget 3 Background

So let’s start by looking at the history of You Need A Budget.  YNAB was started in early 2003 by Jesse Mecham, a former CPA with a Masters of Accountancy degree from Brigham Young University.   It sprang from his own family’s desire to have a budgeting system or software that closely paralleled how they wanted to budget, using a zero based budget, and following their four rules (see them below).   The software started as little more than a glorified excel spreadsheet, morphing over the past few years to become what it is today, a full featured stand alone budgeting software.

The software has received great reviews from a variety of sources including Kiplinger’s Personal Finance, CNN and a variety of others.

Four Rules Of YNAB

You Need A Budget is based off of four simple rules or principles that the creators felt could help families build a solid financial foundation.  They are:

  • Rule 1: Give Every Dollar A Job:  Each month you assign each and every available dollar to a spending or savings category.  This is basically a zero-based budget – which I’m a big proponent of.  Assigning all money to a category shouldn’t take very long, and it has the effect of causing you to know more about where your money is going every month.  When money is assigned, it is harder for it to just disappear, which is so often the case.
  • Rule 2: Save For A Rainy Day: Eliminate the roller coaster of income and expenses by anticipating larger less frequent (but still regular) expenses.  For example, car insurance or property taxes.   Insurance due in 6 months at $600?  Save$100  every month towards that expected but less frequent bill.   The result is that you’ll have a better picture of just how much discretionary income you really have.
  • Rule 3: Roll With The Punches:  Allow for failure, and just roll with the punches. Dust yourself off when you make a mistake in the budget, and start off with a clean slate every month.  Adjust your budget, and improve the following month!
  • Rule 4: Stop Living Paycheck To Paycheck: The goal of YNAB is to help people get to the point where they’re not living and dying by that “next paycheck”, but instead are able to live on last month’s income.  That will help to eliminate a lot of stress that people have in trying to time bills and paychecks so that checks don’t become rubber and bounce.  It also helps those who are in a situation where income is variable, and you never know how much is coming in month to month.

The four rules of YNAB are right up my alley, and are completely in line with the budgeting strategies taught by Dave Ramsey (Who’s plans we’ve been following for a couple of years now).    Ramsey is also a big proponent of Rule 1 – giving every dollar a name, and planning ahead for a rainy day.  With those things in mind I’m already getting a positive impression of the software and the basic precepts behind it.  So let’s get started.

YNAB Download And Setup

A while back I wrote a post listing 75 budget software that are available for people to use.  When i wrote that post YNAB was on the list, and was definitely near the top of the 75 that I wanted to try.  This past week I finally decided to give it a go since there was a 34 day risk free trial, and if I didn’t like the software, I could just stop using it.

Downloading – 34 Day Free Trial

If you want to try it as well, click on the link below to get your free trial.   The software is compatible with Windows, Mac, & Linux.

YNAB Free 34 Day Trial

Downloading the software only took a couple of minutes, and the program runs on the Adobe Air platform, similar to one of my favorite twitter apps, TweetDeck. After I updated Adobe Air the software, the program was installed in no time.  It was time to set it up.

Installing And Setup

When you first open the software you have two options – to create a new budget, or open or upgrade an existing YNAB file.  I chose to start a new budget, although for testing purposes you can download a test file from the website if you just want to try it with sample data. It will then ask you if the budget is for personal or business purposes.  I chose personal.

Once you’ve created your file, it is time to add your accounts.  Adding accounts is similar to other software in that it’ll ask for the account type, starting balance and whether it should be included in the budget or not.  For certain savings and investment accounts, I kept them off the budget.  For our checking and savings at our local bank, I kept them in.

Setting up all our accounts took me an hour or so, just because we’ve got quite a few accounts, and I still had to balance them in Money before transferring them over.  For most people it shouldn’t take more than a few minutes though. Easy peasy.

YNAB  Functionality

Once you’ve setup the software, the fun part is actually setting up your budget.  This is where the rubber meets the road with the YNAB software, and the part that will probably take you the longest.

If you’ve previously done a family budget you’ll probably have a decent idea of how much money you’ll need to spend in the major categories of your budget.  If not, it may be time to look at some historical data from bank statements or previous budgets and see if you can come up with an educated guess. Part of the nice thing about the software is rule 3, to roll with the punches. You can setup a budget this month, and if you find you’ve allocated too much or too little, you can easily update it the next month.  The key though is to allocate every penny of income to a saving, giving or spending category.

Our family had previously done a zero based budget, similar to what YNAB uses, but we had been using a simple excel budget spreadsheet. While the spreadsheet got the job done, it was a pain to keep updated every month, and as a result it just never got done.  YNAB carries similar functionality to that spreadsheet that I used to update, it just makes it a whole lot easier to do every month.  You just enter all your income and expenses in the register, and then those numbers  get transferred into your budget screen, deducting amounts allowed to spend in that category automatically!

I took the allocations from our previously setup excel budget, and plugged them into YNAB.  We then adjusted some of the numbers since we now have a child, and some of the expenses have shifted or changed a bit.   So now our budget is setup in YNAB, and whenever we add new income or expenses to the register our budget spreadsheet is automatically updated.  I can’t tell you how happy it makes me to see this all happen so easily and seamlessly!

So what happens if you spend too much on a certain category in a given month?   Will you have to take the money out of another category, or out of next month’s allowed amount in that category?  With YNAB any money left over after all the other categories are allocated is assigned to your YNAB Buffer.  This is essentially income that is available to transfer over to the following month, in case any overages or in-frequent expenses should arise.  Basically in some ways it’s an emergency fund or “unexpected expense” fund of sorts.

Let’s say you spend $500 on groceries when you’ve only budgeted for $450, the software will ask you how you want to pay for that overspending.  You can choose to have the overage subtracted from next month’s grocery budget category or have it reduce your YNAB buffer for next month. For a category that gets used on a monthly basis like groceries, we just deduct it from our buffer. For less frequent expense categories like car insurance or property taxes, I would deduct from the category’s available amount for that month.

The whole idea of budgeting this way is to get to a point where your buffer every month is larger than your monthly expenses, in essence so that you can pay all of your bills with the previous month’s income, instead of waiting around for your paychecks in order to pay the bills.  In other words – getting a month or two ahead of your expenses!  Doing things this way should relieve all kinds of family budgetary pressure.

YNAB Customer Service & Support

One thing that can take a decent software and sink it is if the customer service and support just isn’t there or isn’t helpful.  With a subject that can get as complicated as finances, it’s key to know there will be someone there to support you.

From everything I’ve read online, and from the brief contact I’ve had with Steve at customer support, it seems like their support is second to none.  They’ve got quick response time, and the training videos and support forums really round out the package. If you’ve got a question about the software, or about budgeting in general – the question has most likely already been answered. If not, they’ll get you an answer pretty darn quick.

YNAB Mobile

YNAB also has a mobile app that you can buy for your iPod or iPhone.  The app will allow you to enter and view transactions on your phone, and then sync them to the desktop application when on your home network.   I haven’t had the chance to try this out yet, but it sounds like it should work fine for what it does.  Of course there is an added fee for the app as well.  Please keep in mind you must have the desktop program before buying the app, it won’t work independently.

Buying YNAB

YNAB carries a one time cost of $59.95 for their desktop software.  If you want to purchase their iPhone app as well, there will be an additional cost of $9.99 for that.

If  you’re not sure if YNAB is the right software for you,  the 7 day free trial should give you a good idea if it should fit your needs.  You’ll be able to use a full featured version of the software with no obligation.

We tried the software out at our house before buying it, and were impressed with it.  We think you probably will too.  If you decide to buy the software, we’d appreciate you using our affiliate link below as we’ll receive a small affiliate fee.

Download The YNAB Free 34 Day Trial

YNAB Pros & Cons

So what are some of the pros and cons of the YNAB software?


  • It keeps things simple, and does one thing – budgeting – very well.
  • I love the fact that the software is based on the principles of a zero based budget, and that it implements those ideas so well.
  • Software is easy to use, even for people who aren’t budgeting enthusiasts or computer savvy.  Helpful pop-ups throughout the software will help you through.
  • Good at helping people to break the “living for the next paycheck” cycle – helping people to get ahead!
  • No monthly fees – a one time cost.
  • Great support, and supplemental materials on their site.


  • The software isn’t an in-depth money management software.  It’s a budgeting software.  As such you won’t have a lot of advanced features of a Quicken or Microsoft Money.
  • Wrapping your head around their budgeting paradigm may take a bit of a learning curve for budgeting newbies.
  • No automatic transaction downloads (although it does allow for transaction imports easily)
  • Added cost for the iPhone app.


If you’re looking for an easy to use budgeting software that will help you to get ahead using the principles of a zero based budget, look no farther. You Need A Budget is a simple yet effective tool for  families trying to get tame their spending, and get their finances under control. I’ve been using it for only a short while, but already I’m impressed with how effective it is at helping to identify problem spending categories as well as making a zero based budget easy to do.  I’d highly recommend YNAB for everyone looking to simplify and get ahead.

Try You Need A Budget For Free Now!

Last Edited: 16th April 2014

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    Share Your Thoughts:

    • says

      Have you tried working in an emergency fund or rainy day fund of some sort to allow for those situations that seem to “come up”? If you haven’t, you can set something like that up or budget for it in YNAB, or other programs. That’s what we’ve done and it’s saved our bacon more than once.

  1. Scott Messner says

    I currently use Quicken for my finances but not for my budgeting. I just use an Excel spreadsheet for that. Thanks for the post. I’m going to give YNAB a try.

  2. Doug Vernon says

    Peter, are you still using YNAB? Are you still happy with it?
    I have been taught the zero-based budgeting principles through Dave Ramsey and have struggled to find a program to help me keep it in line. This sees a good bet.
    I always used Burkett, Manage Your Money software, but wouldn’t work on Windows 7.
    Thanks for your work.

    • says

      Yes, I only wrote this review a couple of weeks ago, and we’re still using it. I’m really liking the software as it makes keeping a zero based budget effortless and easy. So i would definitely recommend it – especialy for someone using Ramsey’s principles.

  3. Earle Brown says

    Just curious, in your Mint.com review you mentioned you use Mint and YNAB in tandem. I cuurently use YNAB. How do you supplement or integrate YNAB with Mint?

    • says

      Maybe using in tandem isn’t the right way to say it. I use them both separately to help keep track of our finances. I just use Mint.com as a quick look-in tool to see where our finances and budget are when we’re on the go. YNAB is a desktop tool, so having a web based budgeting tool that works automatically like Mint gives us another option for checking our budget.

  4. AJ says

    Are you still using YNAB? Are you still happy with the software? I need something to help keep us on track with a budget. I have tried just using excel, but I always seem to make it more complicated than it needs to be and get frustrated with it.

    • says

      Yup, we’re still using YNAB. We’ve found it to be pretty good for keeping track of a zero based budget, it’s a constant reminder of how much we’re overspending in certain categories. :) I do prefer our old software – Microsoft Money for certain things (like running reports against tax categories, investments, etc – but for keepipng a budget it’s a pretty good software.

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