How I Set Up YNAB from a Former Mint User

Hi, everyone.  This is Lara Hammock from the Marble Jar channel and in today's video, I'll show you how I set up YNAB to work best for me as someone with maybe a non-standard profile: I'm debt-free and have money left over at the end of the month.  

I'll admit that my profile looks different than most folks starting out with YNAB: we don't have any debt and we generally have money left over at the end of the month.  In addition, I'm a former Mint user and have that standard budgeting mindset, so the way I use YNAB reflects that a bit.  My hope in putting this out there is to provide some ideas to those who may have been really successful in reining things in with YNAB and also those (like me) who budget even when they don't absolutely need to just to keep things on track. 

I've been keeping a budget religiously since I was in college.  Since I like financial data and reporting, I do it regardless of whether we really need it.  We've gone through some lean years, where budgeting has been required to stay out of debt.  But I also budget in times of plenty, which obviously looks a little different.  Right now, my husband has a great paying job which not only allows me to stay at home with our teens, but also to go back to school part-time.  He only plans to do this for another couple of years and I will go back to work soon, so our budget will look different at that point.  Either way, budgeting helps us to know where our money is going and also not to spend all the way up to (and over) our income, even if it should be more than enough.  

So, let’s talk about how I set up YNAB.  First let's cover my 

Budget Groups

This YNAB budget is a dummy account that I have set up for demo purposes.  It has about half the categories of my real budget, but it gives you enough information to get the idea.  The way I set up my budget groups in YNAB shows you that I still have a traditional budgeting mindset.  

• Monthly Expenses - I have a giant budget group, which I call Monthly Expenses.  This contains everything that I think of as living expenses.  If we were to lose income, we would still need to find a way to pay these expenses.  The reason I put them in one large group is that YNAB totals group items for you in the heading.  So, I can see how much I've budgeted for these line items, how much has been spent this month and how much I have available for future expenditures -- particularly in the sinking fund categories.  Coming from a traditional budgeting mindset, I'm used to thinking of income minus expenses.  What's left over can be used for savings or travel.  I still think like this, so I like to be able to make that calculation in my head.  YNAB isn't great about showing you how much income went into To Be Budgeted for the month, but I go to the Reports view and use the Income vs. Expense report to see this.  This report shows you how much you have actually spent, but I also want to know how much I have budgeted against what I have planned to budget, which you can see I put in the group line item description.
• Savings - Next I have a group called Savings.  I only have three categories in this group: my College Tuition, Travel, and Savings.  YNAB teaches you that you shouldn't have a category called Savings -- that you need to be more specific about what exactly you are saving for.  Well, I can't be bothered splitting this up into more detailed line items.  If my hot water heater goes -- it comes out of here.  If we do big things outside of our normal monthly expenses (wisdom teeth surgery, taking down trees, dealing with the flooding in our basement) it usually comes out of this amount.  I also can't be bothered to split my travel up into individual trips.  Again, if we were pressed for cash, I'd probably have to be more detailed, but this level of detail works fine for me right now.
• Reimbursements - People deal with reimbursements in different ways through YNAB.  I have two kinds of reimbursements, personal ones and one for my husband’s work. The personal ones that just normal family reimbursements -- like when I pay for 6 tickets and 4 people need to pay me back — or returns that I am expecting a refund for.  The second kind of reimbursement is for my husband's travel.  He travels a ton for work and puts all of his expenses on a work American Express card.  We are responsible for paying off the card and he then asks his firm for reimbursements.  But for both of these situations, the spending and the reimbursements don't always happen in the same month, which would leave a negative in available expenses and would drive me nuts, so I keep them in their own group.  And finally,
• Credit Card Payments - This is a YNAB default group, which I can't modify that tracks credit card expenses and payments.  Okay, so now let's talk a little about just a few of my 

Budget Line Items

First of all, I use Nick True's advice and put lots of detail in each line item including how much to budget each month and the day of the month the bill is normally due.  I order my line items by whether or not the item is a

• Sinking Fund - You can also call this an accumulating fund.  YNAB calls these True Expenses, but they are just line items where you want the money to accumulate from month to month.  Some things that I have in here are Auto Expenses, Insurance (which I pay every 6 months), Xmas, and Kids Activities.  I have an idea of how much to put in each month, but the expenses don't always come every month, so I need those totals to roll over.  I keep my non-Sinking funds on top -- these can go to zero at the end of every month.  And my Sinking funds on the bottom.  I have them delineated by this ridiculous description for my first Sinking fund.  Why do I do it like this?  At the end of every month, I scrape down my non-Sinking available funds into Savings.  If you are paying off debt or saving for an emergency fund, you can scrape into one of these accounts.  Basically, I do it to reset each line item so that I can start from zero the next month.  A couple of notes about several of my line items.  I use
• Groceries - to cover all consumables.  So that includes You things like shampoo, laundry detergent, and  as well as actual food stuff.  I use a line item called
• Household - as a place for all non-consumables (new kitchen spoons, replacement dehumidifier, etc.) but also as kind of a dumping spot for other things that don’t have a clear category.  That includes parking fees, outings with our family, or newspaper subscriptions.  Each of us also has our own 
• Personal Fund - My husband and I both get a certain amount each month for personal spending that acts as a sinking fund -- meaning whatever doesn't get used this month rolls to next month.  It's different per person depending on needs -- I stay at home, so don't need nearly as much spending money as he does.  This is how we cover outings with friends, clothing purchases, and our own subscriptions that don't benefit anyone else in the family.  Last, I have a category called
• EXTRA - This line item helps me to "roll with the punches" the way that YNAB requires.  Rather than steal from other categories if our electric bill is particularly large this month, I have this EXTRA account to cover anything that needs an extra bump for that month.  I don't log any expenses to this line item, I just use it as a piggy bank to fund other accounts.  And finally, let's talk about my

Accounts

• Simplicity - For daily expenses, I'm a big fan of simplicity.  I keep just two bank accounts On Budget (and am seriously thinking about eliminating the Money Market and going down to one).  We have one credit card that we pay off at the end of every month.  And this Investment Account I'll talk about in a minute.  My husband has his own bank account where he keeps his personal fund.  He finds it easier to manage that than consulting YNAB, so his account gets funded every month from YNAB, but whatever he does with that money is totally up to him and we don't track it.  I keep my personal fund on YNAB without using a separate account since I would rather do that than use a separate debit card -- whatever works best.  You'll notice that I have
• No Tracking Accounts - I think tracking accounts are great for paying down debt (you can see my video on that).  Some people also keep their savings or investment accounts in tracking.  I don't do this.  Whereas my daily spending accounts are really simple, my investing accounts are numerous and complicated.  I keep track of them on a spreadsheet and don't see a reason WHY I would want to have information about what they are doing daily.  Frankly, this information would just create bad decision making on my part, so better to be out of sight, out of mind until i do my quarterly reporting.  What I DO have is a fake
• Investment for Year Account - Okay -- it took me a bit to figure out how to deal with regular investments we were making throughout the year.  I didn't want them to show up as an expense -- after all, I was just moving money from one savings vehicle to another.  I also wanted to have a sense of how much we were investing throughout the year.  So, I created this fake On Budget account and every time I invest money, I set it up as a transfer between our checking account and this fake Investment account.  It doesn't look like an expense on my budget and it keeps a rolling account of how much I'm investing.  Then I zero out this account at the end of the year when I do all of my end of year accounting.  

And that's it.  Let me know what you think.  Comments are always appreciated and thanks for watching!