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YNAB review: Personalized budgeting that accounts for every dollar

With a streamlined interface and the flexibility of unlinked accounts, YNAB can positively impact your wallet and your money mindset

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Editor's Choice
(Image: © YNAB)

Tom's Guide Verdict

YNAB provides powerful and personalized tools for visualizing your accounts and how you spend your money.

Pros

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    Simple, attractive interface

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    Can create custom labels that match how you think about your expenses

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    Easy to get benefit without directly connecting accounts

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    Terrific help, including regular live how-to webinars

Cons

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    Little personal finance context beyond budgeting

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    Many financial institutions require a third party intermediary to make the connection

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    Regular hands-on updates input can get tedious

YNAB has a very clear mission, as reflected in its name – which stands for You Need a Budget. Unlike competing personal finance packages, YNAB is all about budgets. Specifically, about creating zero-sum budgets that are designed around four rules that create mindfulness around how you think about money management and budgeting.  

The idea behind YNAB is to spend with intention, whereby you allocate your income to different expenses. YNAB’s singular focus is its strength, and sets it apart from the other personal finance services scrabbling for attention. Those services, including Mint and Simplifi, offer budgeting as a part of a broad spectrum snapshot of your money management. Generous guidance coupled with its clear focus on budgeting through managing income and expenses make YNAB the best budgeting app around. However, it’s more expensive than the other best budgeting apps we reviewed. Read the rest of our YNAB review to see if its price is worth it for you.

YNAB review: Cost

YNAB costs $14.99 billed monthly, or $8.25 per month billed annually at $98.99. Both plans have a 34-day trial period – clever and useful to showcase the impact the service can have across a full month and change. College students get 12-months free after the 34-day trial.

YNAB review: Features

YNAB has a zero-sum approach to budgeting, and it likens itself to a digital version of the envelope budgeting approach. YNAB outlines four guiding rules around which its service is based: Give every dollar a job, embrace your true expenses, roll with the punches, and age your money. The last rule stands on the foundation of the first three, the idea being that as you become more intentional in your spending, you’ll spend less and be able to use money you’ve saved for more than 30-days.

The service collects your income and expense data and provides a way to categorize your expenses. You’ll assign all of your funds into categories that you can label yourself, and then you’ll use that plan to inform your spending for the month. With a few clicks you can re-allocate funds from one category to another, a powerful visual tool for the mental calculus many of us make when making decisions to spend money.

(Image credit: YNAB)

You’ll next need to set up accounts to populate those categories with actual transactions. YNAB supports importing financial data from U.S. and Canadian banks and select banks from the United Kingdom and European Union. If you don’t want to connect your accounts or YNAB doesn’t support your financial institution, you can directly import QFX, OFX, QIF, or CSV files. Or simply manually enter the information yourself.

(Image credit: YNAB)

Additional tools help you track spending and savings goals, view spending and net worth trends, and navigate loan repayment (represented as another account).

YNAB review: Available Help

YNAB’s help and customized assistance is unparalleled. The initial set-up guides you through the three basic set-up steps; further help is found outside the service on the YNAB Help Center, or via the occasional in-service question mark. The jam-packed Help Center hosts blogs, videos, podcasts, and even live Zoom classes to introduce and complement the YNAB method and service. 

For all its simplicity, using YNAB requires an understanding of the method behind the service, and the interactive classes are incredibly useful for delving deeper and getting your questions answered by a live human. The Zooms cover everything from getting started to maintaining your budget and managing credit cards and debt set YNAB apart from the crowd. The site has clearly organized documentation to walk you through setting up your budget in four steps. Got more questions? You can use the pop-up interface to ask questions, and you’ll get a reply in 24-hours.

We really liked YNAB’s Help Center guidance, which not only helps you get started but gives tips based on what brings you on a journey to track a budget (such as, you’re doing a budget because you have debt or you can’t save money). These scenarios really help drive home the why and how of YNAB’s benefit.

YNAB review: Ease of use

Signing up is simple, and doesn’t require a credit card to start. Just set up your username and password, approve the terms of service, and you’re in. A pop-up bar along the bottom guides you through three steps to set up your budget.

YNAB starts with a basic three steps to get set up, with useful explanations integrated into the interface (but little integrated help beyond that). The first step involves estimating your expenses by entering amounts into predefined monetary events populated across five categories: Bills, Frequent, Non-Monthly, Goals, and Quality of Life. We liked that these category titles and breakdowns are fully customizable – the titles, language, and order can be edited and moved at-will, and you can even add emojis to make something more visually (for example, a calendar next to Bills). 

(Image credit: YNAB)

Even so, the pre-defined category breakdowns and their underlying monetary events made sense because they loosely matched our behavior around those activities. For example, vacation and education are listed under goals; health and wellness under Quality of Life; regular staples like Rent/Mortgage, Electric, Water, Internet, and Cellphone are listed under Bills.

(Image credit: YNAB)

YNAB’s ability to customize these names and actions is a powerful way to make your budget your own, rather than fit your line items into another service’s structure. For example, Mint lets you set targets, but you can’t customize the category labels in a way that matches how you think about the expenditure.

Monetary events each have three corresponding columns for you to complete: Assigned, Activity, and Available. Available represents what you’ve budgeted for a specific event on a monthly basis, and it rolls over each month since that’s your “budget” for that event. Assigned represents how you’ve taken available money from an account and allocated, or “assigned,” it to a given event, thereby giving each dollar in your account a “job” per YNAB’s first rule of budgeting. The Assigned column resets each month, since the amount can vary as needed (for example, assigning funds to home maintenance so you build up savings allocated to that category may not happen every month). Activity represents the transactional data you’ll enter manually or import under a given account, a step that is not as well-communicated as the rest of the onboarding setup.

(Image credit: YNAB)

YNAB stands out for how it specifically works with the dollars you have at the moment, and doesn’t forecast income. Your available funds need to be fully assigned down to zero. You can shift funds on the fly, and see where you’re taking it from.

We liked YNAB’s first step since we generally have a general idea of our fixed and recurring expenditures – either in terms of how much we know we’ve typically spent, or how much we know we want to target as our spend. We also know the activities we’d want to allocate funds to, like home maintenance, eating out, or travel. So this approach worked well to set targets.

The second step is all about adding accounts. You can choose to link accounts (including credit cards) to automatically import transactions, or you can choose unlinked and enter your current balance and transactions manually. YNAB connects directly to some financial accounts, and uses several third-party services, depending upon the account. We experienced the direct connection for a credit card, and the third-party Plaid experience for a different card.

(Image credit: YNAB)

Plaid asks for your username and log-in information for the institution, and uses those details to create a secure link between your accounts and your financial service. We were hesitant at first to give up our information, since we specifically had accounts we did not want to link to. At the time of our review, Plaid informed us that in April it would start rolling out a feature to give consumers choice over which accounts to link to a given service. If the feature is available, consumers won’t have to do anything new and to gain this ability; however, if they’d used Plaid before the update, you’ll need to get an account update from the service you're using (such as YNAM).

In addition to linking accounts, YNAB lets you add accounts manually. We used this nifty feature to create accounts with custom names and balances, and build out our YNAB budget. For a credit card balance, we could choose how we want to pay the bill; we chose to pay the whole card off, and it added this as a payment category in the budget. The concept of unlinked accounts is tremendous, and lets you have greater control on how you construct and represent your digital budget.

(Image credit: YNAB)

Step three is to assign your money to different categories. Once done, you have a working budget that will guide your spending moving forward. Assigning money and adding transaction activity could be clearer in the YNAB, but once you get it, it’s not an issue. You’ll update transactions (or they’ll update automatically if you’ve established a link, to see what your available spend remains). We especially liked how the software could auto-assign funds, choosing priorities in the event you don’t have enough money to fund everything. However, this is a capability we stumbled on by clicking around on the screen; the YNAB interface was light on direction and guidance after taking you through the first three initial steps.

YNAB review: Mobile

The mobile app is clearly designed and easy to navigate, and even makes some abilities more apparent than on the web service. The app interface drops the activity column and is simpler in its presentation, with clear text and color coding. That makes sense since the activity column data is populated based on actions performed and entered elsewhere in the service. 

We particularly liked the immediacy of being able to add transaction data from within the app. That means, if you eat out or shop you could conceivably hop into the app and add your transactions at the time, especially useful if you choose not to link accounts for real-time updates.

YNAB review: Verdict

YNAB’s learning curve is steep. The service requires you to think about how you’re constructing your budget and spending your money, rather than analyzing money you’ve already spent – a hallmark of competing products like Mint. And to get the most benefit, you’ll either have to have accounts linked or you’ll have to manually enter transaction data, a unique and powerful feature. 

YNAB is the only one of the best budgeting apps that lets you fully customize the names of your categories and expenses, and lets you trace your mindful decision to take money allocated for X and move it to Y. The service requires regular inputs to keep it up-to-date, which for some might become a burden over a time. 

Only Simplifi comes close in how you can plan for using your money, but that app doesn’t get into the minutiae of assigning your incoming dollars to specific transactions. If you get in the habit of using the service, though, and once you get the hang of it, YNAB can definitely help change your money mindset and improve your bottom line in a way that none of the other best budgeting apps can. 

Melissa Perenson is a freelance writer. She has reviewed the best tax software for Tom's Guide for several years, and has also tested out fax software, among other things. She spent more than a decade at PC World and TechHive, and she has freelanced for numerous publications including Computer Shopper, TechRadar and Consumers Digest.