YNAB

YNAB, which stands for You Need A Budget, is a unique personal finance app with a singular focus: to teach you smarter ways to spend your money so you can save more. It has a steep learning curve and requires regular attention, but the eventual reward is a flexible monthly spending plan that’s tailored to meet your goals. It's an app that may change the way you think about money. YNAB is an Editors’ Choice winner, though it's less traditional than our other top picks. We recommend Simplifi to most people and Quicken Classic to people who micromanage their finances.

How Much Does YNAB Cost?

YNAB costs $14.99 per month or $99 per year ($109 as of August 1, 2024, for new signups). There's a 34-day free trial. Why 34 days? After one month, you'll have just started understanding your budget and spending. So, YNAB gives you a few extra days to think it over. There's no credit card required to try it, and students can apply to have the fee waived on their account for one year.

YNAB is more expensive than most finance apps we've reviewed, though Monarch Money charges $99.99 annually. I think YNAB is worth it, especially with new features like Apple Card integration, YNAB Together (account sharing, up to six people), and enhanced category management. 

What YNAB Is and Isn’t

We have to call YNAB a budget solution—it’s in the app’s name, after all. You set spending targets for how much money you need for bills (like electricity and internet), needs (categories with more variance, such as groceries and medical expenses), and wants (optional expenses like dining out, entertainment, and donations). But you can’t actually assign dollar amounts to those categories until you’ve received money, like a paycheck. Transactions are either imported from your online bank and credit card accounts or entered manually.

(Credit: YNAB/PCMag)

YNAB is based on a philosophy called zero-based budgeting, which means you assign dollars to categories until all the money is gone. In fact, that’s YNAB’s first of four rules that underlie its design: 

1. Give every dollar a job
2. Embrace your true expenses (turn large, infrequent expenses into manageable chunks)
3. Roll with the punches (if you overspend in a category, adjust)
4. Age your money (spend less than you earn, and eventually, you’ll be spending money you earned a month or more ago)

Typical budgets, like those found in Monarch Money and Rocket Money, rely on forecasts. You estimate your future income and expenses, and the apps show you where your actual inflow and outflow of money fall in relation to your target. This might be sufficient for individuals who just want an accounting of their progress and who don’t want to spend a lot of time finessing their budgets. 

YNAB also differs from competitors in that it does not include bill pay, investment tracking, and goal management...though, if you think about it, your work with YNAB is all about setting and meeting all-encompassing financial goals. You don’t just say you want to save $3,000 for a vacation and let the app monitor your progress; you teach YNAB how all your spending patterns match your goals and how your income and expenses ebb and flow over the months. In this way, YNAB is a good choice for people with unpredictable incomes and expenses, like gig workers. YNAB gives you tools to help you fine-tune your budget, too. But if you do want bill pay, investment tracking, and more traditional ways to set financial goals, go with Quicken Classic instead.

Another difference is that YNAB’s Android and iOS apps, attractive and intuitive as they are, are not quite as full-featured as the browser-based version. Some personal finance apps are the opposite, Credit Karma being one example because it has a few features that are exclusive to the mobile app.

(Credit: YNAB/PCMag)

Unlike Quicken Classic, which gives you numerous customizable reports, YNAB only has three on the browser-based version: Spending, Net Worth, and Income v Expense. The mobile app has only two: Net Worth and Age of Money, which measures how long, on average, your money sits in your accounts between earning and spending. If those few reports resonate with you, it's probably a good gauge that you'll stick with YNAB.

Learn to Use YNAB With Help

The mechanics of using YNAB are not that difficult—if you take advantage of the app’s support and education services (more on that later). From the start, it's friendly and easy to use. It learns about your lifestyle and finances, as most personal finance apps do when you're starting with them, and creates an initial list of categories that will apply to each line item of your income and expenses. You can add to and edit these categories anytime. 

If you want to import transactions from your bank account, credit cards, and other financial accounts, you have to connect to them by logging into each account through YNAB. YNAB uses multiple third-party financial connection services, including Plaid, to ensure the connections are safe and secure.

When getting set up, it's much better to work on a computer or laptop and use the browser-based version of YNAB, which lays out your budget like a mini-spreadsheet with columns labeled Category, Assigned (real dollars that you’ve allocated), Activity (imported or manually entered transactions), and Available (what’s left over). These numbers change as you spend budgeted dollars.

(Credit: YNAB/PCMag)

A vertical pane on the right shows your options for every category, including the frequency (whether the income or expense recurs weekly, monthly, yearly, etc.), amount, day of the month for the transaction, and your preference for the next month’s handling of that category (often, allocate the same amount). YNAB also tells you if you have cash left over from the previous month. You can have YNAB auto-assign categories based on what it’s learned. 

Once you’ve been using the app for a few months, you get a running update of that category’s behavior as well as historical information about each.

A Lengthy Work in Progress

It can take a while for YNAB to click. You probably won't hit your target amounts the first time you set up your financial framework in YNAB. You may not even succeed the second time or the third. And no matter how long you use it, you’ll probably always have to make adjustments some months. But the longer you use YNAB and the more it learns about your money habits, the more accurate your target amounts will probably become. Awareness of your monthly expense patterns can lead to more disciplined spending—and hopefully, more money left over.

(Credit: YNAB/PCMag)

Getting Help

YNAB knows that you will struggle at first, and it does a terrific job of providing guidance. Its educational tools are presented in a lively, entertaining fashion. 

A searchable help system has well-written and understandable how-to articles. You can contact support by email and chat and expect a response in one to two business days. YNAB has dozens of free workshops and webinars each week, and a robust YouTube channel. You might want to spend some time just watching videos and taking a webinar or two before you even start working with the app.

Is YNAB Safe to Use?

YNAB has been around for 20 years. The company promises to keep your information encrypted and secure and makes its full security policy publicly available. The policy is strong. YNAB uses bank-grade or better encryption, and it does not store your bank credentials. In addition, the app uses multiple security types, including multi-factor verification.

Verdict: Spend Money to Save Money

YNAB isn’t hard to use. The part that's challenging is understanding the philosophy behind it and turning that into smart financial management. But the payoff is worth it. YNAB is an Editors’ Choice winner because it can change the way you approach spending and help you save in the process, as long as you’re diligent. Quicken Simplifi and Quicken Classic are two other Editors’ Choice winners for their excellent but more traditional personal finance management. Simplifi is best for most people, and Quicken Classic is for those who like micromanaging money.