Zero Based Budget Part 3 The New Beginning

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Welcome back to our conversation regarding Zero Based Budgeting.  This will conclude our series and we’ll cover some of the tools you can leverage to help you with your budgeting life. I personally use You Need a Budget and it has helped immeasurably to keep our family on the same page with our finances and so I recommend it highly.  In fact it’s the only software I fully recommend although there are several alternatives out there.  The reason I like it so much is for a couple of reasons.  It’s centered around the budget rather than merely tracking your expenses.  It will do that as well but the budget is the thing.  The other reason I like it so much is that it’s standalone.  I don’t want my finances tracked online any more than they need to be.  I like to keep them local.  That’s just my preference yours may be different.

Other Budgeting Software

There are several other products out there that will help you with your budget as well.  They are available online only, Mvelopes is one that a lot of people like and there is Inzolo a new product that’s in it’s early stages but looks very promising.  They both work well with a Zero Based Budget and actually make it very easy to leverage the envelope system as well.  You may want to check these out.  Some other notable mentions, Wesabe, Mint and GNUCash are some other products you could look into.  Microsoft Money (now end of life) and Quicken are some of the industry leaders but only really do well at tracking your finances.  You may just want to see what suits your needs.  For the rest of our discussion we are going to use YNAB as our reference point.

Setting up YNAB

The Budget Window

Assuming you’ve already installed You Need a Budget you’ll need to go in and seYNAB Budget Viewtup your categories and optionally import your bank transactions.  Let’s first take a look at the budgeting view.  I’ve setup the budget using some of the categories we talked about in Part 2 and you can see how they work in the month of June.  You’ll also see that I numbered the Master Categories that way they appear in the order I prefer rather than alphabetical something you might want to consider.  So for our month of June you can see at the top an available amount of $0 which is what we want it means that we have allocated all of our money in the different categories.  We’re putting our money to work.  You can also see that we have an overage in Dining Out (used to be very common for us) and how YNAB handles that by showing a negative amount of funds available for July with the expectation that you’ll make up for it then if you don’t move money around in June.  This is really a key feature here, it accounts for things that may pop up and allows you to adjust appropriately.  It also allows you see where your running balances in each category are, as you approach the end of the month those balances will carry over to July and helps with your variable expenses.  Very handy.  Editing is simple right click in the budget window choose New ““> Master Category and away you go.  If your categories are setup just enter a new dollar value in that field.  The YNAB website has video help on all aspects of using the program so it’s very straightforward to learn.

The Register Window

ynab_register

Now let’s look at the register which is really a software version of a check register.  You enter in your transactions and assign them to categories that you defined on the budget window.  It’s really very simple.  You can very easily import transactions from your banks website by downloading the transactions as Quicken or MS Money format files and YNAB will import them into your register and you can assign the appropriate categories.  Once you get the hang of it you can do this very quickly.  You’ll see in our example we have two accounts a checking and a savings with our emergency fund.

Taking it With You

One of the downsides of a stand alone budget program is that you cannot access your budget anywhere”¦.unless you setup an additional piece of software.  There are several options here but all you really need to do is save your YNAB file into a common directory and then share that directory with all the computers that need access which is easy if you use something like Live Mesh or DropBox.  I personally use Live Mesh because not only will it keep my files synchronized with any computer I install it on but it allows me to remote connect to the machines as another way to access my files and fire up YNAB even if the computer I’m on doesn’t have YNAB installed.  Dropbox will allow you to synchronize the files as well, it’s really up to you.  Now you have a complete system that will keep your files synchronized and backed up in case of hardware failure.

Keep it Up

Now the rest is left to you to regularly update your budget, modify, tweak and win.  I hope this has been helpful and let us know if there is anything we can do to help you in your efforts. You can subscribe via RSS to be sure not to miss the next FiscalGeek installment or also subscribe via email.

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{ 4 comments… read them below or add one }

Will 2010/03/06 at 12:38 am

I have tried just about every Mac, PC, and web-based personal finance and budgeting programs. I really like the envelopes method and it’s my number one criteria when looking to settle on a app. I still haven’t found an app that I feel totally comfortable with. I like the simplicity of YNAB, the convenience of Mvelopes, and the thoroughness of Quicken 2010, but I’m looking for something with envelope system and a good cashflow calendar to when income/expenses effect my balance. This is what YNAB seems to lack until you are a month ahead in the buffer. Have you reviewed http://www.weeklyenvelope.com or http://www.pocketsmith.com yet. I like some of the cashflow forecasting features in them, that seem to be missing from other products.

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paul 2010/03/06 at 9:01 am

Will, I have Pocketsmith on the block to review in the coming weeks, it’s an interesting product that tackles budgeting in a different way. The bottom line is you are right there is nothing that seems to hit it all, but the more and more I interact with people I see why no one has nailed it, because we all want something slightly different.

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Craig 2010/04/12 at 8:37 am

Have you been comfortable with YNAB’s lack of inherent reconciliation feature? That’s what’s keeping me from making the jump from Quicken. Thank you.

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paul 2010/04/12 at 9:07 am

Honestly it’s never been an issue for me. My account balances are in sync and have been since I started about 15 months ago happily importing my bank downloads every 2 weeks.

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