YNAB Pros and Cons from a Former Mint User

Hi, everyone.  This is Lara Hammock from the Marble Jar channel and in today's video, I'll tell you about the budgeting app YNAB -- what I like about it and what I'm not so crazy about.

I did an overview/tutorial video on YNAB, which is a popular budgeting app.  I've just switched over to YNAB from Mint and in this video I'll discuss the Pros and Cons of YNAB from the perspective of a long-time Mint user.

If you've seen my YNAB tutorial, you have an idea of how YNAB's approach to budgeting differs from traditional budgeting.  I would say YNAB is a combination of zero-based budgeting, which was popularized by Dave Ramsey and involves budgeting every dollar and paycheck budgeting, which is a method of mapping out expenses based on each paycheck.  

All that to say, coming from a Mint user, this took a little getting used to.  With Mint, you spend some time setting up your budget with amounts for each category.  These amounts remain the same for each month.  Then you track your actual purchases against your budgets by grouping your actual spending into budget categories.  You get an idea of where things are going, but the slate wipes clean every month, so if you were a little over on a couple of things, no big deal.

With YNAB, you don't forecast your income.  You can only budget money that you actually have in your account.  There is much less forecasting and much more reality-based planning.  In addition, YNAB forces you to be more actively engaged with your budgeting with notifications, alerts, and actionable budget views and colors.  Plus, YNAB helps you to accumulate money in your budget categories for future purchases whether they are quarterly insurance payments, saving for a new car, or saving for your kids' college.

PROS

Okay -- first let's go through the Pros for YNAB.  I've been very impressed with the app, so this list is much longer than the Cons.

• Getting Started - YNAB allows for imports, so you can import in transactions from another budgeting software or spreadsheet.  For a budget nerd like me, this is nice since I wanted to import transactions all the way back from the start of the year.  In addition, if you link your bank accounts, the bank balances reflected in the app should mirror your actual accounts to within a day or so.  There are also ways to reconcile your account if you can't figure out why the amounts are wrong.  Mint is missing a reconciliation feature.
• Budget Categories - Setting up your budget is a complete dream compared to Mint.  You have complete control over adding, deleting, and editing categories.  In addition, you can make new budget groups to put the categories in.  YNAB has it's own groups by default, but you can add or delete whatever groups you want and make them contain whatever budget categories you want.  Mint will let you make new budget categories, but you have to do it within their weird category group and it will not let you delete the default categories, so you are left with a TON of unwanted stuff to weed through every time you want to tag a transaction.  Plus, YNAB allows you to manually sort your categories to however you want to see them, whereas Mint only sorts based on its weird category groups making it hard to know where things are.  YNAB also has the ability to choose budget accounts as favorites which automatically show up at the top of the list -- for areas where you may be particularly interested in limiting spending for the month.   I also love the fact that each group has totals for budgeted, activity, and available.
• Approving new transactions - once you link your bank and credit cards to your YNAB account, it will start to bring in transactions once they have cleared.  This is another fantastic thing if you have been a Mint user.  Mint does this, but it intermingles new transactions in with the old, so you have to pick through old transactions to try to find new one that have been imported.  It's annoying.  Not only does YNAB alert you when there are new transactions, it houses them in a separate spot and waits for you to approve them before putting them in with everything else.  It's great.  Also, categorizing transactions is super easy.  First of all, you only have your own budget categories to pick from, unlike Mint where you have to scroll through all of their bizarro categories with complicated nested subcategories.  But perhaps the best thing is that YNAB remembers the last category that you used with a vendor and puts that in as the default.  So, for every transaction from a vendor that you've previously used, you usually just have to approve it, rather than choose a category.  It's a huge timesaver for the activity that you do the most with budgeting apps.
• Manually adding transactions - Because it can take a while for transactions to be automatically imported into YNAB, many users add new transactions as they make purchases.  It helps them to stay on top of their budget better.  YNAB has some great features for adding new transactions.  In addition to defaulting the category to the last one used, it has GPS suggestions which remember where you put in vendors previously.  These are all enormous timesavers -- sometimes all you need to do is put in the amount and it’s done.
• Search - Mint's search is fine, but you can't search on the memo field, which YNAB allows you to do.
• Notifications - These last two are the real game changers if you ask me.  Everything else makes laborious tasks easier, but these two things help to change your behavior, which is what you want from a budgeting app.  This is less relevant to the web app, but if you use YNAB for mobile, the notifications are amazing.  YNAB notifies you when you have new transactions to approve AND it notifies you when you have overspent in a category.  This badge shows you the number of tasks that you need to do in YNAB.  And here's the thing -- its persistent -- meaning that it won't go away just by opening the app.  You actually have to either approve the transactions or take care of the overspent category in order for the badge to go away.  And if you are the kind of person who can't stand badges on your phone -- this is a real motivator.  Mint has ridiculous notifications that are not actionable and their notifications aren't persistent, so you don't really need to do anything to get them to go away.  And the final Pro is
• Rollover - This is pretty much the sole reason I now recommend YNAB to my financial mentoring clients.  Your available amount, as long as it is positive, rolls over to the next month.  So, say I budgeted for $200 for household purchases, but I only spent $50 this month, $150 rolls over to next month and shows up in available.  Why is that important?  Because it allows you to save.  Save for the insurance bill that only comes two times a year, save for Christmas every month, and save for much bigger things.  Mint does not have a great way of doing this, so you have to do a bunch of reporting on your own to show savings.  Note: I know that Mint has a rollover feature that you can turn on, but it is ugly and messes up your reporting, so I stay away from it.  

So, those are a lot of Pros.  Let's quickly go through the

CONS

• Price - YNAB is not free.  It's about $7 per month. Granted that also means you get to have your budgeting experience ad free.
• Setup - Set up can be a bit of a challenge in YNAB.  It's actually a little easier if you have very little money in your accounts, but if you have some savings, YNAB requires that you "give every dollar a job," so people who are used to having some money just as a cushion have to make decisions about what category to put that in.  I actually have a budget category called savings, which is highly frowned upon in the YNAB community, but for me I had too many decisions to make to handle that differently at the time.  The other thing that isn't great is that YNAB only seems to pull transactions from your bank starting today.  Both Mint and EveryDollar pull some historic transactions -- about a month's worth, but once you link your accounts with YNAB, you will have the starting balance -- and that's it!  I prefer to have some historic transactions to work with right away, but it does make it simple.
• Income - Income goes into a big vat called To Be Budgeted from there it is distributed into all of your budget categories.  Coming from Mint, where income was just another positive budget category, I'm a bit unnerved by this.  There isn't a transactional bread crumb trail to tell you what income went into To Be Budgeted and how it was distributed.  I would also love to have a comment section on how money was budgeted and why it might have been transferred to a different category.
• Transactions - YNAB brings transactions into the app, but it doesn't seem to import quite as much information as Mint does.  As a result, sometime you have no idea what a transaction is and have to go back and look at the original transaction from your credit card company.
• Mobile App - Mostly the mobile app is gorgeous and easy to use, but there are two problems that I think are fairly serious.  1) the screen is more narrow, so they decided to only show budgeted and available.  That means activity, or how much you have spent in a category this month is hidden, as is the list of transactions.  You can get to it, but it is buried and this is one of the things I look at the most for budgeting.  This is not a problem in the iPad app since there is a wider screen to work with.  Perhaps more seriously is the second issue — the mobile app does not have a search function or a list of transactions.  Like none.  So, if you want to find a previous transaction, you have to remember what category it was in AND the month and then dig back through the activity log in the category to find it.  My work around is that every month I download a complete export of all my transactions, put them in a Google spreadsheet, and search that.   My very last complaint is that YNAB doesn't give you the ability to export a filtered search — for example, in Mint I can export only transactions from this year, but YNAB only has one export option and that is to download everything.

So, those are the Pros and Cons as I see them.  I've switched over, so clearly the Pros outweigh the Cons for me.  I've come to believe that the $7 per month fee is worth it at almost every socio-economic level if you are really using the app since it shapes your behavior and requires more engagement from you, so you will almost certainly be spending less and planning more.  

Let me know what you think.  Comments are always appreciated and thanks for watching!