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YNAB Vs Excel: My Budgeting Revisited

YNAB vs Excel: my budgeting revisited

Post Series: Budgeting

Last Updated on: by

The aptly named budgeting tool YNAB, short for You Need A Budget, stopped supporting their legacy tool YNAB4 as of 31 October 2019. I’ve been an avid user of the tool for over 7 years, but, because of the end of their extended support, I’ve been meaning to see if a change is needed. As a result of the end of support, I decided to see if I should move away from it completely or stay. It took up till now since I wasn’t sure what to do. Move to the new YNAB, and pay a subscription fee -the horror!- or move to good old Excel spreadsheet.

As a retail customer, this lack of support shouldn’t really hinder the use of YNAB4 till Windows for some reason changes in such a way that it breaks YNAB4 (highly unlikely!). No, the real issue for me was the lack of new features. It might seem strange given a budgeting tool shouldn’t be that complicated but bare with me.

YNAB4 vs new YNAB (nYNAB) features

When nYNAB came out, they actually made a transition guide in which they explain the differences between the old YNAB4 and the new tool. While some of these features are less interesting, there are some things that I was interested in.

My top changes

  • Goals: This is a big one. It takes a lot of work out of my head and puts it in the software, making it easier to actually budget. It helps to budget forward, instead of using it as an after-the-fact tool to spending that was already done. It helps visualize and monitor your progress.
  • Improved credit card payments: Another change that I find positive. There is now a dedicated Credit Card Payment section automatically added when you add a card. Thanks to this, whenever you purchase something using your credit card, the budgeted amount automatically moves from the selected category to your credit card outflow. On top of that, the money stream is clearly visible on the right side of your budgeting screen.
  • No longer being able to budget 3 months at a time: This a downside to the new tool I should mention. This one is actually a big negative for me. I enjoyed being able to plan ahead multiple months. My Income is relatively stable and using future planning I had a clear picture of what was going where. That isn’t possible anymore! It’s understandable since YNAB is a zero-sum game and you can only budget you currently have.
    Additionally, linked to this is future transactions. The amount will not be automatically deducted from your budget if you add them. They are no in a greyed out part of your expenses. They will not be reflected in your budget and thus your remaining money.
  • Reports: These largely stayed the same though, from my point-of-view, are now less useful. It has all become a bit less clear. YNAB4 had a very useful trend view. You can see the difference below. It also is really basic in the end (especially compared to the absolute freedom Excel provides).
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Old hover tool tip in trends overview of YNAB4New hover tool tip in trends overview of nYNAB

The following features or changes are what I would consider as nice to have but not what did it for me.

Other notable changes

  • Better syncing: By moving away from dedicated software to an online tool. No dependency on Dropbox and no cross-platform compatibility issues. Though there could now be cross-browser issues -looking at you Internet Explorer!- when implementing new features.
  • Direct Import: Not really useful for Europeans since only recently with the introduction of PSD2, will other non-banking software be able to retrieve banking data.
  • Use of colors: This helps see at a glance if a category is funded or underfunded: It’s a nice extra and it helps visually see at a glance where you need to pay attention to.

To Excel or not to Excel

After checking the new features I still had a mixed feeling about it. Sure, there were improvements, but were they worth the subscription model? Let us be honest, they do this get a more stable income stream instead of having to continuously find new users. So, next was to look at my main alternatives. I checked the likes of:

  • TillerHQ
  • Mint
  • EveryDollar

However, none were really what I was looking for:

  • A clean, no-nonsense interface
  • Small to no learning curve
  • No ads
  • Not purely US-focused

Given all of the above -and a bit of bias- I didn’t go with any of the other tools. With none of them catching my attention, I decided to try good old Excel as an alternative.

Example of excel spreadsheet for budgeting
An example of a relatively simple and straight forward spreadsheet to keep track of income, expenses, assets and liabilities.

(Excel) spreadsheet galore

I downloaded and used numerous pre-made (basic) sheets. There are a ton out there so I figured one should work for me, right? Well…

They “worked”, but the main thing that hindered me was that it was cumbersome. Having to write and tweak your own sheet might seem fun for others, but, at least at the moment, it is something I’m struggling with. It gives me a feeling of dread instead of enjoyment. While this feeling isn’t helping me looking at the  Excel as a viable option, it’s clear there are benefits.

Freedom!

The benefits are known of course. You can change the spreadsheet however you want, add or remove specific formulas, etc. You are not bound by the schedule of a third party. If you feel the need to change something you can. You can take this in the broader sense as well. YNAB might not have the features you want or the features don’t work as you expect. Just go to YNAB’s support forum to look at recent examples of this. In Excel you can easily add your assets such as investments and property but also your liabilities. Additionally, you don’t spend Over 70 EUR per year on a tool to help you save money.

Basically, with excel you have complete freedom. This can be a problem of course. It’s one of the main reasons I’m still leaning towards YNAB. There are quite some limitations of Excel.

Collaboration

Tracking accounts in my new YNAB app
This an overview of my tracking accounts. These accounts can be investment accounts but also a mortgage.

When talking about limitations it can be good to compare to YNAB. It takes most of the work of your hands allowing you to purely focus on budgeting. It saves time and energy. It’s a system that doesn’t need maintenance and it’s constantly improving. It provides a better, more efficient interface than Excel.

Think about the following: your partner might want to pitch in from time to time, or sooner or later the person managing the budget will change. If that happens it’s much easier to help them be engaged from the beginning thanks to a dedicated budgeting tool. You might actually keep a true budget instead of a ledger.

Reviewing Your (shared) transactions and resolving any discrepancies, aka budget reconciliation, is also very simple. YNAB walks you through the process of reconciling your account. When you roll your own spreadsheet, it’s surprisingly complex to allow for cleared and uncleared transactions.

My decision

All things considered, I don’t need budgeting that much, and while the nYNAB features are cool, they don’t tip the scale a whole lot in favor of nYNAB, but it is tipped towards it. For me, it’s all about having a place to keep a clean record of my income and expenses as well as my assets and liabilities. The interface of YNAB provides that clean tracking. Even as I’m fighting towards FIRE I can use this app to track my different portfolios.

For these reasons, I got the subscription of YNAB. Before subscribing I checked out their cancellation policy to see what was possible if I decided to focus on my own excel spreadsheet after all. I’m happy that they have a “Don’t Pay for Stuff You Won’t Use policy” (“Cancellation,” 2019). This will allow me to switch once I have set my mind to put some time and effort into a spreadsheet.

Worth it?

Finally, would I recommend others to go for nYNAB? Is YNAB worth your 80 dollars a year? Even after evaluating everything I’m reluctant to say I would absolutely recommend nYNAB over Excel.

  • You already have your things in order budget-wise? A simple Excel could be all you need and there are a plethora of excellent templates available.
  • Are you struggling and living paycheck to paycheck? Definitely give nYNAB a try; there is a 34-day free trial.

So, I’m sticking with the new YNAB, for now. But what about you? Do you use a specific budgeting app? Or are you an Excel wizard that knows everything there is to know about budgeting with an Excel or google spreadsheet?

Share your experience in the comments below!

Sources:

Mr. FightToFIRE
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