A Comprehensive YNAB Review: A How-To Guide and Best Practices for Using YNAB

Anyone who spends time with me has probably had to sit through some kind of YNAB preaching done by me.  As it truly turned my life around, I can't say enough about it.  It-IS-THE-BEST-BUDGETING-SOFTWARE-EVER!!  It does have an annual subscription fee, but I can promise you, it will save you the amount you pay and more.  Not to mention the intangible benefit of achieving peace with your finances.  You'll never need to remember bill due dates again.


I've written this guide with the intention of showing you how to use YNAB and some best use practices.  Should you subscribe to YNAB using my private referral link, you'll receive an additional free month.  YNAB offers you a 34 day free trial, so using my referral link adds one more month.  This article is an unbiased review based on my true experience of the product itself.


Cost:  As of today's date July 2017, YNAB is an annual subscription for $50 USD.  Included is access to the online software accessible through any browser and the smartphone app.  In addition, students can receive YNAB FREE for one year, in addition to the 34 day free trial.

What Does YNAB Do?


That's a loaded question.  The simplest answer is to ask if you remember the envelope system of budgeting?  Gail Vaz Oxlade was famous for using numerous jars (same principle) filled wish cash to help individuals with their budgeting.  The envelope system includes divvying up cash into envelopes based on set amount for various budget categories.  Groceries would receive a certain amount, fuel would receive a certain amount, rent would receive a certain amount, and so on.


There were two crucial components to the envelope system - the first was the physical separation of cash which ensured your spending decisions came from what was left in the envelopes versus the balance in your bank account.  The second critical component of this system was that only money physically in your possession was being budgeted.  In other words, you couldn't anticipate the money you expect to receive in any given month - you'd only plan with what you had at that time.


This is the crux of what YNAB is able to do, but digitally.  While using physical cash is a great, simple method of budgeting, it seems unrealistic given the pace of life we exist in today.  In addition, many payments forms are leveraged by most of us, depending on our purchase.  As an example, cash is great, but I can't book a flight through Expedia using cash.


Aside from being great software, YNAB is rooted in phenomenal financial rules that guide how one's budgeting should be done.  The full YNAB Method (AKA YNAB rules) can be found HERE.  Or, if you prefer, I've simplified them for you below:


1. Give Every Dollar A Job


This means, when your cheque rolls in, you need to decide what every single dollar will do.  Sort of like directing traffic.  If you get paid every two weeks, what does that money need to do before the next time you get paid.  Perhaps you'll have to buy a birthday gift, get some fuel, pay your rent, etc.  There should be no 'dollar' unaccounted for.  As I mentioned above, the software will help to divvy up your digital funds into their related categories.


2.  Embrace your True Expenses


When working with clients, I ask them to create a budget.  Common budget oversights include the unexpected (yet very likely) expenses.  Examples include car repairs - while most of us know this is inevitable, few plan for their unexpectedness.  YNAB encourages building categories for these not-so-frequent unplanned expenses, as these are a huge disruption for cash flow and a MAJOR contributor to financial stress.  Think vet bills, Christmas, car and home repair, etc.  By starting to stash small bits of money into 'envelopes' for these events, you'll offset their negative impact with they occur.  


3.  Roll with the Punches


This is one reason YNAB is different from mainstream budgeting.  With YNAB, the budget is meant to be fluid.  Overspend in one area, and underspend in another - pull excess money from one 'envelope' and move it into the other.  I am consistently shuffling money in my budget as life 'happens'.  Since any person's financial world isn't entirely predictable (do you know exactly how much you'll spend on groceries this month?), your budget should adapt as life happens.


4.  Age Your Money


This rule takes some time for most people.  Think of this.  When you put your paycheque in the bank, how quickly do you start using that money?  Essentially it goes in, and you start paying off your credit card, paying other bills, going shopping, etc.  With YNAB, one of the primary objectives is to have that money sit for a long time, using older money first.  Over time, you contribute to a 'buffer' category (or envelope).  It might only be a $100 at first.  Over time you'll save enough money to cover an entire months expenses, needing less and less reason to need your paycheque the day you receive it.  It starts to give you more and more time to correct your course if your pay is interrupted in any way.


Three Primary Components of YNAB


1. The Account Menu


All accounts logged to YNAB are summarized in the left margin of the software - included are their related balances.  Of course, you have to have accounts added to see this - so when you get started, you won't have any accounts to see.



You can also click on one account (Visa is selected in the screenshot below) and see the detailed transactions in the main screen to the right.  Here you can see which items have been reconciled with your banking statement, and those which are still pending.  In addition, the red writing towards the top middle of the screenshot demonstrates which portion of your balance is cleared (has been reconciled), uncleared (is left unreconciled), and working (accounting for both reconciled and unreconciled transactions).



2.  The Budget Screen


Essentially, the budget screen is capturing all of your 'envelopes' - called categories in YNAB.  You can see Rent/Mortgage, Electric, Internet, etc.  This screen shows how much you budgeted, what you actually spent, and what remains.  There is an abundance of information on this screen.  I'll dive into this in more detail as we move through How-To use YNAB.  Note: Any master category and sub-category seen below is completely customizable to suit your needs.  Rename headings, drag headings up down, add notes, create goals, etc.



3.  The Report Screen


Reports provide breakdowns of where your money goes.  The image below doesn't contain overly interesting information as my sample budget doesn't contain enough information.  However, the more the budget software is used, the more the circle depicted below would be color coded and broken up - demonstrating which money went where.  It offers a visual of where money is spent.  This screen allows you to create custom reports, using only certain categories, and only certain time lines.  It can give great insight as to where your money goes over a certain time period.  I don't leverage this feature as I find the search feature (to be discussed later) filters enough information for my needs.


Getting Started with YNAB

Note:  In addition to the verbiage below, I have a video on YouTube that walks through the process - you might find it helpful.  To view, click HERE.


To Prep YNAB You'll Want the Following Handy:


  • Your online banking login information
  • A computer
  • Your smartphone/tablet or both (if applicable)
  • Paper
  • Pen/pencil
  • Calculator


SEVEN Simple Steps to Get Started


First of all, shake the urge to track anything historical in regards to your spending.  Many people get started and want to add financial information up to and including the beginning of the year, or the beginning of the month.  The best way to get started is working from today, and forget everything in the past.  You won't need that information to be a savvy budgeter.  Start budgeting based on your accounts balances as they stand right now, and focus on logging what you spend from today forward.


STEP 1:  Create a YNAB Account & Download the App


To Get Started, create an account with YNAB.  Again, using my link offers an additional free month, should you choose to subscribe at the end of your 34 day trial.  Click HERE for YNAB FREE TRIAL.


Then, download the app to your smartphone.


Now, you'll have access to your YNAB from any computer and your smart devices.


STEP 2:  Determine Budget Accounts and Add Them to YNAB


To get started, you'll have to make a few decisions first.  Can you identify which bank accounts you regularly 'spend' from?  In other words, you might have a mortgage, but it likely remains somewhat stagnant - you don't spend from it.  For me, I spend from my checking account, one primary Tangerine credit card, one Avion Visa, and one Hudson's Bay Mastercard.  In addition, I have a line of credit I use from time to time.  These accounts for me, would be considered 'on-budget'.  This means, when I spend from them, they will impact my YNAB budget. 


In the account screen, you're able to add 'budget' accounts and/or 'tracking' accounts.  When you get going, it'll look something like this…



When getting started, the most important accounts to add are those that you spend from regularly.  The reason?  These are the accounts that will directly tie into the budget.  For example, set your grocery category at $400 for the month.  Use any 'budget' account (debit, credit, cash, etc) to buy groceries and the related activity will deduct from the $400 amount budgeted.


Things like mortgages or investments can be added to YNAB, but they end up being 'tracking' accounts, also known as 'off-budget' accounts - you're essentially just tracking the balances, but not monitoring spending per se.  For the purpose of getting started, just jot down the accounts you'll include as 'budget' accounts.


Another decision is whether you'll import banking transactions or input them manually.  Older versions of YNAB did not offer the ability to import transactions - this was intentional as you'll have a keen eye on your finances when you're inputting every transaction manually.  As this is the way I started with YNAB, I still input everything manually. 


Here's where it's important to be honest with yourself.  If you've never logged/tracked your spending, it might be best to start with the import function.  This way, you could set a calendar reminder to check in with YNAB once per week and click download.  If you choose to do manual and only check-in once per week, you could have a heap of receipts to log, and the overwhelm could be enough to scare you off.  Make the decision now, you will log transactions manually or using the import feature?


I compare budgeting to a new diet or workout regime.  It's unlikely to go from being a couch potato to a gym junkie overnight.  Start small and feel proud of whichever commitment you choose.


Now, go ahead and add your accounts.  To do this, you can watch a video I made on adding accounts.  CLICK HERE TO VIEW


STEP 3:  Set Up your Personalized Budget


Next, you'll want to set up your budget.  To get started, you might want to take some time to determine your budget categories in the first place.  You might want to sketch some ideas down on paper before transferring your budget into the YNAB software.  For now, ignore how much you'll want to budget for each category - just focus on the headings for your categories.  YNAB, in it's default state, will have some pre-existing categories to help you get started.


The easiest place to start is by thinking about all your regular and recurring expenses.  Comb through your banking statements and make note of anything considered a bill or automatic payment - these are things you'll want to create categories for.  Just jot all your ideas down in any order, you can get organized later on. 


Now, as you scan through what you wrote down, are you able to give overarching categories for any of your individual categories.  For example, if you have mortgage/rent, electricity, property taxes, and insurance - these could have a more broad heading like Housing. 


Try grouping other categories together as you see fit - whatever makes most sense to you.  Doing this may help in two ways: In helping your budget stay a reasonable size, by having more broad categories rather than having a 'line item' for every single expense.  Second, by purely providing organization to your budget.


Now that you have some categories written down, head to the default budget screen in YNAB.  Here is a sample of what you'll likely see:



While YNAB has these categories in place from the start, they can be ENTIRELY overhauled for your specific needs.  As you can see, there are Master Categories (like Credit Card Payments, Immediate Obligations and True Expenses) and regular categories which fall beneath each Master Category. 


Note: For most people, I imagine that master categories provide organization only.  However, for those in business, Master Categories become increasingly important.  For example, if you operate your personal expenses and income and want to track your business expenses and income for your accountant, you'll be able to see everything that falls under a 'Business' (or your chosen name) Master Category when exporting the data into excel.  This can be really beneficial come tax time. 


You can now start adding the categories you've written down.  As some of these might already exist (by default) you don't need to add them again. 


To Add Master Categories, you can click 'Category Group' as depicted in the image below.  Then type the name and click 'OK'.  If the Master Category is loaded higher or lower than you like it in your budget, you can drag it up or down as you see fit.


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To add a regular category beneath an overarching Master Category - hover your cursor to the right of any Master Category - click the plus button that appears to the right.  In the event you load a category under the wrong Master Category - just drag it up or down to the correct place.



To delete any Master or Regular Category, click the related category name (it'll become underlined) and then click Delete.


To arrange any categories, just click the category and drag it up or down.


Once you have your categories entered, you might give thought to better organization of these categories.  Keep in mind that your budget categories will end up as digital envelopes in a sense so it might make sense to put those as the highest priority towards the top of your budget screen with those 'nice' but not essential towards the bottom.  The reason for this is many people start budgeting lacking enough funds to fuel an entire month, so they have to prioritize which things they'll budget first - as such - the non-negotiables (housing, food, transportation, medical) will be the highest priority (perhaps appearing toward the top of the budget) with things like vacations and other savings as lower priorities (appearing near the bottom of the budget).


STEP 4:  Determine Budget Amounts


Budgeting becomes increasingly complicated when new budgeters have to estimate undefined costs (or variable costs) like groceries, gifts, or vacations.  While they know they incur these expenses, they're unsure how much to budget for these areas.  One method is to make your best guess and just get started. 


Alternatively, and a more encouraged method, is to leverage your banking statements.  Add up all grocery bills over the prior three months and divide by three to get an average.  Same for gas, clothes, vacation, dining, etc.


Once determined, I like to add the budgeted number into the heading of each category - this way I know exactly how much I want to contribute to each category when I budget each month.


So rather than this:



My categories look something like this:



This way, I can brainlessly budget each month without thinking about how much I want to load into each category.  To do this, just click the text of any budget category and modify the heading to include the amount you're going to budget each month.



STEP 5:  Log Recurring Expenses and Income


One of the best features of YNAB is the ability to log scheduled transactions, leaving little chance of forgetting bills or expected income.  


To do this, brainstorm every expense you incur over the course of one year or perhaps two - in the event you have expenses that are due once every few years.  Here are some examples to get you started:


  • Cell phone
  • Electricity
  • Annual / Bi-Annual Dues
  • Licensing
  • Medical
  • Gym Memberships
  • Mortgage
  • Property Taxes
  • Spotify
  • iTunes
  • Netflix
  • Insurance
  • Credit Card Interest
  • Credit Card Minimum Payments
  • Loan Interest
  • Loan Minimum Payments


For each expense listed, you'll want to determine the bill category (ie. cell phone), the payee (ie. Rogers), the next date it's due (ie. July 30, 2017), the approximate (or exact, if known) amount due (ie. $100), the frequency it's paid (ie. monthly), the account its paid from (or for income, deposited to) (ie. visa), and whether its an automatic withdrawal or it's paid manually.


And, you might wonder what to do if you have a bill or income that isn't exactly the same each month/week/pay period.  It's best to just ball park a number.  For example, my cell phone bill might be $90 one month and $110 the next.  In this case, I'd enter $100, so at the very least I have a reminder of the approximate amount.


Tip:  Adding a reminder to pay your credit cards more regularly than they're actually due is a good idea too.  For example, I add a scheduled transaction every two weeks, reminder me to pay the balances in full.  Of course, if you have large credit card balances when you start, this isn't practical, but paying something every two weeks can doubly ensure you don't miss your monthly payment.


Once you've logged these details, review bills that you pay manually and back the date due up by one week.  For example if I manually pay my cell phone bill and it's due July 30, 2017, I would cross this out and bump the date back by one week, so now it reads July 23, 2017.  The reason is because once logged into YNAB, YNAB will remind you of these bills (only when you log into the software).  Logging the actual due date of bills that are paid manually will inevitably have them paid late as they generally take a few days to process through the bank.


Now that you have a detailed list of income due to you, or bills you'll need to pay, you can log these details in YNAB under the account they'll be paid to/from.


See VIDEO here on how to add recurring expenses / income to YNAB.


You might wonder the point of adding these bills and income sources to YNAB.  Not only is it a good reminder to pay bills on time, or to ensure they've processed correctly, it also helps you to forecast for your budget.  For example, when getting started it's common to budget from one paycheck to another - only budgeting in two week increments. 


To do this, you'll be able to click 'All Accounts' - see below.



Then, using the 'Filter' feature located in the top right corner of the screen, ensure  'Scheduled Transactions' is checked, then click 'OK'. 


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And, all the impending bills and/or expected income will pop-up - this way you don't have to comb through bills etc. - you'll have one simple picture of all financial obligations in your future making budgeting easy and stress less.  Of course, this only includes bills with a due date and wouldn’t include incidentals - groceries, clothing, or anything else that isn't a bill.


11 - YNAB Review.png


As an additional reminder, categories, in the budget screen, with impending bills will turn yellow, indicating there is something in that category to be paid within the current month.  While also incredibly helpful and a good visual tool, this isn't as useful for those who need to budget in increments smaller than one month.



When clicking the white space to the right of any category name, YNAB will populate additional information for that specific category.  In the case of a cell highlighted in yellow, I would be able to see why the cell is yellow (the purpose of the reminder) when calling for more information.


In the case of electric, it shows that one transaction (or obligation) occurs during this month.



STEP 6:  Budget Your Money


On the budget screen, YNAB should show the money you have available to budget. 



Now, you'll want to budget with what you have available based on what that money needs to do until the next time you're paid.  Imagine you have $3,000 available, similar to the image above, and you expect to receive your next pay check in two weeks time. 


As you learned above, first navigate to All Accounts, and view your upcoming bill payments.  Take note of the ones occurring between now and your next paycheck - budget for these items first. 


Once the impending bills are taken care of, I would budget for anything else I will need to spend on between now and my next paycheck.  If you're able to cover everything necessary and still have money remaining - this is a good time to make a debt payment or add this money to savings.


To add funds into the budget categories, place your cursor in the budgeted cell and type the amount you wish to budget - hit enter.



In the event you accidentally enter budgeted funds in the wrong category, or just want to move money around, watch this video on moving money between categories.


STEP 7: Track Your Spending


As I mentioned before, tracking your spending might include using YNAB's import feature or manual entry.  In the case of importing you'll want to create a regular habit of importing to keep on track.  You might consider adding a reminder in your phone for once a week, or every second night, depending.


Alternatively, if you've chosen to work manually, it's a good idea to ask for receipts for everything you spend.  I make this a habit and then each night I unload my wallet and log all my expenditures.


If you're utilizing manual entry, follow this link to see a video of how to log a transaction in YNAB.


In either case, (manual log or auto import) you'll need to ensure that the date of the transaction is logged, the payee (where you spent money), a category is chosen so any expenditure is deducted from the appropriate place, and finally any relevant notes.


In it's simplest form, here's what happens when you spend using a 'budget' account.  For groceries (as an example).  Let's assume you worked through steps one through seven and you've added some money into your grocery category - let's say $300 for the sake of the example. 


Then, you go to the grocery store (Save On Foods) and spend $75, which you then log or import into YNAB.  It would look like this:



No matter the account you spend from, YNAB will take $75 of your $300 grocery money.  So when you switch to the budget screen you will see $225 remaining.  Conversely, in the event you didn't budget any money for groceries, it would show a negative category balance of -$75.



This becomes your method for making spending decisions.  If you don't have money in a specific category or little money, you'll reign in your spending.  While your bank account balance might read $1,700, you might decide to say no to going to a restaurant or buying something because you don't have money for it.  The $1,700 in your bank account is tied up waiting to buy groceries, pay rent, pay cell phone bills, etc.

Additional YNAB Features


Export Options


As I operate as a self-employed person, the ability to export my YNAB data for reporting and for my accountant is crucial.  For example, within YNAB, I have a master category called Personal Business with related categories listed beneath included Business Income and Business Expenses.  When exporting from YNAB, I can export to excel and quickly filter only business related transaction - in a mere few minutes.  At the close of each quarter or each year, I have an excel file with all my transaction history.





The YNAB app isn't the equivalent of accessing YNAB through the online software, but is robust in it's own right.  I'm able to add transactions on the fly, including creating goals, and notes.  I can also easily see my bank balances along with plenty of transaction history.  Shuffling money between categories is more cumbersome and viewing scheduled transactions is not (as of today's date) possible.




The ability to reconcile your accounts is a process which ensures that what you have logged in YNAB matches what actually happened in your bank account.  This is crucial as it can demonstrate written cheques that have been written but not yet cashed - it can also help highlight erroneous transactions (wrong amounts or transaction not made by you) through your bank.


For this example, let's imagine, I have a checking, savings, and credit card account 'on-budget'.  To reconcile, it is best to work your way through from first account to last.


In this case, I would click on my checking account, and simultaneously log into my online banking.  If you're able to split screen and see both YNAB and your bank, this is the simplest way of reconciling.  Otherwise, you might have to flip back and forth between YNAB and your online banking.


To reconcile your account, take note of the furthest right side of the screen (in YNAB) on any given account.  You'll notice a grey circle beside each transaction.



You'll work your way through your bank statement and as you see any given transaction on your online banking and the same transaction logged in YNAB (with the same amount), you'll click the grey circle, turning it green.  This is telling YNAB, one by one, that yes, the transaction logged here is also on my banking statement and they're both the same amount.


Once you've moved through all transactions in any given account, your bank balance should match YNAB's 'cleared balance'. 



You might have YNAB transactions that were not reconciled and are not reflected on your online banking.  This might occur for a few reasons.  The first is if the transaction was done by credit card - as these charges occasionally take a few days to appear, so while you logged a transaction manually, it won't show up for a few days.  Alternatively, it could be that you logged a transaction under the wrong account.  Perhaps you noted you bought groceries via your debit card when in fact, you used your credit card. 


If this happens to you, you can tick the check box to the left of the transaction,



then navigate towards the top of YNAB to edit, then select move accounts, and select the correct account.



Search Function


In the top right corner of YNAB, a search bar is visible.



This search feature become increasingly beneficial as the information you add to YNAB increases.  In addition, the more information you add to your YNAB (for example, adding to the note field for each transaction),  the more information it will provide you with in the future.  For example, wonder what you bought someone last year for their birthday, you can search birthday or gift category - navigate to the purchase and see, in an instant, what you bought.  Or wonder what last years insurance payment cost you, search insurance (or the payee name) and YNAB will filter the results in seconds.


Split Transactions


Ever visit one store but buy things that fall into more than one category?  No problem.  With YNAB, you can divvy up the single bill into split categories, so each relevant category is affected.



In addition, when receiving income, it can be helpful to split transactions if you intend to split out taxes etc.  For example, if you receive a cheque for $3,000 but want a portion for income tax savings, a portion for sales taxes and the balance for you, this is also possible by using the split transaction feature.



For more information on splitting transactions, click here to watch a demonstration.


Viewing Budget Activity


Not only will YNAB let you know how much you spent in any given category, you can also find out all the transactions that resulted in the amount spent with one click.  Go ahead and navigate to the budget screen.  There are three columns for any given category. 




The amount budgeted, the activity and the balance.  Once you've spent money from any category, the amount will show in the activity column. 



For example, you budgeted $300 for groceries and have spent $280 - you might think, how could that be?  If you click the activity amount of $280, YNAB will summarize all transactions that contribute to this amount.  In some cases, you'll find you incorrectly categorized something - which can be corrected.  Or, you might find that you're just unaware of how much you truly spend in any given area.


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When clicking on any category, a bundle of information pops up in the right pane of your browser.  It is here that you can add notes.  For example, if you have birthdays to remember, you might add all names and dates in this section.  Or, if you have a category that is comprised of more than one expense type, you might add this detail here.  For example, I have a category called personal subscriptions, which is comprised of Netflix, Travel Insurance, and Strava - I add this to the notes so I remember why I'm budgeting the amount specified.





For any given category, goals can be set by clicking the 'Create goal' button.



Three types of goals can be set:


  1. Target Category Balance
  2. Target Category Balance by Date
  3. Monthly Funding Goal



1.  Target Category Balance - is a fairly vague goal type as this just means eventually you hope to have a certain amount of money saved in any given category.  Upon setting this type of goal - the following information will appear in the future.



2.  Target Category Balance by Date - is more specific as it includes the date at which you hope to save the set goal amount.  In this case, YNAB will show how much to contribute each month to stay on track.



3.  Monthly Funding Goal - is fairly straightforward.  This is not something I utilize, because, as I mentioned earlier and suggested to you, I included the amount I want to budget each month within the heading of each budget category.  This way I don't have to click each category to find out what I aim to budget.



Tracking Reimbursable Expenses


YNAB's previous version made it possible to carry a negative balance forward.  For example, when I used to buy supplies for my employer, I liked to keep the negative balance in that category as the debt wasn't mine - in a sense.  In addition, it was an easy way for me to remember what was owed to me. 


Current YNAB removed this feature - but the good news is that there is a work-around fix. 


As an example, I buy a bunch of items for my employer at various stores between mid June and mid July.  As I begin spending I create a negative balance in my reimbursable category, particularly because I hadn't budgeted for these items as they aren't really my debt.  Let's say by the end June, I spend $230 - therefore resulting in a negative 'Reimbursable' category balance of -$230.



And now, YNAB rolls into July.  When I check the 'reimbursable' category for July - the balance is zero, making it challenging to recall what I'm still owed by the employer.



To correct this, I budget -$230 into reimbursable.  This acts as a place holder for the prior month reminding me that $230 is still outstanding from the prior month, and now any additional spending will be added to this amount, making it easy to keep track of what is owed to me.


Room for Improvement


While YNAB, in my opinion, is the best budgeting software around, there are still some areas that could be improved moving forward.




I use YNAB with all my clients to help achieve the financial goals faster.  That being said, the learning curve for the software is large enough that some individuals give up before giving themselves a chance to grasp the benefits.  It takes a long time to get the hang of the product.  I wouldn't call it simple to use from the get-go. 


However, YNAB has a zillion resources to help with learning how to use it, including how to succeed financially.  So, for those who are committed and serious about improving their financial future, dig in by reading and watching all resources available to learn the software.






Dealing with Foreign Currency


When purchasing something abroad, it can be challenging to determine how to best log it in YNAB.  For example, when travelling to Europe, I eat at a restaurant spending 13 Euro - how can I log this in YNAB.


Currently, I would source a currency converter online, enter 13 EURO, and request the Canadian conversion - which, as of today's date would be $19.  This of course, doesn't account for my credit card's foreign transaction fee of 2.5%.  So, in this case, I would note 13 EURO within the note field of the transaction, and guestimate the final amount for the sake of budgeted amount - in this case I enter $19.50. 


When the transaction is finalized through my bank, I will tweak the amount with the final amount in YNAB to match the posted amount.


Foreign Currency is also challenging to manage for bank accounts.  For example, I have a US Dollar bank account which I spend from when I travel to the US.  Imagine for our example, my US bank account has $1,000 in it, and I want the account to be a 'budget' account in YNAB.  In order to work with my already established Canadian budget, I have to tweak the balance as an estimate, and then all expenditures too.


New Method for Handling Credit


YNAB has a newer method for handling spending from credit cards.  Since I started using the software before this change, I cannot wrap my head around their new method.  For example, when adding a 'budget' account to YNAB, YNAB asks you to select the type of account being added.



So, when adding something like a credit card, and then selecting 'credit card' as the account type - this is telling YNAB how to handle spending from that account.  When 'credit card' as type is selected, YNAB removes available funds from the category you spent from, and adds the same amount to your credit card payment.  I guess this is because while you spent in one area, you still need available funds to pay the new debt incurred as a result of using a credit card.


Here's where I get confused…when playing around with this feature for the sake of the example, I entered that I spent $20 for groceries using my Visa.  YNAB took $20 from my available grocery money and added $20 as available for the credit card payment.  That seems easy enough.


However, YNAB is showing that I have $170 available for my credit card payment, while the card actually has $601 owing.  I just can't seem to understand this feature.


In order to work around this feature, I add my credit card accounts and mark them as 'checking' for type.  So long as I spend within the parameters of my budget, there will be money available to pay the balance.


As I mentioned previously, I think it's good practice to log a 'scheduled transaction' into YNAB which acts as a bi-weekly reminder to pay the balance on your credit card(s).


Scheduled Transactions Helpful as Bill Reminders, but only IF/When you Log Into YNAB


Since I’m a YNAB fanatic, I log in way more regularly then I need to, but for those who check less regularly, missing bill reminders (also called scheduled transactions) is very possible. 


It would be much better to have the ability to add email or text notification of these reminders.


Of course, setting up your bills to be auto-paid can be a good strategy to avoid incurring any late fees.


In summary, YNAB is an incredibly powerful financial tool - well worth the expense - saving you the subscription cost and then some year by year.  It can be challenging to navigate at first, but by reading and watching the resources available to learn it, it becomes second nature.


I hope this review has been helpful to you.  Happy Budgeting.