In the four years since I started this site, I have never come across another budgeting app with the kind of loyal following that YNAB has. This cult-like following of superfans can’t stop talking about how YNAB has changed their lives.
Even YNAB makes claims about the life-changing benefits of using the app…
“On average, new budgeters save $600 by month two and more than $6,000 their first year.”
That’s a pretty big claim. To see if it was legit, I took a deep dive in and explored one of the most popular budgeting apps of 2021.
YNAB Review 2021: Is it the most effective budgeting app of 2021?
What is YNAB?
YNAB stands for You Need A Budget. It was founded in 2004 after real-life couple Jesse and Julie Mecham realized they needed a better system to budget their money.
YNAB is solely a budgeting app, and it was built on a few seemingly simple rules:
- Rule 1: Give every dollar a job. You take the money you earn and allocate every single dollar you make to different expenses. The idea is to prioritize the money that’s coming into your accounts to everything from household and living expenses, savings, and debt.
- Rule 2: Embrace your true expenses. Realizing that you will have some less-frequent expenses, like holiday spending or vacations, you set an amount to spend on those and save up for each.
- Rule 3: Roll with the punches. It’s easy to overspend in some categories, and some expenses require fewer funds than you allocate money towards. This rule is about flexibility and teaches you that it’s okay to move money around when you need to.
- Rule 4: Age your money. The purpose of this rule is to help you start living on last month’s income. It’s easier said than done, but working the other three rules is meant to help you stop living a paycheck-to-paycheck lifestyle.
These rules are the core of the YNAB app, and they are why many users consider YNAB to be a complete game-changer. These rules are meant to alter the way you approach spending, saving, and even thinking about money.
How does budgeting with YNAB work?
YNAB uses zero-based budgeting, or what they call budgeting to zero. Zero-based budgeting teaches you that you are in control of every dollar you are earning, and it’s incredibly effective for people who want to pay off debt and/or build their savings.
See, what happens for a lot of people is that they approach debt and savings by saying, “I’ll take care of that with what’s leftover at the end of the month.” In that lies a problem, because unless you make a point to use a certain amount of money for savings or debt payments, it’s really freaking easy to have nothing left at the end of the month.
Zero-based budgeting gives you the flexibility to buy all the lattes you want… or whatever extra expenditures you have… while showing you how those lattes will affect what you have to put towards other expenses.
With zero-based budgeting, there is no guesswork. You know exactly how much you have to work with and where it should go. And YNAB’s second rule, roll with the punches, reminds you that it’s okay to move money around if you occasionally overspend.
YNAB isn’t the only budgeting app that uses zero-based budgeting – Dave Ramsey’s budgeting app EveryDollar is built on the same principle.
Setting up your budget with YNAB
YNAB is really similar to most any other budgeting app:
- You sign up
- Link your accounts
- And start customizing your budget
YNAB comes with present budgeting categories which you can change, delete, or add to. You can automatically sync transactions from your linked bank and credit card accounts and start categorizing.
Or, you can enter every transaction yourself. While this might sound tedious, a lot of people like this option because they get more hands-on with their money and really see where it’s all going.
How much does YNAB cost?
There are a lot of free budgeting apps, and YNAB is not one of them. YNAB costs $83.99/year, which is billed annually and works out to $6.99/month.
YNAB offers a 34-day free trial, and those extra four days give you a little time to see what it’s like to spend a full month budgeting with YNAB. There is also a 100% money-back guarantee if YNAB isn’t working for you.
YNAB is free for one year for students with a valid .edu email address, with a 10% discount after the first year. They also offer a referral program that reduces the amount you pay for YNAB, and I’ll explain more about this further down in my YNAB review.
Where YNAB shines
YNAB is free for students
This isn’t uncommon for personal finance tools and budgeting apps, but it’s still worth bringing up. If you’re in school and looking towards graduation, one of the things on your mind is how you’re going to pay off your student loans. A budgeting app like YNAB can help you set up a debt pay off plan.
Again, you’ll need a valid .edu email address to receive your free student account with YNAB.
Stellar customer service and support
In the bottom right-hand corner of your YNAB dashboard is a little button that makes it easy to search through help articles. If you can’t find an answer to your question there, YNAB is known for having a fairly quick email response time.
You can contact YNAB at [email protected]
There is also an active support forum and the founder, Jesse, has even done live chats on Reddit to answer questions.
Net worth report
Knowing your net worth is a good way to gauge your overall financial health, and YNAB gives you access to that number right on the app. There are charts and pie graphs that show you how your net worth has changed month to month.
I will say this, it isn’t nearly as comprehensive as what Personal Capital has to offer. You can read why I rely on Personal Capital for net worth and investment tracking at Personal Capital 2021: Free Investment and Net Worth Tracking.
YNAB family of apps
As we’ve become more reliant on our phones and devices for access to our financial accounts, YNAB has responded with a huge family of apps that automatically sync across all devices.
You can now get YNAB for:
- Apple Watch
Each of these apps is clean, intuitive, and well-integrated.
YNAB offers free education all day, every day
To help users work YNAB’s rules and learn more about how to interact with the app and their money, YNAB offers:
- Free workshops. There are several workshops a day, and they run approximately 20 minutes long. You can find workshops on topics like developing a budget routine, creating a debt paydown plan, cutting spending, and more.
- Timed Dives. Based on the amount of time you have to spare (a lunch break, evening in, or just five minutes), YNAB has step-by-step video guides and articles.
- Whiteboard Wednesdays. Every Wednesday, YNAB releases another 5-10 minute video. YNAB has run a series on investing, advice on aging your money, and more.
All of this educational content is available and free for non-YNAB users too.
YNAB’s referral program was set up with the hope that if you love YNAB, you’ll tell your friends and family all about them. You are given a referral link to send to anyone who wants to try YNAB out, and if they pay for a subscription, you get one month for free.
There are no limits to the number of free months you can earn. Each referral bonus you earn pushes back your renewal date by a month.
This program was set up to help business owners boost their team’s productivity and reduce their financial stress. They offer this program because studies have shown that the less financial stress employees feel at home, the better employees they become.
If you are looking to help your employees manage their money, YNAB’s Wellness Program offers:
- Email onboarding
- Dedicated online portal
- 1:1 email support
- Weekly small online workshops
If you have a larger company, this program also comes with a private kickoff and live, onsite intro workshop with reimbursed travel expenses. The cost per user is still the same, but the idea is that you’re investing in your business through your employees’ financial health.
Zapier for YNAB
With Zapier, you can connect over 1,500 different apps to your YNAB account to get an even more comprehensive and personalized experience. Some of the Zapier add-ons include:
- Texts when your account goes under $200
- Texts when you overspend in a category
- Adding transactions from linked accounts to a Google spreadsheet
- Custom workflows
And, if you have Phillips Hue lightbulbs, you can use one of YNAB’s Zapier apps to make a scene when you fully fund one of your goals.
Access to older versions of YNAB.
YNAB has gone through several iterations before getting to where they are now on YNAB 5. You can still download older versions back through YNAB 3. I’m not sure why, but some people just really love YNAB’s older software.
What you might not love about YNAB
YNAB isn’t free
There are a lot of budgeting apps out there, and a number of them are free. YNAB isn’t one of them. Even EveryDollar, another zero-based budgeting app comes with a free version, although it’s full of adds, which YNAB doesn’t have.
Here are a few articles to see how YNAB compares with other popular budgeting apps:
Part of why YNAB works so well for so many users is because it trains you to take a different approach to spending and saving, the biggest being that YNAB wants to you age your money. This can be hard to learn and implement, and many users may not see this happen in the first couple of months.
While you can have a great budgeting experience with YNAB, it will take some patience and work on your end to feel the full effects of using YNAB.
Not great for investment tracking
If you want your budgeting app to also have investment tracking tools, YNAB just doesn’t meet the mark. You can link some of your investment accounts – for example, you can link a Stash account, but not an Acorns one.
I’m not trying to say that you won’t find YNAB useful, but if you want robust investment support, Personal Capital is the best in my opinion.
Read Personal Capital vs. YNAB: Which Money Tool Should You Use First to learn more.
Free For Students
Customer Service And Support
Net Worth Report
Easy To Learn
My YNAB review final word: YNAB is straight-up budgeting
You may have gotten this point already, but I want to say it again. YNAB is budgeting pure and simple. There’s nothing wrong with that, but you should know that before proceeding.
And in all honesty, having a budget is one of the most important parts of a healthy financial life.
Knowing how much you’re earning, how you’re spending it, and taking control of every dollar that goes in and out is one of the only ways to make big financial goals happen. A good budget will help you see when you need to make more money, where you’re spending too much, and how to reconcile everything.
A budget alone is a powerful tool and YNAB users overwhelming say that budgeting with YNAB has helped them gain control of their finances and work towards a better future.
Now, will YNAB help you save as much as they claim? It’s highly possible that it will. With a wealth of support and four rules to teach you how to interact with your money in a positive way, YNAB is setting you up for success. But, it’s on you to make it work.