If you are intrigued by zero-based budgeting and want to get serious about your financial goals, you should consider “You Need A Budget” — commonly known as YNAB. 

For around $15 per month this budgeting app brings the classic cash envelope system into the digital age. YNAB’s fully customizable spending categories allow you to assign every dollar of income only after it hits your account. 

This approach helps prevent you from going over your planned spending. Below are some notable pros and cons to help you determine if YNAB is the right fit for your budgeting needs!

Pros:

Sophisticated functions, thoughtful interface, and copious customizations

YNAB is clearly a well-thought-out budgeting platform. Spending categories can be customized in countless ways to encompass every way that you spend. You can sort transactions, view overfunded or underfunded categories, see spending analytics through visual graphs, and more! 

YNAB even tracks your overall net worth and allows you to see your past history of income versus your expenses sorted by month, quarter, or year. YNAB allows you to export the data from your spending categories to an Excel file if you desire even more custom analytics. As a bonus, YNAB also lets you import a file from Excel or another budgeting software.

Avoid Expensive Surprises with “Sinking Funds”

YNAB encourages you to set up “sinking funds” to save for future expenses or liabilities. If you anticipate needing a new car or having an expensive home repair, you can pay into your monthly fund so that when the expense actually arises, you are prepared. 

With “sinking funds” you are tucking away money little by little to meet your dollar goal by the deadline you set. 

YNAB calculates the monthly amount needed for you to include in your budget based on your choice of deadline and savings goal. If you do not contribute the planned amount in a month, YNAB will adjust the monthly amount needed so that you still meet your goal on time.

Visually Attractive

YNAB’s customization goes beyond mere content. Their interface allows you to add an emoji for each “spending category” which not only adds a sprinkle of fun, but also makes each category quickly recognizable at glance. The interface is smooth, modern, and highly organized.

Add “Notes” to Transactions to Keep Things Organized

It can be easy for purchases from big box stores like Walmart, Amazon, or even grocery stores to get muddled when it comes to categorizing individual transactions. “Was that trip all groceries? Or gift? What was it I ordered from Amazon?” you might find yourself asking. 

YNAB allows you to add a note to any transaction to remind yourself what that purchase was for in order to help you categorize it accurately. This note appears right on the main screen alongside the transaction as a convenient and easy reminder. 

While most other budgeting apps have a similar feature, the note is often only visible once you navigate away from the homepage to view the transaction individually. YNAB keeps your notes right where you need them!

Cons:

Steep Learning Curve

YNAB’s myriad of customizations do come at a cost. Committed budgeters will not be deterred by the steep learning curve but those hoping for an approachable introduction to budgeting should look elsewhere. YNAB does have a robust YouTube channel with training videos, but the fact that they need to offer training videos speaks for itself. 

Users may need to adapt their own spending habits to fit with the system that YNAB presents. This process can be tedious and takes time, but for those committed to learning and implementing a precise zero-based budgeting system there isn’t a shortcut.

Lots of Upkeep

Even after your initial budget and spending categories have been created, you still have to check in with YNAB regularly throughout the month to allocate your funds. Since every dollar must be assigned once it is earned and cannot be assigned as “anticipated income” you must be very hands-on with YNAB throughout the month. This can be built into your financial lifestyle over time, but YNAB is definitely not a “set and forget” monthly budget.

Minor Glitchy Auto-sync

For the majority of accounts and credit cards, YNAB can sync seamlessly. However, smaller regional banks tend to be slow or inaccurate with their auto-sync leading to inaccurate balances listed in YNAB. With YNAB’s demand for high precision, this kind of glitch makes the user experience highly frustrating. 

Additionally, less popular credit cards (like the PayPal Credit Card) are not available for auto-sync and must have transactions added manually. Even the popular card series American Express has a tendency to require frequent maintenance.  For some users, these issues might not even come up; but for others, this could be a major deal breaker.

A Complicated Financial Picture Gets Too Messy

Although YNAB does allow you to add many accounts of various types, if you have a more complex financial situation involving many checking and savings accounts and multiple credit cards, the cut-and-dry envelope system becomes unduly burdensome. 

Users might find themselves spending most of their time making sure YNAB is “all synched up” rather than actually reaping the fruits of the budgeting software. 

In addition, transferring funds between two of your own accounts has to be double-checked and sometimes manually overridden to ensure accurate balances are reflected in YNAB. Paired with the already involved upkeep and rigid budgeting guardrails, the additional efforts to keep countless accounts properly synched and nothing double counted can be off-puttingly tedious.

The Bottom Line

YNAB is a fantastic tool for someone looking to grab their finances by the horns by building and maintaining a serious budget. Long-term goals are a must; otherwise, users may become deterred by the steep learning curve. Using YNAB well requires you to reshape some of your own spending habits to fit with their system and adopt a routine of checking in with YNAB to allocate your funds and adjust your spending as necessary. 

That being said, their robust ability to customize gives you advanced control over your finances by accounting for the timing of expenses and income. YNAB brings all the benefits of the “envelope system” into the 21st century with a sophisticated interface that tracks exactly where every dollar of your budget is going only after that dollar hits your account. The commitment to YNAB is well worth the effort to learn and upkeep if none of the above cons are deal breakers for your situation.