You Need a Budget App Review: Manage Your Money on a Zero-Based Budget

What Is YNAB?

You Need a Budget (YNAB) is a budgeting app that uses a zero-based budgeting method. In other words, you assign every dollar you earn to a specific spending category or savings goal. Rather than just tracking where your money went after you spend it, YNAB encourages you to plan ahead and decide what each dollar should do before you spend it.

The app syncs with your bank and credit card accounts to automatically import transactions. You can create spending categories, set savings goals and track your progress over time. YNAB also offers educational resources to help you learn its budgeting philosophy and build better money management habits.

The company offers both web-based and mobile app versions, allowing you to manage your budget from any device.

Learn more: Types of Budget Plans to Know About

How Does YNAB Work?

YNAB takes a different approach to budgeting than many other apps. Here's how it works and what makes it unique.

The Four Rules

YNAB is built on four rules to help you succeed in your budgeting and provides a variety of features to support those rules:

1. Give every dollar a job. YNAB makes it easy to categorize every dollar you earn, whether for spending or saving, so you know where your money is going at any given time.
2. Embrace your true expenses. YNAB helps you anticipate expenses that aren't recurring, such as holiday and birthday gifts, car insurance premiums and vacations—and budget for these expenses on a monthly basis using a target.
3. Roll with the punches. If you overspend in one category, don't fret. You can easily move money from another category to cover the shortfall.
4. Age your money. YNAB will track the age of your money and show you the average amount of time it takes you to spend money you've earned. The goal is to spend money that you earned at least 30 days ago, giving you a buffer in the current month.

Helpful Tools

Here are some features YNAB provides to help you manage your money:

• Direct import: Connect your financial accounts to automatically import transactions without logging in to each account separately. YNAB can automatically categorize recurring transactions, though you can also update your budget manually if you prefer.
• Customizable categories: Create expense categories that match your spending habits. You can make your budget as detailed or simplified as your needs require.
• Split transactions: Divide purchases that span multiple categories. For example, if you buy groceries, clothing and toiletries at Costco, you can split the transaction to accurately track spending in each category.
• Shared budget: Grant access to a partner or family member so you can both view spending and make budget adjustments in real time. You can share a subscription with up to five people.

Reports

YNAB provides five reporting tools to help you analyze your financial progress:

• Net worth: Shows a snapshot of your assets and debts month by month, giving you a clear picture of your overall financial health and how it's changed over time.
• Spending breakdown: Displays how much you spend across different categories, allowing you to identify exactly where your money goes.
• Spending trends: Tracks your total spending over time to help you spot patterns and changes in your spending habits.
• Income versus expense: Provides both an overview and a detailed summary of money coming in and going out of your budget accounts.
• Age of money: Visualizes how long money sits in your budget before you spend it, helping you measure your financial buffer and progress toward breaking the paycheck-to-paycheck cycle.

Learn more: Signs You're Living Beyond Your Means

Budgeting Resources

Beyond the app itself, YNAB offers free educational content to help you master its budgeting method. Live workshops cover topics like setting up your first budget, paying off debt, building an emergency fund and breaking the paycheck-to-paycheck cycle.

The company also provides on-demand videos, articles and tutorials that explain its four budgeting rules and how to apply them to your financial situation. These resources are particularly helpful for beginners who find YNAB's zero-based approach unfamiliar or overwhelming at first.

Is YNAB Free?

Unlike many budgeting apps, YNAB doesn't offer a free version. Also, as one of the more expensive options available, the investment only makes sense if you're ready to actively manage your budget and use its comprehensive features.

YNAB offers options for a monthly or an annual subscription. If you choose to pay annually, it'll cost you $109 per year, which comes out to about $9.08 per month. However, if you opt to be billed monthly, you'll pay a premium at $14.99 per month.

The good news is that the app offers a 34-day free trial to give you some time to try it out and determine if it's worth the cost for you. Some other paid budgeting apps give you just one or two weeks free, which may not be enough time to properly evaluate features and resources.

Availability and Ratings

The YNAB app is available on your desktop browser, as well as for iOS and Android devices, including Apple Watch.

For mobile, the YNAB app has 4.8 stars across 58,000 reviews in the Apple App Store and 4.5 stars across roughly 23,500 reviews in the Google Play Store.

Pros and Cons of YNAB

Understanding what YNAB does well and where it falls short can help you decide if it's right for you. Here's what you should know before signing up.

Is YNAB Safe?

YNAB uses bank-grade encryption to protect all data between your device and its servers. Your password gets multiple layers of security protection, so even if hackers accessed the database, they couldn't read your actual password.

Additionally, the company doesn't access your budget information unless you ask for help or it's required by law. It does analyze anonymous data for internal purposes, but this isn't connected to your personal information.

For direct importing, YNAB partners with financial data companies that handle the security. YNAB never sees or stores your bank passwords. Some banks even support open authorization (OAuth), which lets you authenticate directly with your financial institution.

If you delete your account, YNAB completely wipes your data instead of just deactivating it.

Is YNAB Worth It?

YNAB takes a hands-on approach to budgeting, which makes it a better fit for some people than others.

YNAB might be right for you if:

• You want detailed control over where every dollar goes and are willing to actively manage your budget.
• You're trying to break the paycheck-to-paycheck cycle and build a financial buffer.
• You're comfortable with a learning curve and want access to educational resources to improve your money habits.
• You need robust goal tracking and planning features to save for specific purchases or pay down debt.

YNAB might not be right for you if:

• You prefer a hands-off budgeting app that automatically categorizes transactions without much input from you.
• You're new to budgeting and want a simpler tool to start with before committing to a detailed system.
• You're strictly looking for a free budgeting option.
• You only need basic expense tracking rather than a comprehensive budgeting method.

If you're still not sure, the 34-day free trial gives you plenty of time to test YNAB's features and decide whether the subscription cost is worth it for your situation. Also, don't be afraid to check out and compare other top budgeting apps to see which one best aligns with your money philosophy and goals.

Learn more: How Budgeting Can Help You Improve Your Credit Score

How to Use YNAB

Getting started with YNAB requires some upfront setup, but taking time to build your budget properly will make managing your money easier over time. Here are the key steps to get up and running:

1. Link your financial accounts. Link your bank accounts and credit cards to enable automatic transaction importing. You can also choose to enter transactions manually if you prefer more control.
2. Personalize your spending categories. Create categories that reflect your actual expenses, such as groceries, rent, utilities and entertainment. You can add, remove or rename categories to match your lifestyle.
3. Add non-monthly expenses. Don't forget about irregular costs like car insurance, annual subscriptions and holiday gifts. YNAB can help you set aside money each month for these expenses so you're not caught off guard.
4. Assign every dollar a job. Give each dollar in your account a specific purpose by allocating it to a spending category or savings goal. This is the core of zero-based budgeting.
5. Track and adjust. As you spend throughout the month, YNAB updates your category balances. If you overspend in one area, move money from another category to cover it.
6. Review your progress. Use YNAB's reports to see spending patterns and identify areas where you can improve.

The Bottom Line

Budgeting is a crucial part of a strong financial plan. Whether you use YNAB or another budgeting method, combining regular budget reviews with credit monitoring can help you build a complete picture of your financial health.