By embracing your true expenses, you’ll set aside money every month for the “surprises” like car maintenance, holiday shopping, and more.īy breaking these lumpy expenses into manageable monthly chunks, it’s much easier to stay ahead of your spending. Sinking funds are used to set money aside for future expenses – even those you might think are surprises. 2) Embrace Your True Expensesĭoes it ever feel like you’re facing a surprise expense every month? I used to feel that way, too, until I started using YNAB and learned about something called sinking funds. Rather than stressing about your money, you’re simply executing your plan when you follow your budget. No matter how you’re allocating your money, the key is to prioritize where it goes, and YNAB helps you do that.Īnd this approach results in a psychological impact too. In YNAB, when you receive that $2,000, you might allocate $1,000 to housing/utilities, $500 to food, $250 to insurance, and $250 to your savings goals. Let’s say your income is $2,000 per month. Because you allocate every one of your dollars to a specific purchase, you’re in charge of what your money does – not the other way around. 1) Give Ever Dollar a Jobįirst, YNAB allows you to prioritize what you do with your money. The YNAB ecosystem is built around four unique rules to help you budget your money more effectively. Using a proactive approach to budgeting, you’re much more likely to meet your goals than if you just use budgeting to document what’s already happened. It does this by helping you allocate all of your income to spending and saving categories, which allows you to manage your financial priorities.
YNAB encourages a proactive approach to budgeting versus a reactive approach taken by other apps. What sets YNAB apart from other budgeting services is its use of zero-based budgeting principles. One of the most popular services is the budgeting behemoth YNAB.
There are lots of budgeting services from which to choose. YNAB vs Personal Capital: Which is Best for You? YNAB Overview
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