Managing your finances often isn’t the easiest thing in the world to do. It can be difficult getting a sense for just how you’re spending each penny, or figuring out where your money constantly disappears to.
You may store up old receipts, swear not to go to a restaurant this month, or otherwise promise yourself to live a more financially aware and cautious lifestyle. Maybe you’ve already overshot your would-be budget, landed in dire straits, and turned to a quick loan service such as quickle.com.au.
Luckily, we live in the age of online services and digital apps, and there’s one budgeting app that can change your financial life for the better. It’s called YNAB, or to give it it’s full name, “You Need a Budget”. Here are some reasons you should give it a chance.
It’s reactive to unforeseen and changing circumstances
One of YNAB’s key features is that it’s reactive, and allows for easy adjustments to the basic plan in order to help you stay on the ball, despite those little hiccups, or the general purpose uncertainty of life.
This isn’t just a feature of the tool; it’s actually a principle that the YNAB creators consider to be a cornerstone of successful budgeting and money management, and which they refer to as “rolling with the punches”.
In YNAB, money is assigned to different budget categories, such as “spending money”, “groceries”, or “rent”. With the dynamic, “rolling with the punches” system you can withdraw a bit of money from one category once you’ve assigned it there, and then reassign it as needed, in order to cover an overspend in another category.
For example — you can skim a bit of money from your “spending money” category and assign it to “groceries” as you need, and the budget will still operate properly as long as your overall financial balance is maintained.
It deals only with what you actually have
YNAB works according to a “zero-based budgeting” model, which deals only with the money you actually have in your account, and not with your projected earnings.
The way this works in practice, is that you’ll wait until you receive a payment from work — until the money is in your bank account, in fact — and will then update YNAB with this new balance. YNAB will then count that amount of “available funds” and will want you to assign every available cent to the various categories of your budget.
This keeps your planning — and hopefully, your spending — realistic, and doesn’t let you get carried away with future projections.
It’s easily updated and managed
Unless you’ve neglected to update YNAB for a period of months, the process of getting up to date should be pain-free, and should only take a couple of minutes.
The latest version of YNAB operates as a web-based service, with dedicated phone and tablet apps, and support for importing bank statements directly into the program.
Updates on one YNAB platform will automatically sync with the cloud.
Whether you update on the go after each purchase, or at the end of each day, staying up to date is easy.