Not sure if YNAB is right for me...confused?

I've been down the rabbit hole of videos and forums and FAQs and get the basic idea of YNAB. I'm not sure that it is right for me. I'm salaried with a consistent bi-weekly income. I keep 2 months of salary in checking, have no credit card debt, am 6 weeks or so ahead on bills (everything due through the first week of March is paid). I have an emergency fund equivalent to 12 months of my salary and a savings account. Up until now, I've only used Excel for budget tracking. What benefit does YNAB have for me? I don't know if I'm trying to force the system to work the way I prefer or if I am just missing something about the process that is keeping it from clicking for me. Sorry for the length, I'm just highly confused at the moment. Any thoughts?

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  • YNAB won't change a whole lot for you overall but it may offer you greater fidelity in your awareness of your money flow. It can be quite granular if you want it to be. If you already manage a bucket based goal system then there wont be a lot of difference practically.

    Like 2
    • Annieland
    • I was told there would be no math.
    • Annieland
    • 4 mths ago
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    No matter how much money you have (great job, btw!) you're still going to spending something.  YNAB works as a plan for your spending.  It also shows you historical reports so you can make longer term decisions as well.  A big lump sum can be parsed out into things like, Car Replacement, New Roof, and of course, "Income Replacement."  It gives much visibility and security in knowing exactly why you have those dollars and what they're for.

    Many of us, after years of using YNAB have enough to budget at least a month ahead.  That is actually the ideal situation to be in.  Don't get tripped up by the default categories that YNAB gives you.  They may work for very new users, but I find them kind of silly.  Customize them as much as you see fit, personalized to YOUR specific goals and plans.

    Read the forums here to see all the different ways people in different situations tailor YNAB to their situation.  I personally know people with incomes over a MILLION dollars a year who use YNAB diligently.  Yes, their categories are adequately funded and overspends are covered easily, but they still need to plan because anyone can accidentally overspend, or not meet a savings goal no matter how much money they have coming in.

    If you give some examples of what is confusing you in the method or software let us know, plenty of forum members would be happy to help!

    Like 3
      • RIP_MSMoney
      • Software Developer at Microsoft (Previously FinTech)
      • rip_ms_money
      • 4 mths ago
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      Annieland I told you my income confidentially...........

      j/k

      Like 7
      • Annieland
      • I was told there would be no math.
      • Annieland
      • 4 mths ago
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      RIP_MSMoney Bahah you and and Superbone crack me up.  But seriously!  And who do you think got them on YNAB4?? Moi!  And who helped them finally transition last year? This gal!  I have another friend who keeps complimenting my budgeting acumen and I keep telling her, just let me know when you're ready.... Husband's a doctor and house is insane, so one would ASSUME they're fine but she's always exasperated looking for a deal and complaining about the cost of something.

      My million-income bestie was just coming through debt counseling and a short sale all the years back when I got them set up with YNAB4.  You never know people's situation.  But I know it's awesome now.  Because hey, EVERYONE needs a budget, right?? :D

      Like 8
  • Congrats on being so stable and secure already! You're clearly doing something right!

    I think the benefit that YNAB can give you is as  Annieland mentioned - more granular clarity.
    The historical reports on spending and seeing exactly where your money goes is helpful to me. You can find places where there are still money leaks, or realize that you don't want to be spending THAT much on groceries, or eating out, etc. It's a nice way to "organize" larger sums of money. So you can have it all sitting in 1 account, but you'll know that X amount goes towards a new car, X amount towards the new roof in a few years, etc, etc, etc. The ability to set goals in each of those categories is nice, too, so you can remember what you are working towards.
    If you enjoy data and keeping track of things, I think it's a very useful system. Just more detail and control. If you don't enjoy data systems, then it may not have much to offer you.

    Like 1
    • nolesrule
    • Been waiting 5 years for the Stealing From the Future fix...
    • nolesrule
    • 4 mths ago
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    Forest Green Wrench said:
    am 6 weeks or so ahead on bills (everything due through the first week of March is paid)

     Why would you give someone money that far in advance?

    The amount of money you keep in any particular account is not a relevant measure of your success. Rather it's the amount of money you have reserved for specific purposes.

    How do you handle non-monthly expenses or non-short term savings goals? How do you know the 12 months of salary is the right amount? How much of that 12 months isn't really an emergency fund? How much of it is for medical expenses? A new car or vehicle maintenance and repairs or insurance? Do you own a home? Do you plan on taking vacations?

    Like 8
  • Annieland said:
    I personally know people with incomes over a MILLION dollars a year who use YNAB diligently.

     Well, look at that. Our own Annieland hobnobs with the rich and famous! 😁

    Like 13
      • Annieland
      • I was told there would be no math.
      • Annieland
      • 4 mths ago
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      Superbone Yeah, it's a real pain when you're a normal person.  You sign one kid up at a private school for advanced academics 10 years ago and suddenly you find yourself in a community you didn't expect.  I never could bid on those tickets to the Grammy Awards at the school auction every year though :(.  

      Like 5
      • Annieland
      • I was told there would be no math.
      • Annieland
      • 4 mths ago
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      Ok this was really funny, but why so many Likes?  You're all making fun of me aren't you. 🤓

      Like 2
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 4 mths ago
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      Annieland Of course not! We are laugh with you.

      Like 2
    • Superbone Heard a good one the other day (would never fly in my class... I'm such a mean teacher: laughing is not allowed. Neither is the "Take the L" dance, and would you be surprised if instruments aren't allowed to fly?),

      Anyways, "I'm not laughing at you, I'm laughing near you!"

      Annieland , we're appreciating you! 🙃

      Like 3
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 4 mths ago
      • Reported - view
      Superbone said:
      Of course not! We are laugh with you.

      *laughing

      I hate that 30 minute editing window! I'm always horrified when I see typos from myself. I guess that's my own issue to deal with. (With which to deal. 😜)

      Like
      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 4 mths ago
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      Superbone 

      We are laugh. In Soviet Russia, laugh is you.

      Like 2
    • Annieland You know the fundraiser nights schools have at pizza or yogurt places, where the school sends home flyers and then gets a percentage of the revenue for the day?

      Our Catholic high school, which we chose for the academics, had one of those at Michael Kors.

      I didn't do much networking, though, I didn't fit in at all in the parents' association.

      Like 1
      • Annieland
      • I was told there would be no math.
      • Annieland
      • 4 mths ago
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      Herah Yes! Thank you!  Funny, you should mention Catholic school... just before checking the forum I was reading our re-enrollment form for next year, and the minuscule tuition hasn’t even increased. I took the kids out of the old (non-secular) school after the COVID debacle and our new Catholic school is SO much more financially reasonable and chill.  BUT, being from NY originally, I know how some of those top Catholic High schools can be!

      I haven’t been able to get involved much at the new school because of COVID,  but at our old school for 11 years, I went right into the Parent organization and started running Pizza Lunch, became Treasurer for 4 years (duh), and baked for the bake sale.  Fancy people intimidated me for too long, and I decided to just be myself and join the crowd, take it or leave it.  Perhaps because I’m in the Midwest most people ended up pretty cool in the end and I have a few lasting friendships.  But I know too many from the east coast who could chew them up and spit them out in an instant :). 

      Sorry this is really incoherent. I didn’t have my coffee yet.

      Like 1
      • Annieland
      • I was told there would be no math.
      • Annieland
      • 4 mths ago
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      Move Light Sound Life Haha mine was always, "We're not laughing AT you, we're laughing ABOUT you!"  Even worse!

      Like 1
  • Forest Green Wrench said:
    What benefit does YNAB have for me? I don't know if I'm trying to force the system to work the way I prefer or if I am just missing something about the process that is keeping it from clicking for me. Sorry for the length, I'm just highly confused at the moment. Any thoughts?

     I'll echo the crew here in saying that increased clarity about your intentions for every dollar, as well as accumulated spending data, are two huge benefits of using YNAB when you're already doing well.

    I found that once I had reached my emergency fund/income replacement savings goal, YNAB helped me to more clearly define what my next financial goals were, and see where I could make changes to reach them! 

    Like 3
  • Forest Green Wrench said:
    I don't know if I'm trying to force the system to work the way I prefer

    That would be an issue and you wouldn't be the first to make that mistake. Based on your post, we are in similar positions financially.  The benefit for you should be optimizing your income. What are your goals? Do you want to invest as much as possible? Whatever they are, YNAB can help you to optimize your finances and allow you to allocate every penny as you prefer.

    Like 5
    • WordTenor
    • Can we agree that goals are dumb and immature? Sure.
    • WordTenor
    • 4 mths ago
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    Forest Green Wrench said:
    I don't know if I'm trying to force the system to work the way I prefer

     In my experience with newer users, this is almost always the problem. Especially for those of us who basically have the money thing under control when we start YNAB. YNAB is a whole way of thinking about money and not just a spreadsheet or tracker or app, even though there's an app to support the way of thinking that looks like a tracker. 

    There are many many YNAB users who begin as  high income, high savers, or both, and many more who reach a highly secure position through using YNAB. Everyone in that category nevertheless benefits from the method and software, and I've very rarely seen someone really get the YNAB method and then decide they are better off without it. Of course, those people would be unlikely to continue to post in a YNAB group, so make of that what you will, but you will find good company in the "I have 12 months worth of money in the bank" group here. And, as @nolesrule   points out, there's already some room for some minor efficiency tweaks for you if you are paying bills six weeks in advance--in YNAB, you set the money aside so you don't have to worry about spending it by accident, but you also keep the money earning interest for you until it is absolutely due.

    Like 9
      • AussieGal
      • Silver_Ink.2
      • 4 mths ago
      • Reported - view

      WordTenor I am not too familiar with these forums, is there an actual group for those who 'have 12 months worth of money' aka well ahead and not living paycheck to paycheck?

      Like
      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 4 mths ago
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      AussieGal No, but many of us are in that position. This new forum format has killed a lot of the back and forth/community building that existed on the old YNAB forum, where people were much more open about things like that. YNAB wanted to have a forum which was more customer-ticket focused, and the cost of that has been the elimination of the kind of community which allows newer users to develop relationships with other users in the same kind of way. I don't even follow the journals here; they are a hot mess. But the consequence of that is that it's hard to develop the kind of trust and relationships that encourage people to share about their financial lives, and that's to the detriment of new users, in my opinion. 

      That being said, the "I have a ton of money so that's why this software won't work for me compared to all you broke jokers" when the user really means "this is a different way of thinking about money and I'm frustrated" is a whole genre of YNAB forum posts. Which is why you'll see people kind of go, "Well, that's not true, many of us are probably worth more than you, but we can't force you to use this method if you don't want to" because after the decade + some people have been around (7 years for me and I still consider myself "new") these posts are the same old story.  

      Like 7
      • ynaber2613
      • ynaber2613
      • 4 mths ago
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      WordTenor I miss the old forums too.

      Like 2
  • Superbone said:
    What are your goals?

     Forest Green Wrench what motivated you to find a budgeting app? What were you using before? What was that method NOT doing for you that you need.  I may be outing myself as an old person but Stephen Covey 7 Habits of Highly Effective People (still a good read in my opinion) states: Begin with the end in mind. 

    Like 2
      • Annieland
      • I was told there would be no math.
      • Annieland
      • 4 mths ago
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      MXMOM Dang, you just reminded me to pick that dusty book off my bookshelf.  I never ended up reading it.  Probably why I'm highly ineffective.  I've been nagging my ineffective son to read the teen one, so I should walk the walk!

      Like 2
  • I went from a state where I watched where my money went to a state where I tell my money where to go. Even if you're financially stable, that's an amazing position to be in.

    Like 7
  • Everyone, 

    Thank you for your responses. I will try to answer the questions that were asked in the various replies within this reply.

    First, and foremost, I apologize if my post came across as "I have a ton of money so that's why this software won't work for me compared to all you broke jokers" as was stated above. That is so far from the truth. Trust me, life has been hard and I've struggled too. Years ago we made changes to our spending behavior and have seen the positive results of those changes. Hopefully, we will never struggle again. I'm just trying to use my 34 days of free YNAB to make sure I will receive benefit from this program.

    I only used Excel spreadsheets previously and think I basically developed a zero-based budget through that process. What my process lacks, however, is the forward thinking of how to achieve future goals. I want something that will help with that. 

    I don't use credit cards. I maintain 2 for travel because of ease of use but never carry a balance.

    12 months emergency fund means 12 months of my monthly income sitting in a savings account as "emergency" funding for anything that may arise from replacing a roof to losing my job. I don't differentiate in that account what the funds are for, maybe I need to change that?

    I maintain a separate savings account where I dump money for everything from vacations to car replacement to house repairs but don't have clarity on how much is available for each project. 

    My future goals are 1. Pay off my mortgage and 2. save for new vehicles. 3. Better allocate my savings account to future goals instead of just dumping money into savings. From what I'm seeing, I think this is where I will see the benefit from YNAB.

    My mortgage is the only non-living expense debt I have. Vehicles are paid for but are pushing 8 and 5 years old respectively so I need to work on replacements. Other than mortgage, I don't believe in financing so cars will require to be paid-in-full. 

    When I stated everything was paid thru March 1, I should have stated that all bills through March 1 have funds available to be paid. I'm only waiting on the date to arrive and the automatic payments to be processed. 

    Anyway, thanks to everyone for all responses. My apologies again if I unintentionally offended anyone. And sorry for such a lengthy reply. 

    Like 2
      • MadDog
      • Navy_Blue_Pegasus.2
      • 4 mths ago
      • 5
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      Forest Green Wrench YNAB will definitely help with what you have laid out here. You define what is important to you, give it names (categories) and then fund based on your available dollars and desired outcome.

      12 month emergency fund - two purposes are demonstrated already. Income Replacement and emergencies (roof). How much is for income replacement? 3 months? 6 months? How much for emergencies? What are emergencies to you? For example is the roof replacement different from or part of home repairs you mention later? 

      Savings account - First off, read all the articles and posts on the difference between account and category. It is key. But, each item you have listed could be a separate category: Vacation, car replacement, house repairs. You get to decide how much you allocate to each. Do you need to contribute more on an ongoing basis? Is there a maximum you want to have? Is there a time frame? You mention saving for new vehicles is a goal. Using a category with a defined amount tells you if you are on track to meet that goal. Right now, you could end up spending money that should have gone to the cars on a vacation. 

      Mortgage paydown is definitely something to do. You can have a category of mortgage and budget for the current payments plus additional ones to speed up the paydown. Again, you control it but it will give you clarity on what is available after you have given every dollar a job. Are there any leftover to pay extra? Do you want to take some from another category that is a lower priority.

      You may wish to look at the wish farm concept to help with future goals as well. 

      Like 5
      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 4 mths ago
      • 3
      • Reported - view

      Forest Green Wrench I put words in your mouth I didn't mean to, sorry! I could've framed it better to be clear I wasn't accusing you of that, just trying to explain to another user why people weren't responding to this post with "Gosh, how can we help you? Tell us what's wrong?" because there are a lot of people who come in with an attitude of "I'm superior to you people who need YNAB; tell me why I should use it anyway" and those kinds of posts get old, real fast. Your post was not there! 

      @Navy Blue Pegasus has outlined a lot of what you want to think about to optimize YNAB for your situation. The key thing for people who come into YNAB with a good bit of savings is usually thinking very hard about exactly what that savings is for, and then secondarily, getting accustomed to using the budget, instead of an account, to determine what is saved for what. 

      We're happy to help you figure it out. 

      Like 3
      • Annieland
      • I was told there would be no math.
      • Annieland
      • 4 mths ago
      • 1
      • Reported - view

      WordTenor I love the assonance of the phrase "broke joker."  I think that's the first time I've used that word since I learned it in 7th grade.

      Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 4 mths ago
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      • Reported - view

      Annieland I'm not even sure I'm familiar with it. Sounds like something Dave Ramsey would say. I myself am a joke broker.

      Like 2
  • Annieland said:
    BUT, being from NY originally, I know how some of those top Catholic High schools can be!

     move to Ontario Canada.  Catholic schools are part of the general education system - JK to grade 12. There are essentially 3 groups - public, Catholic, and French Immersion. You have to have at least one Catholic parent (I think) to go to Catholic schools. Not sure about the French Immersion.  

    Like
      • MadDog
      • Navy_Blue_Pegasus.2
      • 4 mths ago
      • Reported - view

      MXMOM In Alberta they want you to have at least one parent who is RC but it is not mandated. Really, they want you to declare Catholic school board support on your property tax form is the bigger thing. But the funny thing is that it actually doesn't change the funding that they get. The formula for funding is the same for public and separate (RC) school boards. If the amount that the separate school board gets is smaller than their allotment, they get topped up out of the Alberta School Foundation Fund (ASFF). If it is larger, they have to refund it back to the ASFF. So no monetary difference. 

      We have French immersion in both school boards so anyone can go. There are more in the separate school board though overall I think. 

      Final fun fact: For St. Albert and area (just west of Edmonton), the Catholic school board is the public one and the non-denominational one is the separate school board. Flip flop from the rest of the province due to history.

      Like
      • MXMOM
      • MXMOM
      • 4 mths ago
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      Yes same here with the property taxes. 
      weird about that school board thing. 

      Like 1
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