An Easy Way to Track Your Spending and Build Your Savings

couple using a budget app
Photo by mavo / Shutterstock.com

Are you tired of living paycheck to paycheck? Wondering if you’ll be able to pay your bills on time, and whether you’ll ever be able to save?

That’s where YNAB (short for “You Need A Budget”) comes in. If the very mention of “budgeting” makes you nervous, stick with me here.

YNAB is an app that makes it easy to get a grip on your day-to-day expenses, prepare for unexpected expenses and start stacking up reserves for the things you really want in life. In short — a path to gaining control of your financial life.

“It’s not just a tool,” says Lindsey Burgess, YNAB’s chief marketing officer. “We have a philosophy and a method that’s proven. We’ll teach you to do it.”

Here’s the basic idea: Before you spend any money, YNAB allows you to assign each dollar a job — to cover essentials, pay for recurring expenses and target other priorities without resorting to credit cards or late payments.

YNAB also simplifies the process of tracking your spending by allowing you to connect the program directly to your bank and credit card accounts to download transactions. It helps you visualize where you’re spending money that you could use for longer-term goals — like paying down debt or a vacation in the sun.

“Do I want to drink Starbucks every day, or do I want to go on vacation this summer?” says YNAB user Anita Fullmer, an elementary school secretary in Florida. “I have to make that choice. If you see the numbers, it makes it easier not to go to Starbucks every day. You’ve made a plan, and you know you’re moving toward the things that matter to you.”

Gain control of your money

Once they’ve grown accustomed to anticipating and planning for their expenses, YNAB users often feel like they’ve gotten a pay increase, Burgess says.

Eventually they accumulate enough money to create a financial cushion for unexpected costs. They also gain a sense of financial freedom that improves their quality of life.

Fullmer credits the app with teaching her how to live within her means.

“We were living paycheck to paycheck. Now we are one month ahead and have savings,” she says. “It makes you prioritize what you want your money to do. It holds you accountable.”

Giving people financial control is what YNAB is all about, says Burgess:

“When you’re in control of your money, you’re in control of your life.”

The YNAB system

YNAB has developed guidelines for gaining control over your finances. Its four rules for a successful budget are:

  1. Give every dollar a job: In other words, know how you want to use your money before you begin spending it.
  2. Embrace your true expenses: This basically means planning for large and infrequent expenses, such as buying holiday presents, by setting aside a certain amount of money each month.
  3. Roll with the punches: Adjust your budget as necessary. Things don’t always work out as planned.
  4. Age your money: This means working toward spending the money you earned at least a month ago, to avoid living paycheck to paycheck.

You likely will make some mistakes as you learn to be an effective budgeter.

“You have to learn,” YNAB’s Burgess says. “There’s no shame in that.”

Available for both desktop use and mobile devices, the YNAB app comes with tutorials and access to a customer support team. There’s also an online community forum, a weekly newsletter and a weekly podcast.

YNAB offers a free 34-day trial. After that, it costs $11.99 a month or $84 a year. But there’s a money-back guarantee, and the company says users save, on average, $600 in their first two months and $6,000 after a year.

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