You Need a Budget (YNAB) 3.0 Personal Finance Software Review

You Need a Budget 3 Review

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in Automated Finance,Budget,Review

Just yesterday You Need a Budget 3.0 (Open Beta) was released into the wild so I upgraded immediately. I know it’s sad, but it was almost as if I got an early Christmas present. I use YNAB Pro almost on a daily basis and have for about a year solid. It’s worked great for me keeping us right on budget and has been incredibly solid tracking our expenses and income. So when I heard there was a beta coming I waited with excitement at a face lift to my much loved finance software. Well I fired it up today and the first thing you’ll notice is that it runs on Adobe Air. What’s that got to do with anything? Well what it means is that this software is equally at home running on your Windows 7, Vista, XP PC as well as your Mac or even your Linux machine. This is a big deal as previously it only ran in the Microsoft Windows world. After clicking around and looking at the new and shiny parts I really started to see that this was much more than just a face lift, this is a full foundation rebuild and then some.

What is You Need a Budget 3.0 Pro?

If you are not familiar with YNAB it’s essentially a standalone software package devoted to budgeting and income/expense tracking. It’s beauty is that it’s fully centered around the zero based budget. You enter in your income for the month and then work backwards allocating your money in your different categories until you’ve given all of your money it’s job for the month. Those interested in paying yourself first, should be all over this. Okay enough about the background let’s look at the features.

YNAB 3.0 Unboxing

Okay didn’t come in a box, it was a download but I think it’s wasteful to have all that packaging just so they could give you a DVD and some sales propaganda. I’m happy with the download. When 3.0 goes out of beta they should have options for ordering a DVD if you are so inclined. If you’ve used earlier versions of YNAB it’s a piece of cake to just open your previous data file and you’re good to go.

Inline HelpDocumentation

Obviously since it’s a download you’re not getting a printed manual or anything of the sort so you’ll have to resort to the help built in or you can watch a variety of videos on the YNAB website. Also as part of the package you get access to free live online YNAB coaching as much as you want witha live Q&A session at the end. That’s a pretty fantastic deal with software that’s pretty easy to use anyways. On top of that the Quick Help located in the bottom left corner can certainly help walk you along. For a product that is supposed to be a beta the help is all there. I wish the same could be said for Quicken 2010. Intuit are you listening?

YNAB 3.0 Accounts

ynab3_registerThis is analagous to a check register where you’ll enter your income and expenses. If you ever used MS Money, or Quicken this will look very familiar to you. Enter in the date of your transaction, the payee name, the category, any memo you would like to enter and the amount as an inflow or outflow. We’ll take about categories a bit more in the budgeting section.

Register New Features

Some of the new features in the register includes the ability to search your accounts for specific transactions. So now if you want to see every time you’ve shopped at the yarn barn, type that in the search box and you’ll see them all. Also now on the same page as the register is the scheduled transactions so you can see what may be coming down the road and add right from the register. Very handy. Also by clicking on the little gear icon in the right corner there’s the option to turn on a running balance or turn off some of the categories.

And finally now there is a separate field for keeping track of the check # if you actually use checks any more. This is fantastic and just really is an elegant interface compared to YNAB 2.

Syncing YNAB 3 with your Bank or Credit Union

You Need a Budget can import your financial institutions transactions using most any file format from Quicken, MS Money or comma delimited. You just need to download those transactions from your banks online system yourself and then YNAB will open the file. There is still no option for YNAB to contact your bank directly for you. This really is not too much of an issue unless you have 15 different accounts then it could quickly become cumbersome.

You Need a Budget 3.0 – Budget Window

Budget WindowThis is the very nerve center of YNAB and why in my opinion it’s got Quicken beat hands down. It’s personal finance software built around a budget, not financial tracking software with a budget component. There is a lot to like in this new version. We’ll break it down.

Budget Categories

You setup your budget by defining Master Categories. These are your buckets for expenses. I have such master categories as Giving, Saving, Housing, Utilities, Food, Transportation, Clothing, Personal, Recreation and Debts. Under each master category you can create as many sub categories as you need. The best part about this new version is that you can drag your categories and arrange them however you want. In the older versions it would sort alphabetically by master category. I had to orient them the way I wanted by naming my categories: 1.Giving, 2.Saving and so on, now I can drop the numbers and arrange how I want. Once you have your categories setup you define your budgeted dollar amounts for each category.

Budgeting

The budgeting window has definitely been upgraded it now includes some more information including your starting YNAB buffer, Overspending, Income available next month and your Available to Budget amount. New to 3.0 is the ability to assign any overspending to the month back to that specific category for next month. It used to be that money was just taken out of the next months total Available Funds. So when you eat out too much this month maybe you choose to eat out less next month for instance.

As always YNAB has category balances which means from month to month you can carry a balance in specific categories rather than resetting them each month. This is a critical feature that most other finance programs have missed. This can be called variable categories or sinking funds. This is when you have traded your budgeting white belt in for your yellow belt. Now you are saving monthly for Christmas for instance so when December 25th rolls around you’ve got it covered and the money is there.

Quick Budget

Also a new feature the Quick Budget helps you to setup your dollar amounts in your various categories either using the previous months budget values, last months outflows, this months scheduled outflows or it can calculate an average of your budget spending over months if you have that data in YNAB. Some helpful little tricks.

ReportingYNAB Reporting

Previous versions of YNAB included only the most simple of reporting with no customization. YNAB 3.0 has a variety of reporting that you can customize by categories, time periods including spending and Net Worth. You can also export your data in CVS file that you can import in a spreadsheet program such as MS Excel. Much much improved over the previous version. Don’t expect though that you are going to generate your small business profit and loss statements or other advanced reporting this is really focused on personal spending reporting. For that it does an adequate job.

You Need a Budget 3 Review Wrap-Up and Recommendations

Who’s It For?

YNAB 3 is for anyone who wants to focus their finances soundly on a budget and track their income and expenses from month to month. If you have used Quicken or MS Money and the past and just felt overwhelmed by all of the extraneous tools and options this is a great choice for you.

If you use older versions of YNAB I highly recommend the upgrade. The move to the Adobe Air platform means that YNAB is equally suitable for Windows, Mac and Linux users so OS choice is no longer an issue.

Who’s It Not For?

If you are looking for an all in one software for managing your budget and expenses as well as investment tracking then this is not going to do it for you. There is only the most basic support for tracking your investments and it’s all manual. Also if you must absolutely have automatic account transaction downloads then you’ll need to look elsewhere. You have to manually import the transaction files into YNAB.

My Recommendation

Alright I admit it I might be biased since I’ve been using YNAB for a while but I think you cannot go wrong with this program. If you want the most solid budgeting software out there this is it. Yes I would love it if they expanded and put in investment tracking to give Quicken a run for it’s money but I’ll settle for a solid budgeting platform. If you own previous versions and already like it, you need to upgrade no question. It’s that much better.

Where to Buy

Oh right how much does it cost? Well since they are in an open beta it’s a reduced upgrade price based on the following table.
If you buy the beta you can upgrade for free to the retail release when it comes out shortly. Once the public beta testing is complete YNAB 3 will retail for $59.95. If you’ve never used YNAB before you can just purchase the current released version and when it’s released you can upgrade to YNAB 3 for free. Purchase at the YNAB Website.

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