There’s never a bad time to think about budgeting your money, but one could argue that stock market slump weeks and A recession worries renew best time That’s where we are this week. So let’s talk about the budget.
A few months ago, I stumbled upon an app called YNAB. The name means You Need a Budget, and It is very popular With a specific set of personal finance enthusiasts on Reddit.
With over 190,000 members, YNAB subreddit In the top 1 percent of popular subreddits – this one Almost as popular, for example, as the surfing subreddit. It’s not just Reddit, either. YNAB has 581,000 followers on TikTok208,000 followers on Instagramand 141,000 subscribers on YouTube. All this for a budget Appin mind
So I downloaded YNAB with high hopes. It took quite a while to go through the complicated setup, which involved linking my bank accounts and starting to allocate money for absolutely every expense in my life, from rent to diapers. Then I realized that, after the 34-day free trial, the app costs money.
Starting August 1, YNAB even raised its price from $99 a year to $109. Many of those are hundreds of thousands of personal finance enthusiasts Not happy with this change, by the way. Some say they’re going back to Excel, which I’ve been doing for years. Still, that’s a lot of people who are excited about personal finance.
“What a great place to be,” Scott Ward, senior vice president and resource advisor for compound planning, told me. “We’ve gone from an environment where people want to think about budgets, use spreadsheets, and now have an active interest in seeing their money work for them every day.”
The idea of connecting your bank account to an app that tells you how much you should be spending and saving has actually been around for decades. Mint, a free budgeting website and app, went mainstream as its popularity grew. Closed earlier this year Its new owner is by Credit Karma. And when Mint shut down in March, millions of users scrambled for a better replacement.
Although YNAB is not free, it is One of several apps That is filling the void. All of these can track your spending, automate your savings, and generally make you feel better about your financial health. Most of them cost money, while you can create a spreadsheet in Google Drive for free.
Budgeting is inevitably a very personal thing. If you have none at all, the best budget for you is any budget. Inflation has eased but not abated. The economy is feeling A little shaky At the moment, though, it is Technically very strong. And like I said before, there’s never a bad time to pay attention to your finances.
So, you need a budget.
Many of these apps usually have a budget philosophy behind them that has been around for over 50 years. it is is called zero-based budgeting. developed By Peter Pyhr When he was a young accountant at Texas Instruments in the early 1970s, the method instructed you to start your budget from scratch or “zero base” each month and set an objective for each dollar. of course Spend in your budget. This means accounting for recurring expenses like rent and bills as well as essentials like housing and groceries. This leaves room in the budget for long-term goals like saving and paying off debt.
The system is designed to be dynamic because not every month of the year is the same. If you have heard “Envelope System,” It’s the same idea as when you set aside cash for each expense at the beginning of the month. Other systems included The 50/30/20 rulewhich was popularized by the progressive Massachusetts Senator Elizabeth Warren, and “Pay yourself first” method, which focuses on building a retirement or emergency fund. My own budget spreadsheet ended up being based on the zero-base budgeting technique, even though I didn’t know what that technique was when I created it for myself a few years ago. The method is just that intuitive.
YNAB also started as a spreadsheet. In 2004, an accounting grad student named Jesse Mecum Created the first version of the spreadsheet Before launching the first YNAB mobile app in 2015, to track her family’s finances and, with the help of a developer, a desktop app a few years later.
Meacham pushed these four rules from the start: put every dollar to work, embrace real spending, roll with the punches, and age your money. The first three are fairly self-explanatory. Lasting Your Money Aging, however, is designed to help you get out of a paycheck-to-paycheck lifestyle and delay the time you receive your money when you actually spend it. In other words, the longer you hold onto your money and avoid spending like emergencies, the more likely you are to make wiser decisions. Having more money around will also give you a bit of a cushion.
“I want people to take the fear out of the money conversation,” YNAB CEO Todd Curtis said in an interview. “We all spend and imagine if you can do it with confidence. Imagine if you could do it without second guessing. Imagine being able to talk about it with your partner without any real fear of walking into that conversation.”
People over the years Obsessed with this system. Idol YNAB Not the only app Pushing towards a zero-based budgeting approach. Monarch money is a popular option Which automatically categorizes your expenses, tracks your investments and gives family members access to the budget. (YNAB Family Access has its own version.) Monarch Money also costs $100 a year. PocketGuard is a beginner-friendly app which provides some zero-based budgeting features. There is a free tier with limited functionality or a premium version for $75 a year Copilot uses artificial intelligence Categorize expenses and create a customized budget for you. So it’s like a robotic zero-based budgeting system and costs $95 a year.
If you’re not sure if the zero-based budgeting method is for you, these recommendations for more budgeting apps offer a variety of different methods. here, hereAnd here.
But you don’t want to pay for the budget. what now
Managing your money with a good app costs money. That comes with some benefits. You’re paying for something that’s easier to use than a free Google Drive spreadsheet, and you’re paying for the convenience of syncing your bank accounts with the app along with all your transactions instead of adding up each expense manually. You’re also paying for security, so hackers can’t get their hands on your financial information.
However, if you’re using a free budgeting tool, there’s a chance the company making it is selling your data to data brokers. (Here A great rundown (How privacy and security work in these apps and what to look out for.)
But sometimes the most compelling free alternative is the trusty spreadsheet. After all, if one of the top budgeting apps started out as a spreadsheet, why not go back to basics?
A surprising fact:
The internet is full of all kinds of budgeting apps. If paying for a budgeting app isn’t for you and you don’t want to put your personal financial data into a free app, you can always import a free budget spreadsheet. John Wittwer, founder of the Excel template library Vertex42, offers this roadmap for starting from scratch. It’s surprisingly simple:
- Start by tracking your spending with This is a simple spreadsheet.
- use A check register or An account register Keep track of transactions.
- Create a spending plan with it Personal budget spreadsheet.
- Try to make every dollar count This zero-based budgeting worksheet.
- When you’re ready, put everything away A master money management template.
If you DIY your budget, Bonus is a system that fits your needs even better than the best and most expensive apps. The disadvantage is that it can become a huge time suck. trust me I’ve resorted to tracking everything in my own Google Drive spreadsheet and it’s practically turned into a hobby. My spreadsheet isn’t particularly complicated, but it’s highly customized to my particular situation. When my wife and I got married and combined finances, it underwent a major overhaul, and it happened again when we had a baby.
But along the way, I’m paying close attention on a weekly if not daily basis. It’s almost like a problem I can never solve, but the process of simply trying — adding transactions here, reallocating funds there — calms me down. The time I spend on my clunky spreadsheet relieves some of my worries about family finances. It’s still time I’m not doing another job.
“The main disadvantage of most budgeting and money management spreadsheets is that they don’t automatically import transactions from bank accounts,” says John Wittwer, founder of Vertex42, which offers a wide range of free spreadsheet templates. “Import transactions are the number one reason why I still use an app for my own finances.” Wittwer added that he still uses a combination of apps and spreadsheets to manage his business.
If you decide to build your own system, you are not completely alone. Much like its budgeting app counterpart, The Budget Spreadsheet community is active And always coming With innovation This is the tried and tested way to track your expenses.
Completely free options exist, and they’re so ubiquitous, that the only real challenge is finding one that fits your needs. Google And Microsoft They have their own library of free budget spreadsheets that are simple yet customizable. I have also used Free Excel Templates from Vertex42 And would recommend them for their sophistication and $0 price.
As I said before, though, budgeting is a very personal endeavor. Spreadsheets can be a lonely subject, where you might not know who to ask if you’re looking for a better way to do something. Apps are great, as long as you’re willing to pay a fee, and they can offer some community.
Curtis, YNAB’s CEO, told me, “With YNAB, you can turn to that community and say, ‘Hey, this happened to me. I’m in this moment. What can I do?’ And you have millions of people out there who can help you with this question, because they’ve been there before you.”
A version of this story also appeared in the Vox Technology Newsletter.Register hereSo you don’t miss the next one!
