–> Getting started with You Need A Budget (YNAB)
–> YNAB costs
–> How to open an account with YNAB
–> Getting started with Mint
–> Which is better, YNAB or Mint?
Not so long ago, most people worked out their household budget in their head or, if they were careful planners, with a pencil and a piece of paper. But as we know, one unusually large or unexpected bill or last-minute spending on an impromptu shopping spree can throw our calculations out the window. Some people can do the mental math and manual calculations just fine, but there are now websites that help you manage your money.
There are several platforms for budgeting software available that you can use to help you with your budgeting, but we will look at two well-known ones: YNAB vs Mint.
Getting Started With You Need a Budget (YNAB)
Let’s start with YNAB. The company’s goal is to teach you how to budget and, even more importantly, to stick to your budget.
The philosophy behind YNAB is that your budget is much more important than your account balance or the money you have hidden under the mattress. Your task is to monitor your budget and to stick to it. If, say, it is the middle of the month, and your budget for groceries shows a balance of $50.00, you should not buy foie gras and a bottle of good French wine for dinner.
When you first start using YNAB, you will probably find that you have to shuffle money from one budget category to another. This happens as you get used to the idea of budgeting. Your budget allocations will quickly become more reliable as you gain experience.
YNAB’s Four Rules
YNAB sums up its philosophy in four rules:
Give Every Dollar a Job
You should allocate every dollar you have to a budget category. This gives you control over all your money.
Embrace Your True Expenses
You probably don’t spend a fixed sum every month on, for example, auto maintenance. But when the mechanic gives you a bill, it can come as a shock. You should get into the habit of allocating a sum each month to meet these expenses.
If you do, these bills don’t come as such a shock.
Roll With The Punches
Your financial circumstances will change, and so will your plans. Move funds from one category to another that you’ve overspent.
Age Your Money
Your objective is to reach a position where you are using money that is 30 days old. The savings you make with careful budgeting will help you to achieve this, and, hopefully, you will be in surplus when your next paycheck arrives. This will probably take some time to achieve.
How Much Does YNAB Cost Per Month?
YNAB offers two payment options. You can pay $11.99 monthly or $84,00 annually. Clearly, the annual fee offers a considerable saving. You can cancel at any time, but YNAB hopes that you will find their platform so useful that you will be happy to pay the fees. (Don’t forget to allocate this expense in your budget.)
New users are offered a free trial period of 34 days. This might seem to be an unusual period, but it is logical. This length of time ensures that no matter when you start your account, you will pass from one month to the next and see how the budgeting software platform works over a full budgeting period.
As most people are paid monthly, YNAB (and all the other platforms of this type) work on a month-by-month basis.
Opening a YNAB Account
YNAB’s opening screen lists Immediate Obligations or things you’d want to take sweet, budgeting action on:
- Interest and Fees
These are what the service assumes are your regular expenses, the ones that you face every month. Below Immediate Obligations, there is a second section named True Expenses. True Expenses lists:
- Auto Maintenance
- Home Maintenance
- Renter’s/Home Insurance
To the right of these are three columns headed, from left to right: Budgeted, Activity, Available. Finally, on the far right of the opening screen, a panel shows you the current status of your budget.
All of the above categories have a box next to them that displays the relevant dollar total. When you first open the app, the total in each of these boxes shows $0.00. This is because you have not yet linked a bank account to YNAB.
Adding a Bank Account
To the left of your computer or smartphone screen, you’ll see an Add Account tab. Click on this, and you can link one or all of your checking accounts, credit card accounts, or savings accounts. You have two options for managing your current balance. You can keep it updated yourself or link your accounts automatically. The second option we mentioned will save you a lot of work.
Once you have linked your account(s), a dollar amount appears on the screen under the heading To Be Budgeted. This total is the money that you have available.
Working on the assumption that you can only use the money you have, your goal is to allocate this money to your expenses. The YNAB website has information to help guide you through the process.
YNAB vs Mint: How Much Money Will I save?
YNAB’s website claims that new users will save an average of some $600 in their first two months and will go on to save over $6,000 a year. User reviews tend to confirm these figures. Needless to say, to achieve these savings, you will need to strictly follow your budget and resist the urge to splurge on impulse purchases.
Getting Started With Mint
The Mint app is as well-functioning as YNAB. However, one major potential inconvenience is the in-app advertisements. Ads are its main source of income—besides Premium Account subscriptions. Mint will also refer you to other financial service institutions. These other entities will try to sell their services to Mint users.
Opening a Mint Account
We don’t have to spend much time covering setting up your Mint account because the process is very similar to YNAB. Register your email address and provide a secure password. Then link your bank or saving accounts to Mint.
Making a Budget on Mint
Once you have set up your account, Mint provides you with a sample budget. This is just to give you a general idea—you will want to create your own. Click on Create A Budget. A drop-down menu appears from which you choose income and expenses categories. You also choose if an expense occurs every month, every few months, or just once.
An interesting feature of Mint is that it shows you how your spending compares to the US average. You might or might not find this useful.
How Much Does Mint Cost?
Mint is free to download, and there are no subscription fees for the basic application. Mint does have a premium service that it charges for, but you won’t need this for day-to-day budgeting.
How Much Money Will Mint Save Me?
Some users report savings in line with those you can make with YNAB.
Which is Better? YNAB or Mint?
There are several similarities between the two apps, but they have a different focus. YNAB is really about changing the way that you think about your money. As their website says:
“What really makes You Need A Budget different is that we can teach you how to manage your money and get ahead-for good. What if your bills rolled in, and instead of piling up, you just paid them? No sweat. What if you didn’t even realize it was payday because you had money in the bank and weren’t desperate for that check to arrive? Forget everything you think you know about budgeting and prepare to experience total control.“
The idiomatic language, the use of italics, and a sentence in bold type lend themselves to the style of a personal trainer. And this is exactly what YNAB is trying to be. YNAB is the personal finance equivalent of the trainer that makes you do the extra ten minutes on the running machine.
No one really needs a personal trainer to do exercise, but having one and paying a fee encourages you to commit yourself. It is the same with YNAB. You are paying them to make you work on your money rather than your body.
One client who is quoted on the YNAB website states, “When I started using YNAB, the heavens opened, and angels sang! Seriously, it was so simple! It really clicked with me.”
Many reviewers state that the personal finance platform is easy to use and quickly becomes a habit. YNAB is in the business of creating converts who won’t mind paying the fee.
Mint’s website is soberer:
“We help you stay on top of your accounts, bills, and subscriptions. Get notified when your subscription costs increase and when bills are due.”
If YNAB’s budgeting software is a combination of a personal trainer, running machine, and you, Mint is simply you and the running machine. You can use Mint just as you use YNAB to monitor your income and expenses but with Mint, what you do with this information is up to you.
The treadmill is in your spare room, but are you going to use it?
The big difference is that YNAB is proactive, Mint is good at tracking your expenses and income. Which is better is a matter of personal choice. If you need a trainer, then YNAB is for you. If you prefer to go it alone, then Mint will work well.
Why Is YNAB Different?
The obvious difference between YNAB and Mint is the approach, as discussed above, but there are other differences.
YNAB uses an approach called zero-based budgeting. With this approach, you allocate every dollar of your income to an expense category and can assign any surplus to meet future expenses or into a savings scheme. This is known as the envelope method. It is as if you were putting your grocery money in one envelope and transporting money in another.
Mint also uses the envelope method, but it suggests a budget that follows your spending history. This does not help you to gain control over your expenses, as it is merely telling you what you have done – you have to look for expenses that you can cut down on.
Website And App
YNAB’s app lets you see reports on your spending. You can’t (currently) do this on the Mint app. You need to visit their website for this information. Both platforms have websites and apps for Android, Apple Watch, iPad, and iPhone.
YNAB charges for its basic service and Mint does not.
YNAB vs Mint: Focus On The Future
YNAB is trying to change your future spending habits. Little by little, you will find yourself following the budget that you have allocated. Each month that you succeed in keeping an expense within your budgeted allocation will feel like a victory. You will learn that the money you just spent on ice cream was an unnecessary expense. Trivial savings mount up and soon you will see a surplus that will let you treat yourself.
How YNAB Helps Your Financial Future
For YNAB, the future begins today. That is why they insist that you budget only with the money you have available now. You cannot rely on future income to cover current needs. You budget your present resources and gradually build a surplus to shift from one expense category to another.
How Mint Helps Your Financial Future
In comparison, Mint, with its emphasis on tracking, can seem retroactive. In many ways, this difference is psychological. But that is precisely where the big difference lies.
YNAB’s YouTube Channel
YNAB’s YouTube channel has over 90,000 subscribers. YNAB constantly updates the available videos. Amongst the ones currently listed are:
- Fun Money with Ben & Kelly! – Kids and Money
- 3 Ways to Organize a Budget
- YNAB For Beginners – Quick Start
- Budgeting vs. Expense Tracking
This last may be a sly dig at the competition. The content of these videos is engaging and informative. I particularly like the ‘Kids and Money’ one as it underlines the importance of teaching young people how to handle their finances.
Other Budgeting Apps
YNAB and Mint both have consistently good reviews. However, there are other financial apps available. You might want to look into:
- Personal Capital
All of these finance apps work similarly to Mint.
YNAB vs Mint: Is YNAB Worth The Price?
As mentioned above, YNAB costs $11.99 a month or $84.00 for an annual plan. As there are free alternatives on the market you will wonder if it is worth paying their fee. The answer depends on the type of person you are. Some people have great willpower and are comfortable acting independently. Such people probably don’t need a budget planning app. They know how much money they have and how they are going to spend it. Such people have often saved for a rainy day and can meet any unforeseen expense.
“Livable Wage” is a Dying Concept
For many people, the world is a more complicated place. We may remember a time when everything seemed more simple. The factory hand came home with his wage packet, gave most of it to his wife for household expenses, and kept a little for beer and tobacco. If Sally needed new shoes, then her sister had a pair that would fit.
I don’t know if this Norman Rockwell world ever really existed. Certainly, the financial world is more complicated than it was. With the ready availability of credit in its various forms, many people have discovered that their income is under pressure. What may seem a healthy salary does not seem to go far when you consider all your expenses.
You have bought a car in installments, and it needs fixing. You have to pay the mortgage next week. Your son needs to go to the dentist—all of these on top of the regular bills. A sudden, unexpected expense can cause chaos.
You might find that you can’t balance all of these demands with a pen and a piece of paper. One of your regular expenses is your internet connection, so, why not use it to download a budgeting app to help you balance the books?
Why Pay If I Can Get The Same Thing For Free?
The answer is that you can’t get the same thing. Thinking of YNAB vs Mint, for example, can be a great help in monitoring your expenses. However, when you think about it, Mint, and other budgeting apps, are really only more sophisticated versions of a pencil and a piece of paper. They are tracking what you have done and not helping you to plan better for the future.
YNAB is trying to get you to think about your budget. The most important of the four YNAB rules mentioned above is: ‘Give Every Dollar A Job.’ Some of these dollars will have the job of paying YNAB, but the others will be put to work on other aspects of your budget. It is important to emphasize that you are doing the work but YNAB is working with you to change your mindset and spending habits. You may think a family holiday is a necessity. Fine, it is an opportunity to relax together. But do you need to rent a condo in Florida? Why not go camping, or visit Aunt Maud in Colorado?
Some users say that YNAB becomes addictive and most report that they make real savings. Of course, you don’t want to get the reputation of being a skinflint. You can take the children to the movies, but buy their jeans at an outlet or wait for the sales.
YNAB is a great tool for those who are willing to work with it.
Mint vs YNAB: Teaching Children About Money
Children don’t learn much about managing their finances in their schools and some parents are reluctant to talk about financial matters with their kids. A child can leave school knowing a lot more about calculus than about personal finance. This is a pity because the sooner you learn how to manage your money the better. It is, after all, an essential skill.
YNAB produces some YouTube videos aimed at educating children but there are apps specifically for young people. For young children there are, for example:
- Allowance+. Free or $0.99 a month
- PiggyBot. Free
- Rooster- Free for the basic version
- Bankaroo. The basic version is free
- BusyKid. Free
- gohenry $3.99 a month
Children will find that these apps are easy and fun to use. They will help to make children more aware of the value of money and help them learn lessons that will serve them well as they get older.
Wrapping up YNAB vs Mint
Households are under tremendous financial pressure. There are constant demands that people buy this or that product or service. Some people find that they have taken on too much debt, or their circumstances have changed.
As more and more banking services move online, it is difficult to maintain a friendly and sympathetic relationship with a representative of your bank who can help you when household budgets become strained. If you don’t take prompt action, before you know it, you have problems.
YNAB vs Mint: What They Can’t Do
Downloading one of the many finance apps can help. However, if you simply don’t have enough money to meet unavoidable expenses, no amount of budgeting is going to conjure up money that simply isn’t there.
YNAB cannot find money that you do not have—neither can Mint. But these two personal finance apps can help you change the way you think about your financial situation. It is better, of course, to begin before you get into difficulties and learn to budget as early as possible. No budgeting app is a magic wand.
Still, in my personal opinion of YNAB vs Mint, YNAB sits as the Noom of budgeting apps. It has the potential to change the most about your financial situation. With its strong emphasis on forming new habits and thinking hard about your financial situation, YNAB can be an enormous help.