You Need a Budget
By Michael Hedgpeth · June 18, 2014
You Need a Budget

I experienced a financial tailspin that got my attention enough to make some serious changes in my life. I needed to assemble a team that could help me meet my goals. A friend of mine had told me about budgeting software that he had loved that fit with how I liked to budget. I hadn’t taken You Need a Budget (YNAB, pronounced why-nab) seriously until then, but now was the time to dive deeper into this tool to see if it would fit my needs.

What I found was a great software tool created by a team that cared more about serving people and changing lives than making money. This is a critical piece of being on my team: you must be more dedicated to serving others than to enriching yourself. And the small team that created YNAB was dedicated to service over self. This software has changed my life in so many ways; I feel indebted to them to do whatever I can to make them successful.

So what is so good about this software? A lot, but I’ll focus on four aspects:

Simple Enough for Everyone. This was a requirement for me. I needed Annie to be involved, and she isn’t a finance guru. YNAB presents budgeting in such a simple way that non-finance types can understand it with minimal training and make it happen. Annie’s involvement in our goals has been critical to our success.

Focus is on the Right Goals. In other budgeting programs, you’re focused on account balances or fitting your life in the system. YNAB has great systems for keeping you focused on where you want your money to go, and forgetting about the timing of bills or keeping everything balanced perfectly. So now we think about what our goal is and how to meet that goal, month to month. And then we forget about it and live our lives.

It’s Reality Focused. I was helping a friend set up YNAB, and he said to me, “I want to wait until next month to start this, so I can buy a couple of iPhones.” I informed him that buying iPhones was as simple as allocating hundreds of dollars into a category and then spending it. YNAB doesn’t force you into a perfect situation or month. Those don’t exist! You simply tell it what you want to do with your money. That can even include blowing a lot of money on electronics; it’s up to you!

It Plans for the Unexpected. it’s not expecting you to perfectly plan every cent and then rush to the software whenever something changes. It lets you easily change your plan, or just wait for the next month, where the available money will be adjusted to how well or bad you did the month before. A solid system must plan for noncompliance to the plan.

Four and a half years later, YNAB is helping us meet our goals just as it did in the beginning. It is our constant companion through life, always helping us bring together our intentions and our actions. If you’re looking for something to help you meet your financial goals, you owe it to yourself to look at YNAB.