I have just received a reply from Jesse from the You Need A Budget site. YNAB is one of the sponsors of No Credit Needed, and I wanted to give you an opportunity to learn more about his spread sheet based budgeting plan. I personally use the YNAB system, and I think that you would benefit from using it. I want to thank Jesse for being an affiliate, and I hope you’ll check the link above or below, and check out his work. Here’s the email interview:
1. How long have you been actively budgeting?
When I was in high school I decided to write down everything I spend. After a few months of that I noticed I spent way too much on nothing and it helped me realize the control you can gain over your spending by tracking it. I wouldn’t call what I did “actively budgeting” though. I have been following the Four Rules of YNAB since I married my wife in February of 2003.
2. Why did you choose to design around excel? (What other platforms does YNAB support? Open office, mac, etc?)
I chose to design it first in Excel because that just seemed like the logical choice if I wanted to set up my own budget. I had MS Money (a free copy w/ the purchase of my laptop) and it did anything but budget — so making one seemed like an obvious answer. The nice thing about users of YNAB for Excel is that they can customize it to their liking, dig into the formulas themselves, alter it (for their personal use), etc. I’ve seen many users’ sheets and they are impressive: goal tracking, checkbook balancing, reminders, etc…anyway — back to the topic. YNAB can also be used with a very nice free spreadsheet program called Calc, which is part of the OpenOffice suite of products. It’s also compatible with Excel for the Mac.
3. Do you consider yourself to be more of a natural “saver” or “spender”… depending on your answer, does this make it more difficult or less difficult to budget.
I’m a natural spender. My wife is a natural saver. I honestly would prefer focusing on the income side of the equation so I don’t have to worry about the outgo — but everyone knows that’s a fallacy. Expenses mysteriously match income when they’re not consistently monitored and told what to do.
4. Do YOU ever stray from your budget? (or, do you find that you have plenty of “play” money due to having a good, honest budget)?
Every single month there’s something. In the free 10-day ecourse I’ve written, I mention that we have never once stayed within our grocery budget. That’s not entirely true now and needs to be revised. We’ve stayed within it the last two months. I’ve noticed that if we don’t remind ourselves of the budget balances a few times throughout the month, it doesn’t do much good.
As far as what a “good, honest budget” does for us? It increases our dollars’ capacity to do their jobs and in that regard, we do have more peace with our money than our comparable peers around us that choose to purchase and financially react on a whim.
5. Does your system work with IRREGULAR income?
When I first developed YNAB, I was on a very small, irregular income. Rule One is just for those types of people. I’d recommend your readers head to the site for an in-depth explanation, but the short version of the story is that there’s a way to remove the unknown factor of variable income relatively quickly.
6. How much does your system cost?
Well, if you don’t buy it, it will cost you hundreds of thousands of dollars in lost time and money — Oh! You mean what’s the price? It’s $19.95 and comes with a 60-day moneyback guarantee. I try and give people enough confidence to go ahead and try it out without worrying about whether it will work for them.
7. Do I have to be a money “expert” or super-duper math dude to work the YNAB system? (How DIFFICULT is this system to use, compared to say Money or Quicken?)
You parenthetically asked to compare the ease of use of YNAB with Money or Quicken? There is no comparison. With YNAB, there is a 14-page setup guide, and a repository of FAQs for special cases (business reimbursements, credit card usage, etc.). Most people get their heads around the system within about a half hour. Another half hour of testing it out hands-on and you’re there. I have users now that are so savvy on how it all works they consistently teach me a thing or two. You need a very, very rudimentary knowledge of how spreadsheets work (they’re made up of cells, you can type in those cells…) but other than that — well, let’s just say that there’s a 75-year old lady in New Jersey who’s having a lot of success with it.
8. Can I use the system to create multiple budgets? (In other words, can I use it for my personal budget and a personal business budget?)
While I haven’t really delved into specific business budgeting to nearly the same degree as I have with personal finances, I don’t see why you couldn’t incorporate the same Four Rules into how you handle your business’ cash flow.
9. What are the 5 personal finance sites you visit most often?
I subscribe to dozens of personal finance blogs so I can constantly guage the pulse of the personal finance blogosphere. I’m a huge fan of the Wall Street Journal as well. I don’t know if five even would do justice to the amount of reading I do online regarding personal finance.
10. Are you debt free? (You know I had to ask!)
Eh, a few months ago I could’ve said yes without qualification. In reading so much about personal finance — and seeing quite a bit about credit card arbitrage — I thought I’d try it out and see what all the hype is about. So I have some 0% interest debt that’s sitting in a high-interest savings account earning some money. Personally though, I won’t be doing it again. It’s not that I find it inherently difficult, wrong, or dangerous — just a slight annoyance for me to initiate the online payment each month to stay current. And as any YNAB users know, I prefer to keep things simple, simple, and simple.
My only last point would be to say that if you’re spending more than an hour or two each month managing your money, you ought to give YNAB a try. We all need a budget.
If you’d like to give the YNAB system a try, please click the link below: