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Do You Need a Budget?

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You Need a Budget

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.

YNAB iPhoneHere is how I use it. Once a month I take a few minutes to set my budget for the month to come, trying to anticipate the best way to allocate the money available to me. I then take about 15 or 20 minutes every Saturday to update YNAB with the latest data from my bank. I categorize all income and expenditures and sync the results to my iPhone (totally optional, but I like to have my numbers with me when I’m out and about). That takes just a few minutes and it sets me up for another week. I even use it with my kids. Once a month I enter their transactions from the month before and help them divide out their money into simple categories–giving, spending, saving.

YNAB’s learning curve may seem a little bit steep, but once you get your mind around the concepts, you will find it very easy to use and maintain. Depending on your knowledge of financial concepts, you may need to take a few hours to read the manual, to watch the training videos, or even to take one of their free online seminars. The effort will prove well worth it.

YNAB works on any computer platform–Mac, Windows, Linux. Depending on the setup of your home computers, can probably even use it on multiple computers.

So what can I say? I highly recommend the software on two levels–practically, it will help you manage your money well and spiritually it will help you ensure that you are taking control of your money, freeing you up to use it in a way that honors the Lord.

Check it out at

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