You Need a Budget: A Review

Posted on October 1, 2008 
Filed Under Homeschool, Reviews

Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. Charles Dickens

With all the scary economic news swirling through the airwaves, many people are suddenly realizing they need to dig in, retrench, and get a firm grip on their finances. Tracking every penny comes naturally to a few lucky folks, but for many of us, it’s an uphill battle.

As a bibliophile with a confirmed visual-verbal learning style, I have come to realize that numbers, and anything related to them, don’t come naturally to me. In order to be a good steward, and to teach my boys good money management habits, I went looking for something that would not only work, but make sense to me.

After trying all the usual suspects (Quicken, Quickbooks, MSN Money, and a few spreadsheet-based programs), I finally found a financial management system that makes sense. Best of all, it’s quick to learn, easy to use, and very reasonably priced!

What is this miracle tool? It’s called, aptly enough, You Need a Budget. Trust me, you really do, and this is the one program I’ve ever found that helps you create a budget that is based on what you actually spend, and how much money you actually have. It uses an incredibly simple method to automatically build the budget, using real-life numbers, not your rough estimates or hopeful projections. Doing it this way creates a budget that works, and you don’t even have to be a math genius to make it happen!

First of all, there are only four little rules in this money management system, and while they seem basic, they are life-changing, if you’ve never successfully managed your money.

The Four Simple Rules of You Need a Budget:

  1. Stop living paycheck to paycheck
  2. Give every dollar a job
  3. Prepare for rain
  4. Roll with the punches

These four rules seem incredibly simple, but if you’re trying to learn or teach money management, simple is where you need to start. Master these four rules, and you’ll have the budgetary tiger by the tail!

The Spreadsheet Version of You Need a Budget

I started using the spreadsheet version of YNAB in mid-2007, and once I got into the habit of entering transactions weekly, it took less than 30 minutes a week to keep records and track spending. The system is designed so that you can enter data quickly, and the calculations are done automatically, so you don’t need to know anything more than how to enter numbers and read the reports.

The Pro Version of You Need A Budget

Once I got into using the spreadsheet version, and realized how incredibly helpful it was to see not only where my money was going, but also to plan where I wanted it to go, I decided to upgrade to the Pro Version. This is a full-fledged program that can download your information, store repeating transactions, show you what is happening with your money in pie charts and bar graphs, and much more. This is almost essential for a visual-verbal person like me, and it made the money-management process even faster.

Starting Teens on the Right Financial Footing

One of my teenage sons began using it shortly after I did, and he has faithfully followed the four rules and managed his money every week. He thoroughly enjoys it, and knows how to do even more with the program than I do.

As a result of managing his money with YNAB, he was prepared for a rainy day, and was able to replace several hundred dollars worth of tools that were stolen from him, with the money he had allocated for emergencies. The other wonderful thing is that he is watching the financial meltdown with an amazing amount of peace, because he is never living paycheck to paycheck, but is always spending last month’s money as the system teaches.

My Recommendation and the Practical Stuff

You need a budget, and not just any old budget. You need a budget that works, that you’ll stick with, and that makes sense. You Need A Budget, in short. You can’t imagine how simple and practical it is until you try it yourself. You can start with the inexpensive spreadsheet version ($24.95), or go directly into the Pro version ($49.95). Pro is not yet available for Mac, but should be out soon.*

The YNAB website offers extremely helpful forums and almost instant support, as well as nifty online video tutorials. Both versions of the program are available as immediate downloads, and both come with some nice bonus items, including:

  1. Debt Snowball
  2. Income Tax Forecaster
  3. Retirement Planner
  4. Mortgage Analyzer
  5. Car Maintenance Schedule

I never thought I’d be recommending a budget software, but here I am. I’ve shared the good news about it with my family, and we’ve all shared it with friends. Now, with the financial markets in disarray, I’m sharing it with you, because I truly believe it’s the best money management system available, and I know that it works (unless you don’t use it;-)).

*(I use a Mac, which is why I started with the spreadsheet version, but the system itself was so wonderful, and the Pro features so appealing, that I upgraded, and am using it on my boys’ PC. I’ll be upgrading to the Mac version as soon as it comes out.)

10/22/08 addendum: Because of the national financial situation, the development of YNAB Pro for Mac will be a bit delayed. To make the Mac users happy, the YNAB developer has created an excellent free tutorial on how to run YNAB Pro for Window on a Mac, using Virtual Box, which is a free application that will allow you to run PC programs on your poor Mac (you can soothe its wounded feelings after you get your budget under control!). The YNAB forum, blog, and wiki will be there to help you learn everything.

*****

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Comments

One Response to “You Need a Budget: A Review”

  1. Carol Topp, CPA on October 19th, 2008 6:27 am

    Thanks for sharing Janice. The simpler, the better. I teach budgeting workshops several times a year and will lead a Dave Ramsey Financial Peace class at my church in January 2009. I’ve seen lots of budgeting systems. It’s good to learn of another one that worked for you and many others.

    For my pre-teens I use an envelope system so that they can see where their money is going. Then I put them on a clothing budget at around age 13. I pay for the clothing, but they have to keep track of total spending and stay under the yearly allotment. I taught my 16 yo to use Quicken when she opened a checking account with earnings from her microbusiness (giving piano lessons). They learn a bit at a time, like your son.

    Carol Topp, CPA

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