You Need a Budget (YNAB)

Infobox Software

name = You Need a Budget
developer = Jesse Mecham
genre = Personal finance
license = Proprietary
website = [http://www.youneedabudget.com YNAB]

You Need a Budget (YNAB) is a personal budgeting program available in both a Windows application (YNAB Pro) or in a customizable spreadsheet form (compatible with both Excel or OpenOffice). It was designed to work closely with the YNAB budgeting methodology.

Unlike other software budgeting tools that give you a snapshot view of how your budget did over the last month, YNAB is instead a forward looking proactive plan for money before it is spent. It does so using what is called a "Buffer" which equals one full months worth of expenses. The Buffer therefore is a specific known amount of money already in hand having been saved for that purpose. In doing so it provides a system for planning and executing short term and long term budgeting goals much more effectively than the standard crystal ball approach where you have to estimate what you are going to have for income before you get it.

As the month progresses income is tagged as "Primary" in the software which virtually sets it aside until next month where it becomes the full Buffer on the first day of the next month thus repeating the cycle.

The YNAB Methodology uses four rules of cash flow management:

*Rule # 1: Stop Living Paycheck to Paycheck (This refers to having and using the Buffer.)

*Rule # 2: Give Every Dollar a Job (You assign every dollar a job all the way down to zero.)

*Rule # 3: Prepare for Rain (This rule forces a person to accept the realities of life in the sense that there will always be "Rainy Days" when ample amounts of cash are needed in a hurry for repairs or other emergencies. By allocating money to these types of budget Categories you can stave off panic over what to do when those events occur.)

*Rule # 4: Roll with the Punches (Since even with a forward looking and planning system you can sometimes overspend in a Budget Category, YNAB has a method that spreads that overage across the next month's budget where it can be absorbed more readily. Since (by design) a person has money reserves at hand (The Buffer) the overage can be covered easily.

Both YNAB and YNAB Pro are available via digital download. Pro is compatible with all computers running Windows 98 or later. YNAB is a spreadsheet that works with both Excel and OpenOffice and is for use on both Mac and PC operating systems.

History

YNAB was created by Brigham Young University graduate Jesse Mecham in 2003 as a personal budgeting system for him and his wife as they finished college. With only part-time jobs to support them, money was tight, and strict budgeting was the answer. After their own success and sharing the program with many friends, it seemed that there might be a market for YNAB. In the summer of 2004, YNAB was first offered online. Originally created as an Excel spreadsheet, YNAB took on new life in the form of YNAB Pro, with the collaboration of programmer Taylor Brown. First released in November 2006, YNAB Pro has continued to expand its capabilities.

*Both versions remain available.

See also

Personal budget

Comparison of accounting software

External links

* [http://www.youneedabudget.com YNAB product website]

References

* [http://financialsoft.about.com/od/reviewsfinancesoftware/a/YNAB_review_2.htm Product review by About.com]
* [http://www.mymoneyblog.com/archives/2006/02/you_need_a_budg.html Product review by My Money Blog]
* [http://www.frugalforlife.blogspot.com/2005/06/product-review-ynab-software.html Product review by Frugal for Life]
* [http://www.freemoneyfinance.com/2006/10/ynab_question_o.html Product review FreeMoneyFinance] - Compares YNAB to commonly known financial software such as Quicken and Microsoft Money.
* [http://www.amazon.com/dp/customer-reviews/B000QO76HU Customer product reviews at Amazon.com]