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Sunday, April 26, 2009

You Need A Budget

Based on recommendations from various money blogs, I downloaded the You Need A Budget software for a two week free trial. New personal household budgeting software is incredibly important to getting the money right, and I'm still looking for the perfect system. YNAB. as it's frequently referred to, is a wonderfully smooth little household budgeting tool.

Except, it didn't work for me. And the download was a big mistake on my part. After a couple of weeks of loving You Need A Budget's smooth workings, and getting excited about how the monthly categories move forward every month in a quasi Dave Ramsey esq virtual money envelope system, it all came to naught and I tossed the software in the recycle bin. Why? Three huge drawbacks for me:

  • No way to categorize autodeductions of the paycheck. I do a lot of autodeductions, which is one way I have been building my portfolio into the the very low 6 figures (FINALLY!) I need to track that functionality. The answers on the forum as to how to auto flow a "money in, then money out into categories" in the same transaction was downright incorrect. It advised that you do something that wasn't supported by the software when I tried it. If I had know that before, I never would have tested the software! My mistake, should have asked.
  • You have to download all your account information manually. UGH! I save money in several different ING accounts. Even though I only have $1,000 here and a $1,000 there, these are my little form of Laddered CDs. And I make more that way by taking advantage of higher interest rates (or what used to be higher interest rates). Downloading every single account would take me an hour or two every week.
  • You almost have to go to a class or have a coach to figure out how to do your first month. It's probably a red flag when you notice that a software system is offering consulting by the hour for coaching you on the system!

To be fair, other than these drawbacks, YNAB is really good for your basic household budget. It's simple and smooth in it's operations. The categories work. If you have extra money in one category, it can easily be shifted to another. If you have money left over from one month in a category, it hops to the next month, and you can build a cash buffer category by category. I haven't found another software yet that does this well. (have you? If so, please share!)

Conclusion: For the beginner to personal software, this software is a good way to build up a visual of how important cash buffers are and how each dollar can be put to work (love that concept on the YNAB site). When they upgrade the software so I can auto download and figure out the glitch in the autodeductions, I'll be a little closer to choosing it over Quicken.

If you like the envelopes budgeting concepts, check out these links.

You Need a Budget

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