Two Budgeting Winners

In my post titled Mvelopes and YNAB, I talked about two of the budgeting systems that FMF readers seem to enjoy. There were many comments on the post in favor of both of these options, and I thought I'd share some of them with you today. First, here are some testimonials for You Need a Budget:

Comment #1

I have been using YNAB and I love it. I used it about 2 years ago for a few months and saved a ton of money. Then I got away from it for a while and got back into my old spending habits. Now I am back using the software and it is great.

They just added a new feature that allows you to run your budget AND balance your checking account. The software is very visual, helping you see that a reduction in spending in one category can lead to larger savings or a larger credit card payment.

The idea of creating a one month buffer is one of the most intuitive, yet simple personal finance ideas I have ever seen. It instantly breaks the paycheck to paycheck cycle and gets you thinking ahead.

Comment #2

YNAB has been great. The 4 money rules that the software supports are the key to making it work and in some ways are more valuable than the software. I no longer live paycheck to paycheck, I've paid all my credit card debt, and big, unexpected bills are no longer a problem. Support for the product is great, especially the forums and all of the updates have been free so far. It's not as comprehensive as Quicken so I still use Quicken to track my net worth and investments but it's the best way to organize and track cash flow that I've found.

Comment #3

My wife and I absolutely LOVE YNAB. It has been one of the best things for our marriage. We do not argue about money and never have to worry about whether there is enough cash in the bank to write a check. It has also helped us pay off a lot of our school debt and establish some savings as well. I would recommend YNAB to anyone. The only catch is, you have to use it and actually record every single transaction, otherwise it does you no good.

Now for some thoughts on Mvelopes Personal.

Comment #1

We've been using Mvelopes (now called Finicity's Money Manager) for nearly 3 years and I love it. My husband is a spender and I couldn't plan for expenses - if there was money in the checking account, we had money to spend and spend we did. Then, when the annual insurance bill came, we'd have to drain savings to pay it. We often overdrew our account because one didn't know what the other had spent. The credit card bills were out of control.

No more. Now we don't rely on the balance in the checking account, but the balance in the envelope you want to spend from. Non-monthly bills are saved up for in advance so there's no surprise in February when the disability insurance bill shows up.

We've saved hundreds of dollars in overdraft account charges and even more in credit card interest charges (our one card is now paid off monthly). We don't fight about money anymore.

I highly recommend this product to anyone who is visual. I also like Crown Financial's software, which is also an envelope-based budgeting system.

Comment #2

I used Mvelopes for about a year and really liked it. It hammered home for me the point that if you overspend in one area, you have to take that money away from another area in order to balance out. For some reason that had escaped me - I always looked at my cash flow as continuous instead of monthly, so it was "never ending" rather than a set number. Once I had to physically "move" the money from, say, Groceries to cover my Entertainment, I saw why I had always been playing catch up and kept having to push bills out to "the next paycheck". After about a year I had learned enough to do my budget myself on an Excel spreadsheet.

Actually, the best benefit from the MVelopes program was that I bought the workbook and book that came with it called "Money For Life", they were written by Stephen B. Smith and really worked for me.

Of course, there were some people that didn't like one service or the other, but most seemed to be positive on at least one of these. Since we're nearing the end of "budgeting season" (people who make budgets for the year mostly do so in the first couple of months of a new year), I thought I'd highlight both of these good options in case you haven't yet taken the budgeting plunge.

Personally, we use Quicken for almost everything, though we use a homemade spreadsheet for budgeting (when we do a budget, that is.)

Comments

[Angie]

I'm trying to have my fiance take over the budgeting duties so I'm trying to simplify my system. I've looked into both of these and there are issues with both that I can't get over.

YNAB - Need to manually import transactions. I don't have time for that. Also the can't go negative in the envelopes does not seem normal. I don't want to switch around my budget monthly.

Mvelopes - Been trying for 2 days to connect to my ING and just times out. Not very obvious user friendly interface.

Anyone know of software that has the following?
- Automatically pulls transactions (and doesnt' freeze up!)
- Uses envelope system where you can go negative
- User friendly interface, colors
- Customizable daily or weekly emails with updates, or limit status on envelopes.

If only I was a software designer!