Newbies- Keep it simple

I have written several versions of this post over the years. But with the new updates I have seen a lot of complaints about how YNAB is too complicated. This is from a post I made on Facebook in response to the comment 

Simplicity was never YNABs greatest asset. 😆 

Evidence: the thousands of posts here, videos on YouTube, and webinars needed aid in the learning curve. “
 

my response 

 I am of the personal opinion that many newbies watch too many videos and read too many forum posts  

At its core, the concepts are very simple. As you become familiar with the features and confident in the basics, then the bells and whistles should be added.

I think too many people want to do everything “perfectly” from day 1 and get frustrated. The thing is that for many they are not only learning software they are learning budgeting and new behaviours. 


For a new person the steps are simple. 
1. Create accounts in YNAB for all your money actual accounts. Don’t worry about investing and major debt accounts. Enter the balances in each account (guess if you are not 100% sure) The result should be a total amount in To be assigned. I make everything a budget account (as opposed to a tracking account) but I initially didn’t. I changed that later because it’s easy to do.
2. Write down on a piece of paper every type of thing you spend money on. Look it over and figure out how to group these into a way that makes sense to you. I happen to group by overall categories like food, house, cars, gifts, personal. But some group by daily vs monthly or other ways. It doesn’t have to be perfect because you can always move them around later. 
Create these groups and categories  in YNAB. 
3. Start allocating budget amounts to each category you still have to spend money on this month.
One of 2 things will happen-you will run out of money before funding all the categories or you will have money left to allocate after funding everything.

If you ran out of money, go back and reduce the categories you can.

If you have money left over, at this point I recommend having a category that you put this for now. I call ours Dalmatian. This is because things will come up you didn’t think of and then you can fund them as they arise.

To be assigned should be zero. 
4. Start entering transactions manually as you make them. Go to the hairdresser. Add the transaction and select the category you set up for haircuts. 

This is it. Any new person ought to be able to do that without a lot of confusion. The main thing that will through people is starting out in overdraft. Been there. That situation has a video or blog or forum post.
 

The other is continuing to use a credit card that has an existing balance that won’t be paid off monthly. Again been there. And again there are videos and blogs and articles for this. The simplest solution to that is to get a new card that is used for daily transactions that gets paid off every month. And deal with the existing debt card(s) separately. 

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  • Agreed, keep it simple in the beginning.

    As someone who was previously totally ridiculously money-blind (like aside from paying the rent, I had no idea how much anything in my life really cost), I took an even simpler, lazier approach, essentially only tracking spending for the first month or two:

    1. Create accounts for your banking. Sync them so they update automatically. (There was no way I could have manually added each transaction in my first couple of months of YNAB. I would have missed TONS of transactions.)

    2. Let all the transactions begin to import, and categorize each transaction as they come through. If you don't have a category for that type of transaction, create it on the spot ("Gym," "Streaming subscriptions", etc.)

    3. Once you get to the end of the month, your budget is going to have a bunch of overspent (yellow) numbers in each category because you have made all these purchases you just categorized. Now you have a general idea of how much you tend to spend in each category. Budget the appropriate "To Be Assigned" dollars to each category until they are green again.

    Once the new month begins, now you have some rough estimates for how much you spent last month. If you have money Ready To Be Assigned, begin budgeting about that much into each category. Start with the most urgent and work your way down in importance.

    Rinse and repeat with the automatic transactions.

    The longer you do this, the more you can anticipate. But for the first three months I would say I was just reacting and observing.

    Like 5
    • The Artist Formerly Known As This is a GREAT strategy!

      Like 3
  •  MXMOM  this is awesome.

    Here's a few more things to note:

    I wrote a blog post about what I wish I had known when I started (which was, uhh, like 8 years ago on the classic version...) here: https://support.youneedabudget.com/t/h49pm4/far-from-the-usuals-guide-to-getting-started

     

    I agree, tracking FIRST and figuring out how to assign dollars second is most helpful in the beginning. When you don't know how much you spend on all the random stuff during the month it's difficult to figure out what to assign to each category. I think many people get caught up in the assigning, instead of actually taking a look at what they are spending to determine if it's worth actually assigning money there to spend in the first place (whoa, hello there $347/month eating at work category....).

     

    The beautiful thing is that it evolves with you, and as you gain experience your budget gets more refined. You'll discover that you need a category for something specific just to keep an eye on how much is going out the door. And then you'll probably find out you're actually on the float even though you pay off your credit card every month. Oops. And after that you'll figure out averages, and that will reduce WAM'ing and you'll find you can keep your categories balanced much better, and then there's a wee bit more room to get a month ahead and actually pay down that debt....

    But it happens slowly with awareness.

    Like 3
    • farfromtheusual 

      I came here from Mint/other tracking formats, and was able to use those numbers as a starting point. I definitely agree tracking first, but that tracking doesn't necessarily have to be in YNAB. There were still some surprises, because averages only give part of the picture and life enjoys throwing curve balls, but it was a starting point.

      Like 2
      • Vibrant
      • No more counting dollars, we'll be counting stars
      • vibrant
      • 5 days ago
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      Fuzzball Meows yep! My pre-YNAB "budgeting" strategy was downloading Excel files of 6 month's worth of bank and credit card transactions and basically adding a "Category" column and sorting that stuff out, doing some math, and being puzzled why, if I had $X left over after all my "bills" were paid every month, I kept overdrafting. I did basically the same thing to figure out my initial category assignments in YNAB.

      Like 1
    • Vibrant That may resemble what my tracking looked like at one point... Although I tried to keep it to less than 6 months at a time...

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      • MXMOM
      • MXMOM
      • 5 days ago
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      farfromtheusual I just read that post and it is very accurate. I think everyone thinks they will be at the “magical” part right away but like training for a sport, you can’t lift 60 pounds on day 1 (at least I can’t) but in 2 years that may seem like nothing. That is where I think there is information overload for new users who want to understand everything BEFORE they start and the Fresh Start is used far too often to “fix” what they think they did wrong. 
      heck I’ve Excel for more years than I like to admit but I don’t use every feature and I am still learning new things. Plus I may be a right click person and you are a drop down menu or shortcut key person. Neither is wrong. And as I mentioned there is the whole “budgeting/money management” learning as well. I used to teach quickbooks online college continuing education. It was hard because the students were learning the online platform, the accounting concepts, and the software at the same time. And QuickBooks support questions were seldom about the software but usually about the accounting. So the question would be “how do I record this in QuickBooks” but it wasn’t keystrokes they needed. They had to understand the actual transaction before they could record it. 
      anyway, sorry for rambling on as usual. I LOVE software and showing people how to use it to help them rather than make it one more chore they have to do. 

      Like 2
  • I agree with all of the points made. When I have talked to people, if they have not done any kind of tracking or budgeting before, I encourage the tracking at first to get an idea of what would be included in your categories and then how to figure out how much needs to be assigned. It simplifies it and I encourage the use of the "Stuff I forgot" as the holder category rather than leaving it in Ready to Assign. Then, they get the idea of moving money (WAM) from one category to another. It is part of a phased approach.

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    • WordTenor
    • Can we agree that goals are dumb and immature? Sure.
    • WordTenor
    • 5 days ago
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    I love this. And also will add it’s funny how much time it takes to tell people this is simple. 
     

    I try very hard on FB and Reddit to really hammer this:

    1. get money
    2. budget/assign money
    3. spend according to the plan, adjusting the plan as needed

    new money?  Begin again at 1.

    Like 7
      • MXMOM
      • MXMOM
      • 5 days ago
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      WordTenor as always the wise one. 

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      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 5 days ago
      • 1
      • Reported - view

      MXMOM thanks, but sadly, I’m quoting from the version 4 support materials 😕

      Like 1
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