I have always wanted to manage my money well. I have often been convicted that with my rudimentary knowledge of finances, it would be especially important for me to learn to budget well. For many years I tried to put together a budget and often found myself searching for software that would make it simple. I tried all kinds of programs and found that none of them quite did it. Then, finally, I found just the thing I was looking for. It is called You Need a Budget (YNAB). And it’s far and away the best budgeting program I’ve ever used.

The software, and the budgeting system that lies behind it, depends on 4 big concepts:

1. Give every dollar a job. Each month you assign your available dollars to spending/savings categories. This process takes 20 minutes and revolutionizes the way you think about your money.
2. Save for a rainy day. You’ll anticipate larger, less-frequent expenses and will be ready for them. Insurance premium due in six months for $600? Save $100 each month and watch the Car Insurance balance grow.
3. Roll with the punches. The key is to keep moving even when you fail (you will). YNAB will make small adjustments when you overspend, ensuring that you fix those mistakes before you go to the next month.
4. Stop living paycheck to paycheck. We want you to work toward living on last month's income. Both the software and methodology will help you do just that.

The big mind-shift at the heart of it all is to stop looking at your bank accounts, adding up the money, and believing that this is what you’ve got to live on. YNAB helps you start to divide that money into categories like “tuition payments,” “future car purchase,” “emergency funds,” “electric bill,” “vacation fund” and so on. This is remarkably freeing and helps you understand your money in a whole new way. Though you may look at your bank account and see a balance of $10,000, YNAB will show you that only $200 of that is actually available for spending on a new television—the rest has all been reserved for other uses.

In my estimation, and based on the way my mind works, YNAB is far more effective at budgeting than Mint or Quicken or any of the other packages. It does just the one thing and does it very well—budget your money.