The YNAB budget is the best way to budget
YNAB is short for You Need A Budget and it’s by far the best way to gain control of your finances. No, it isn’t designed to help you track your investments, nor is it for handling multiple IRA’s or your secret offshore bank account. What it IS going to help you do is break the paycheck to paycheck death spiral that chokes the life out of you. And they have an iPhone app! Sweet!
What YNAB will help you do is prioritize. It will help you decide between things that are important to you and things that aren’t. It’s always funny to me how things that aren’t important to me have a way of rearing up and DEMANDING attention … and dollars.
The philosophy behind this award winning software is why it’s better than any other and that philosophy can be summed up in their 4 Rules of Budgeting:
1. Stop living paycheck to paycheck. You’ll be blown away by how their system eliminates “paycheck-to-paycheck” from your vocabulary and your life. I’ve never seen anything quite like it.
2. Giver every dollar a job. This is what’s referred to as “zero based budgeting” and it turns the traditional budgeting method on it’s head — completely upside down. Zero based budgeting traditionally is time-consuming and exhaustive but NOT with YNAB. The software does all the work.
3. Prepare for the rain. You know the day is coming when you’re going to need a lot of cash to cover an emergency, a semi-annual insurance premium, or new tires for the car, so YNAB helps you prepare for those events.
4. Roll with the punches. Even with the most sophisticated and thorough planning, you can overspend in a category, so YNAB spreads that overage across the next month’s budget where it can be absorbed more readily. YNAB designed their system with a buffer to help you cover accidental overspending.
That last rule, “Roll with the punches,” is what really motivates so many people to use YNAB.Budgets aren’t meant to be written in stone. Sometimes you DO have family drop in from out of town, sometimes you DO need to buy a new pair of work shoes, sometimes you DO have to fly out of town to a funeral. Surprises happen, and when they do, most people who are already struggling to live within a budget just give up, or fall woefully behind. YNAB helps you get over those challenges in an intuitive, simple, and effective way.
YNAB doesn’t encourage you to give up saving for an emergency fund. No, you still fund your savings for emergencies and at the same time, all those little leaks that previously went unnoticed are plainly visible. Money you know about can be re-captured – and that is the beauty of YNAB.