Please explain: $600 savings

"On average, new budgeters save $600 by month two and more than $6,000 the first year!"

What does this actually mean? How does YNAB get this data?

42replies Oldest first
  • Oldest first
  • Newest first
  • Active threads
  • Popular
  • I've always assumed it is self report and probably skews high. They don't have access to your budget so they're not monitoring it or anything. That said, I personally increased my cash net worth by about $10,000 in my first year which was a little less than a third of what I was earning at the time. 

    Reply Like 1
    • Ben
    • Toolkit for YNAB Designer & Developer
    • furiousfalcon
    • 1 yr ago
    • 2
    • Reported - view

    I have generally assumed that info is mostly from surveys and feedback and other methods of reporting -- not necessarily because that data is stored online (they had similar messages about YNAB4, which wasn't web based). Their privacy policy, which discusses what information they collect, and how they use it, is here: https://www.youneedabudget.com/privacy-policy/ .

    Personally, just looking at my nYNAB history, I'm up about 150% (way beyond the "$6k in the first year" they claim) in the 2+ years I've used it. Obviously, your milage may vary, and it partly depends on your life situation, how focused you are on your financial goals, and of course a bit of luck.

    Reply Like 2
  • So basically it's marketing BS? 

    Edit: That sounds ruder than I mean it.

    My point is:
    - I can't see any actual evidence for this claim. I have to take it at face value and I'm naturally skeptical.

    - I assume it's a mean and not a median and that will skew the number high.

    - Do they count all the zeros ("didn't save any money") when making the calculation? 

     

    I've had a two month trial (now coming to an end) and have not saved any money so I'm surprised at this claim.  I'm certainly more aware of where my money goes but that's not the same as saving money. 

    Reply Like 1
      • Ben
      • Toolkit for YNAB Designer & Developer
      • furiousfalcon
      • 1 yr ago
      • 11
      • Reported - view

      Navy Blue Cyborg I guess I'm not quite sure what "evidence" you want? Budget breakdowns? Lists of numbers? Fancy graphs? 

      You can get a general feel from posts here, on https://forum.youneedabudget.com/ , on the Reddit YNAB subreddit: https://www.reddit.com/r/ynab/ . You can see some of the success stories on the YNAB Blog: https://www.youneedabudget.com/category/budgeting-success-stories/ , or see general comments about YNAB on Twitter or Facebook. In general, while YNAB doesn't work for absolutely everyone, you should see a good number of people who have found YNAB useful and helpful in their financial lives.

      Everyone's financial situation is a bit different. Some people are blessed with a good financial situation, just bad habits. It's easier for some to save than others. Some are more focused on specific financial goals and willing to go to extremes to get out of debt/save/whatever than others.

      Ultimately, YNAB isn't magically going to save you money. It can help provide awareness and encouragement, and help provide a good structure for making smart financial decisions. It can help give you a different viewpoint on budgeting and finances. But you have to do the work -- saving more, spending less, earning more, or some combination of all the above if you want to get ahead (and that's true of any financial app/system).

      Is it marketing wording? Sure. I wouldn't necessarily call it "marketing BS" though -- there seem to be enough people, myself included, who have found it to be a system that works well for them, and have found some financial success with it. But obviously results may vary, and there are no guarantees. Simply using YNAB won't make $6k magically appear. 

      Reply Like 11
      • Saturna
      • reap what you sow
      • saturna
      • 6 mths ago
      • Reported - view

      Navy Blue Cyborg I haven't saved either in these last 3 months, but I also avoided creating more debt, which was spiraling out of control before YNAB, so I guess they count that as well.

      Reply Like
  • We were down $10,000 after one year in our budget. But we bought a house in month 5 and were down about 50% at that point, and climbed back up pretty quickly. Our budget after 4 years is sitting about 50% higher than the day we started. But that's just our budget, as we've jacked up our 401k deferrals and invest money not needed for the budget.

    Every budget is different. It's hard to tell what criteria they used to come up with that number, because there are so many variables.

    Reply Like 3
  • Ben  I can think of lots of things that could be said (as a blog post?) that could back up the claim. For example, I would love to see savings by income. 

    Something like:
    Our users in these income ranges have reported saving this amount after a year of use.
    <20k  -- $250

    20-50k -- $1,000

    50-100k -- $5,000

    100k+ -- $10,000

    That would give me a more realistic sense of what  might happen for me. 

    It's an enormous claim! $6,000 is a huge amount of money to me. Of course things are different for everyone but it is used frequently (in these forums for example) to encourage people to subscribe. I think it's reasonable to have some further information on where that number comes from. Otherwise, it feels manipulative to me. 

    Reply Like
      • jenmas
      • jenmas
      • 1 yr ago
      • 1
      • Reported - view

      Navy Blue Cyborg how would that even be calculated though? I don't have any category called savings. I have categories for things that I am saving up to buy, two of which I'll be buying tomorrow, others of which I don't plan to buy for 10+ years. I can tell you that since I started YNAB in the summer of 2014, my net worth has gone up by $X. But a lot of that has been some good performance in my IRAs, 401(k), and investment accounts. My cash on hand has gone down steeply since I've started, but I've also paid off my student loan and one of the 2 mortgages on my condo, bought a new car for cash, replaced my HVAC, and bought a rental property and that's where the cash went. I could tell you that my age of money started at 21 days and is currently at 265 days, but since my highest AOM was 400 days when I was on month 6 of being unemployed after a lay off, I'm skeptical on the whole AOM thing.

      Reply Like 1
    • jenmas That's exactly my question. Where do they get those numbers from? Either its based on data or its not. If it's based on data where does the data come from? Who is counted? Who isn't counted? What are the caveats? If the data exists then it can be explained, analysed, interpreted. 

      If it's not based on data then it's made up which is icky and I don't believe/want to believe that is the case.  

      But I also don't think it is unreasonable to ask for a bit more information on the claim. If a business uses a bold claim I believe that should be able to substantiate that claim. Don't you?  

      Reply Like 3
      • jenmas
      • jenmas
      • 1 yr ago
      • 3
      • Reported - view

      Navy Blue Cyborg - I guess I really just don't care? OJ commercials claim that it's part of well balanced diet, but almost any nutritionist will tell you to eat your fruit and not drink it because juice has almost as much sugar as soda and it's equally bad for your teeth (though nothing is worse on tooth enamel than milk). Marketing does what it does.

      Reply Like 3
      • Aric
      • Aric
      • 7 mths ago
      • Reported - view

      Navy Blue Cyborg I've always assumed they're using the "Net worth increase" since the beginning of using YNAB. That's independent of what categories you're using, it's just a high level inflow-outflow of the entire account, something they'd easily be able to calculate.

      Edit: just realising hoooow long ago you posted. Sorry for the random notification lol

      Reply Like
  • I am not sure how much I have saved as a result of using YNAB but I know my checking and savings accounts are much higher than before I started.  I have been using it for 4 1/2 years.

    Reply Like 2
  • As you've quoted, Navy Blue Cyborg  , they don't say that new YNAB users save those amounts.  They say that "new budgeters" save those amounts on average.  (https://www.youneedabudget.com/pricing/ ). 

    I've always imagined it to be a general statistic from some sort of accounting research.   But maybe I'm wrong.

    Since it's "on average" any zero savings should have been factored in, although who knows what the sample size and selection process was.

    I've definitely been saving money since using YNAB, and also have stopped using up existing savings due to disorganisation and poor prioritising.  I think the YNAB functionality and methodology is better than other budgeting approaches.  I'm a big fan.

    Having said that, I think they should really give a reference or citation for a claim like that.    Janelle , could you or someone else in the support team give us more information?

    Reply Like 4
    • Pikayo I appreciate your precision!

      Reply Like
  • I doubt I'll hit $6K savings this first year, but I'm already ready to pay next month's expenses on this month's income and that's a big change for me. I started nNYAB in December.

    Reply Like 4
  • I think the change depends on your income, expenses, and how well you're  budgeting. 

    I don't have $6K in my checking (i could if I didn't have a car loan to pay off), but because I've made more money this year, and I'm budgeting wisely, I've managed to add $1000 more to my emergency fund, and I have not dipped into that fund for at least six months  or more. And that's because I'm budgeting for my true expenses.

    So I wouldn't get sidetracked by the marketing claims. If you keep working on your budget, and if possible add or increase your income, you'll benefit from the ynab system. 

    Reply Like 2
  • I've largely ignored the "$6,000" number that YNAB throws around, in part because it's meaningless to me and in part because I don't believe in the accuracy of it. I have definitely saved more than $6000 in the year since starting YNAB.... but I also would have saved more than $6000 without YNAB. To me, YNAB is just a tool that I like the interface of, not a tool that I *need* to use to budget or to save money. 

    As for the accuracy, even if it is based off user data, people like me would be skewing the numbers heavily since I already had a high savings rate before switching to YNAB. The only manageable way I can see of actually attributing growth to YNAB usage is to ask new users what their net worth was a year before joining YNAB, and then compare that to net worth growth every year afterwards. 

    Reply Like 1
  • All I know is my own experience. When I came to YNAB I had no budget or any idea what I was doing.   Today I have around  200% of what I had when I started, around 3 years later. Progress was slow initially, while learning about the bad choices I made in the past and learning to make better choices going forward. Today I finally feel I’m in control of my money, instead of being controlled by it.   I have saved much more than the stated $6K.   My recommendation would be to give it a chance and see what it does for you, then in a year let us know what happened. 

    Reply Like 3
  • I'm glad some people have had good experiences and saved money with YNAB.  I'm bemused that some of you folks don't care about truth in advertising but that's your business. And I guess I should stop waiting for this question to be answered by someone in the YNAB team? 

    Reply Like
  • Navy Blue Cyborg said:
    truth in advertising

     What is this exactly? I don't understand. I know each of the words, but in that context it makes no sense. /s

    Sorry to be so flip, but all advertising is hype. Not condoning it; just interpreting it. Lots of grains of salt being consumed, to the detriment of my blood pressure.

    Reply Like
  • JoeDid said:
     What is this exactly?

    😁

    Maybe it's a cultural thing? I'm not American. In a number of countries that I've lived there are consumer agencies that help to combat misleading, deceptive  and fraudulent claims from companies. Truth in advertising is a goal and if companies don't live up to that goal they are fined or otherwise punished.

    I'm not saying that this IS a misleading, deceptive or fraudulent claim but it feels misleading and possibly deceptive to me. I respect businesses that are truthful and I wanted to give YNAB the chance to allay my fears, hence the question. I didn't think it was going to be so controversial! 
     

    Reply Like
      • jenmas
      • jenmas
      • 1 yr ago
      • 1
      • Reported - view

      Navy Blue Cyborg If you want an answer from YNAB, the Tips and Tricks sub-forum is probably not the right channel because it is in the "Community" area of the forum. Try emailing them through the app. Or ask the question over in the Q&A area (perhaps Method & Budgeting or Getting Started might be more appropriate).

      Reply Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • 3
      • Reported - view

      Navy Blue Cyborg 

      Navy Blue Cyborg said:
      I'm not saying that this IS a misleading, deceptive or fraudulent claim but it feels misleading and possibly deceptive to me. I respect businesses that are truthful and I wanted to give YNAB the chance to allay my fears, hence the question.

       The truth is that YNAB doesn't save anyone any money. People have to do it for themselves. And that's why the claims don't actually matter. It's just a tool.

      Reply Like 3
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 1 yr ago
      • 4
      • Reported - view
      Navy Blue Cyborg said:
      I'm bemused that some of you folks don't care about truth in advertising but that's your business.

       It’s not even an untruth if we all saved an average of $6,000.  And average doesn’t mean everybody saved $6000, or even that most did. It’s not the mode. If you average the figures in this thread,   $6000 actually looks like a conservative estimate. I actually find it hard to believe that the average isn’t more than $6000 in the first year.  I imagine some people use YNAB who have extremely high incomes of which a bunch is just been spent frivolously. (The last survey they did that they made public, revealed that most of their user base earned more than $100,000 per year per household.  At that salary, finding $500 a month of leakage is easy for many.)  

       If you want to save money, you’ll save money. Probably a lot. If you want to feel outraged that they attached a figure to it, you can do that, too.  IMO,  better to just start trying to save money. 

      Reply Like 4
    • nolesrule WordTenor We clearly have very different outlooks. What businesses say matters to me. How they represent their brands matters to me. I honestly can't see why it's such a big deal to ask where the number comes from. 

      WordTenor said:
      The last survey they did that they made public, revealed that most of their user base earned more than $100,000 per year per household.

      That is the first time anyone has referenced such a thing and that's the kind of information that's useful! That is not my situation. With information like that I can be reasonable about my expectations and make an informed decision. The subscription fee is not insignificant for me.

      Reply Like 2
    • Navy Blue Cyborg I'm not sure if you saw the link below, but WordTenor provided a link to the survey results so you can see where some of those figures come from. As mentioned, it is an average, but everyone's success story is different. My first year using YNAB, I made under $35k but I was able to save $20k and pay off some outstanding debt (I took a bare minimum approach to things). We know this isn't everyone's experience, but it happens more often than you may think! :)

      Reply Like
  • Or tag the support personnel, like Janelle  or Faness .

    Reply Like 1
    • TryingToGetAhead Janelle was tagged five days ago. 

      Reply Like
      • MsTJ
      • Gray_Nomad_f6eeb59e1a1c
      • 1 yr ago
      • 1
      • Reported - view

      Navy Blue Cyborg Sorry, I missed that.

      Reply Like 1
    • TryingToGetAhead Thank you for the tag here! I was out this last week and I'm just starting to catch up on things! :)

      Reply Like
  • Though I'm still interested in the answer and I'm sure there are others out there also interested we don't need to continue this conversation since I've decided not to subscribe.

    My main reason is the ongoing subscription cost. I could justify CAN$110 as a once off fee but it does not feel worth it to me to have to pay that every year.  I know y'all here think it is worth it!  Maybe I'll report back in a year to see if choosing not to use YNAB  was a wise financial decision. Good luck to you all in your financial journeys. 

    Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • 2
      • Reported - view

      Navy Blue Cyborg I have no problem with you asking (I just don't think the answer is meaningful), nor balking at the subscription price. I still use YNAB4 because I can't justify the subscription, even though I'm grandfathered in at a much lower subscription price.

      Reply Like 2
      • JoeDid
      • Remember: It is To Laugh
      • Purple_rain
      • 1 yr ago
      • Reported - view

      nolesrule Check this about being grandfathered in at a 'much lower' price. When the price increase was announced I wasn't ready to pounce and I delayed until the window had closed. When I did subscribe I wasn't offered that deep discounted rate, but I did get 10% off as a YNAB4 licensee.

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • Reported - view

      JoeDid When I check the subscribe page for this account (same email I used to purchase YNAB4), it shows the price as $50. That's why I keep this account open permanently, and use a different account for my monthly free trials to test things.

      Reply Like
      • JoeDid
      • Remember: It is To Laugh
      • Purple_rain
      • 1 yr ago
      • Reported - view

      nolesrule Wish I'd thought of that.

      Reply Like
  • Navy Blue Cyborg and everyone here: I apologize for missing the tag! To answer your question, the data you're asking about came from a comprehensive survey we performed a while back. 

    Reply Like 1
    • WordTenor Thank you. Interesting. 

      Reply Like
  • FWIW, I don't think new YNABers necessarily should sign up based on $600/$6k claims. That's not why I signed up for YNAB in the first place. 

    I signed up for YNAB (I haven't been using YNAB for more than a week yet), but have already seen benefits of using YNAB over the long term (I'm a financial geek so I can quickly see if something is or is not for me). I can *totally* see how I'll increase my personal cash net worth over time. 

    By just using YNAB to make more intelligent budgeting decisions (and to control my spending because I'd know if I'm overspending on a category), I'm probably going to increase my cash net worth, unintentionally. 

    Therefore, I wouldn't even consider $600/$6k claim a "bold" one.. 

    Reply Like 4
    • Khaki Storm
    • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
    • Khaki_Storm.1
    • 7 mths ago
    • 1
    • Reported - view

    Don't know. I saw an article before Christmas that people who use any method for tracking spending vs those that don't track just spend less. 

    Reply Like 1
  • I don't think that's too far off. I have been on a 3 month trial ending in a few days, just from actually making decisions on how much I wanted to spend on things like eating out instead of just letting it happen has saved me about $600 over the last 3 months. (I guess I'm slightly below average? Lol)

    Reply Like 2
  • Disclaimer: I started out with a balance of $10,000 and a net worth of $1,700. My single household gross yearly income is now at around $50,000.

    After two months I had saved another $1,700 while after one year I had saved $17,000. Don't recall if I participated in the survey or not.

    Would I have saved as much without using YNAB? I don't know.

    Reply Like 1
Like1 Follow
  • 1 Likes
  • 6 mths agoLast active
  • 42Replies
  • 2788Views
  • 19 Following