We’ve been using YNAB for a long time. It was with us through nearly our entire debt-free journey. YNAB 4 was a part of how we handled money in our family and we weren’t ready to part ways when the new online YNAB came along.
YNAB (the company) understood that parting would be hard so they let us keep using YNAB 4 indefinitely. We took them up on that for exactly 3 years! Now we’re making the switch to the new YNAB.
First I’ll explain our reasons for switching and our reasons for dragging our feet so long. Then I’ll share a hack for the new YNAB that helps preserve my favorite YNAB 4 feature.
Why we finally switched from YNAB 4 to the new YNAB
Let me start by saying the decision wasn’t an easy one. But I was thinking of YOU. Yes, we made the switch in large part to conform to the modern budgeting world.
When Six Figures Under was new, I shared YNAB budgeting tutorials filled with screenshots of our actual budget. As time went on I made videos sharing the screen of our actual budget.
This was all well and good when YNAB 4 was around. Readers like you could see how we actually budget, and get a peek inside how YNAB really works and how we use it. Hundreds of you who tried it out back then with a month-long free trialdecided that YNAB 4 would be a good fit for you. I still hear from many of you who became faithful YNABers from my recommendation!
Now that YNAB 4 is not generally available, it doesn’t work as well for me to share our budget with you. I feel like I’m taunting you with pictures of, say, the most delicious “Fancy Berry Pie”.
(Yes, I just made that up, but follow my analogy on this one.)
I share the failproof recipe with you. You’re so excited to make your own Fancy Berry Pie, and then I break it to you that you actually can no longer buy fancy berries anywhere. Sorry guys! My freezer may be full of fancy berries, but you can’t have any. How sad is that?
Well that’s pretty much what has happened with me and YNAB 4. I love to share practical budgeting tutorials using our actual budget, not just the amounts, but also the tips and tricks that make the budgeting tool itself so nice to use. For the last few years, unless you already had a copy of YNAB 4 (a freezer stocked with fancy berries), you couldn’t conveniently implement anything I was showing you!
Now, I could have invented a pencil and paper method, told you it was the bestest, and sold you a budget printable, but that’s not how I budget.
People ask me ALL THE TIME what I use for budgeting. Of course I still recommend YNAB to them, because, well, it’s still YNAB and the methodology is solid, but I’m not able to help people the way I used to.
So the #1 reason for switching to the new YNAB is to be on the same platform as YOU. While still using YNAB 4, you just had to drool over it (mmmm Fancy Berry Pie!) when I bashfully showed it off. With the new YNAB, if you’re not already YNABing, I can at least give you a way to check it out (hooray for a free 34-day trial!).
For full disclosure, if you subscribe to YNAB after clicking on my link and doing a free trial, then I’ll get a free month of YNAB too. But that’s not why I’m doing this. If that were the case I would have done this 3 years ago.
Let me tell you why this change has taken so long.
Why we were hesitant to change to the new YNAB
Some of the features that we loved about YNAB 4 changed in the new YNAB. That made us sad!
The main thing we missed was the month ahead feature. In YNAB 4, once you had a fully funded month-ahead buffer, you could send your paychecks from THIS month to NEXT month’s budget. That money would not be available to budget until the following month.
The new YNAB drops this feature in favor of “aging your money.” Instead of holding all of this month’s pay in a separate and discreet “container” all of your money blends together and “ages.” You can be “ahead” by budgeting out your expenses for future months with any “extra” that you have, but this is definitely not the same as what YNAB 4 does.
As we were paying off debt, we relied on the month ahead feature to budget every penny down to zero and maximize our debt repayment at the end of each month. (Spoiler: you’ll see some historic YNAB 4 images in both of those popular blog posts!)
After playing around with the new YNAB, I’ve come up with a hack to mimic this functionality that we adored in the old YNAB.
How I make the new YNAB budget income like YNAB 4
If you’re a visual or auditory learner, then watching the video below will be most helpful. Otherwise keep reading and I’ll do my best to explain it in words and pictures.
How it works in YNAB 4
In YNAB 4 when you enter income you choose either “Income for [current month]” or “Income for [next month].”
If you choose next month, that money moves over into the next month’s “available to budget” total. You can start allocating it to next month’s expenses right then, or you can wait until the 1st of the month.
Life is good. You budget one month at a time down to zero.
My hack for making it work in the new YNAB
Since adding income in the new YNAB just adds money to a timeless pool of “available-to-budget” money, I want to earmark money earned this month so that I can wait to spend it until next month.
I don’t want to leave next month’s money in the general “Available to Budget” balance because it is too easy to cheat (inadvertently or intentionally) when I’m moving money around to different categories throughout the month.
I don’t want to cheat myself out of next month’s money and lose my buffer. If you can’t appreciate the benefit of being a month ahead read my post about living on last month’s income.
To avoid this potential problem, I made a specific holding category for “income earned this month that I don’t want to spend until next month.”
When a paycheck arrives, I enter it as new income.
The amount immediately goes up to “To Be Budgeted” at the top of the budget.
I then budget that exact amount to my special holding category.
Throughout the month all of our paychecks builds up in this category.
At the end of the month when I’m ready to make the next month’s budget, I release the funds from the special holding category by changing the budgeted amount to zero. Now all of those funds are released to the “To Be Budgeted” total.
Now I budget the new month completely, until the “To Be Budgeted” amount is zero. Any new paychecks are treated as above (entered as income and budgeted to the special holding category).
Throughout the month if I overspend in a category, the “To Be Budgeted” amount goes into the red and I immediately pull budgeted funds from another category to cover the overspending without stealing from the future.
The sad part about this hack is that there is not a beautiful record left. In the old YNAB I could easily go back to any month and show you with one click the income that funded that month’s spending.
But it works and keeps us precisely one month ahead. Everything over our monthly expenses goes to funding our goals (currently paying off our mortgage).
Should YOU switch to the new YNAB?
To put it simply, “If it ain’t broke, don’t fix it!”
Just because I decided to switch doesn’t mean you need to. If you are using YNAB 4 and it’s working for you (it was working great for us!), then there’s no need to switch.
There are some perks with the new YNAB, like automatic syncing of accounts (though we opted to still enter our checking account and credit card manually so we can be aware of our spending) and setting goals for categories.
Like any subscription, though, it also has a fee. I believe it’s totally worth the cost (it will save you WAY more than you spend on it), but if you don’t have to pay for it, then you can save that money! If you already bought YNAB 4, you can keep using it forever without having to pay for it.
So it’s up to you! You can try the new YNAB and see how it compares, then decide for yourself!
If you want to try YNAB, be sure to do this
As you may have gathered, YNAB is a different from other budgeting methods. The YNAB methodology will teach you to manage your money differently than you’ve probably done in the past. The rules in YNAB are different enough to be startling to long-time budgeters but intuitive enough that you’ll end up thinking, “Why doesn’t everyone do it this way?”
Because it’s different, it’s crucial that you check out their free classes during your trial so that you can learn HOW to use YNAB. This isn’t the kind of thing where you just throw away the instructions and wing it. If you try that, you will probably not have a good experience.
So go grab your free YNAB trial and then sign up for their free classes and learn how to use this powerful, finance-altering tool. You’ll be so glad you did!
Oh, and if you have questions about how WE use YNAB that you’d like us to address in future posts or videos, just let me know. Now that I don’t have to feel guilty for showing you mouth-watering pie made with fancy berries that are no longer for sale, I can start sharing the technical side of budgeting again!
Don’t worry, I’ll still keep showing the personal side too. This is, after all, personal finance made public!
How about you?
- Do you use YNAB? Which version?
- If you’ve used both versions, I would love to hear your comparison and what you love or hate.
I do not like the at YNAB does not allow you to carry over negative balances. Do you have any hacks for that? It is for balances that will be paid back soon and I want to carry forward what is still owed. I read you used to be able to do that but they took it away. I’m not having much luck finding anything for this. I like your hack on saving your paycheck for next month.
I too am using YNAB4 and about to try out YNAB web version. Is there a book that explains the web version. I have migrated YNAB4 to the web version and at first glimpse it doesnt make sense to me.
I also use all my income this month for next months budget. Which is easy on YNAB4
I don’t know that there is a book, but YNAB is pretty good at making tutorials for using their software and app. It takes some getting used to as anything new does. I bet you’ll get the hang of it after playing around with it for a bit.
Thank you for this excellent tutorial and hack! I’m late to the party as I wasn’t keeping track of what YNAB was doing. I’m still using YNAB4, and just had to load it onto my new Windows 10 laptop (finally migrating from Windows 7… old habits die hard). I was worried, but I connected it to the synced budget file in Dropbox, tested it on both computers, and it syncs and works fine! Glad I don’t have a Mac for this reason! Unfortunately I missed the boat on downloading the old updated version before they took it off their website about a year ago. I have version 3.543 from my old installation file, but the updated one from my old laptop is version 4.3.857. YNAB Support could not help me. It does not appear that there were any super-important upgrades between those versions and of course I can no longer update this older version that I installed on my new laptop. The only thing different that I noticed was that the columns are wider so less months fit on my screen. I hope this works for a long time. I really hope I never have to “convert” to the online version.
Save all those extra steps. Just go to that month and start funding! It’ll adjust the TBB.
Does the “aging forecast” still work for you with the hack? I feel like the aging would work best if I put the money in for next month, rather than this month if that makes sense
Does “aging forecast” still work for you with the hack? I feel like the aging would work best if I put the money in for next month, rather than this month if that makes sense
Yesterday afternoon, I started the trial for YNAB’s Web app, having held out as long as possible with my beloved, beautiful YNAB4. Well, a little longer might be possible, but Apple’s next MacOS (after Mojave) will no longer support 32-bit applications and YNAB has stated on that they will not rewrite YNAB4 to be 64-bit (not to mention that the iOS versions have been functioning badly for a year or more). I would happily pay a good sum for that 64-bit version, but YNAB’s owners moved on for their own reasons and won’t look back. (The only thing I’ll be glad to end is the relationship with DropBox.)
Yes, I hate the new YNAB. I hate how it treats credit cards. I hate not being able to see previous months’ budgets as they really were. I hate the missing next-month income. I was so upset over what I saw on the Web app when I made the move yesterday that I couldn’t even think straight. I even cried when I tried to explain the problems to my husband.
Fortunately, the hack you describe above for the missing next-month income is much the same idea that popped into my head earlier this morning, but with David Osielski’s method for reallocating the funds. I’m happy to see that this will work.
With respect to credit cards, we don’t use them to create debt. We use them for other reasons, and the cash to pay them is already budgeted to the categories for which the cards are used. The cards are paid in full as soon as the statements are issued. The primary reason we use our MasterCard credit card is that our credit union offers Apple Pay only on credit cards, not on debit cards. We LOVE using Apple Pay, so we use the credit card. Other reasons are rewards and specific large-purchase benefits available when using credit cards. Unfortunately, the new YNAB messed with credit cards, thus messing up my beautiful zero-to-budget March budget. I’m thinking of changing the credit cards to “other liability” types, but I haven’t tried it yet (since that idea also just came to me this morning) to see if that will force YNAB to see the credit cards similarly to how it saw them in YNAB4.
There’s no solution for the previous-budget issue, but that’s a disappointment I’ll have to accept—if the above two hacks work as I hope they will. Maybe David Osielski’s method will help in this area, at least going forward.
There’s one more thing I hate about the new YNAB: how it handles scheduled transactions. I might have to come up with a hack for that as well.
I discovered another downgraded feature in the YNAB Web app. It’s no longer possible to export just a particular account’s transactions in a specified date range to a CSV file. The only possible export is of the entire history of the imported YNAB file. For us that goes back to 2012. I’m an experienced Excel user so I should be able to filter the data pretty quickly, but this is still a nuisance.
Using an “other liability” account won’t work for a credit card because other liabilities aren’t budget-tracked in the new YNAB. I’m going so set up CCs as cash accounts. When used they’ll have negative balances of course, which will be “paid off” by an end-of-cycle monthly transfer from the checking account. Sorry for posting so much on this today. I think I’m done now.
You don’t have to pay anything for a 64-bit version of YNAB 4 for mac if you’ve already purchased a license. You should be able to convert the 32-bit YNAB 4 to a 64-bit version that runs on macOS Catalina just fine if you still prefer the desktop version. No bank syncing obviously but still works.
https://gitlab.com/bradleymiller/Y64
Your complaints are the exact same as mine! I can’t stand the new YNAB and have shed many tears too. I’ve been running both versions to see how the new one messes me up and boy does it. This past month, it did something so crazy with my credit cards that and I have no idea how to fix it. I HATE not being able to carry negative balances forward. I HATE not seeing what I have budgeted for next month (though this is a great hack). I HATE the way it treats credit cards! I don’t know if I can hang on much longer!!!
Great video! We use the same hack with the new YNAB. You mention “The sad part about this hack is that there is not a beautiful record left. In the old YNAB I could easily go back to any month and show you with one click the income that funded that month’s spending.” You say earlier that this is due to “At the end of the month when I’m ready to make the next month’s budget, I release the funds from the special holding category by changing the budgeted amount to zero.” We found that instead of zeroing out the category, you click on the available amount and “move” it back “to” the To Be Budgeted option. This way a minus is applied to the monthly amount and voila you now have a record of how much was earned that month for next month’s budgeting!
I love YNAB! I’ve been with them since their beginning…way before ynab 3&4. I’ve been at different places in my life where I’ve been able to budget last month’s income and when I haven’t. We switched over to the online version shortly after it came out. I also didn’t like this feature, but never came up with an awesome hack like this. So question, do we need to wait for our age of money to show 30 days before i implement this hack? I would really love to get back to living on last month’s income. Thanks for your tips!
Hi great tutorial! Just curious, do you sync your credit cards/debit cards to YNAB? Or do you manually enter the spending? Also do you use the YNAB app on your phone? Just curious how much time you spend every month maintaining YNAB. Thank you!
Great questions Liz! Yes, we use the app on our phones so that we can easily enter transations as they happen.
As for the sync-ing, we have some accounts that sync, but they are basically accounts that just earn interest and have no other transactions. It saves us time so we don’t have to update these savings accounts. For our checking account and our credit card (where most of the transactions happen) we enter transactions manually so that we are very conscious of our spending.
I don’t think we spend a lot of time on it each month, especially if we are good at entering transactions throughout the month. At our budget meeting (or right before) I will go through and reconcile our checking account and credit card to make sure the account totals in YNAB match what the bank and credit card company have. Reconciling actually goes a lot faster if you do it a couple of times during the month, but sometimes that doesn’t happen.
YNAB does have version 4 available still. I believe it may even be free now. It’s under ‘older versions’ on their website.
You can download YNAB 4 still, but you need a product key to use it. when you were able to buy it, what you bought was a product key (code) so that you could continue to use it past the 34-day trial of YNAB 4.
I’ve been using this hack for a while too! At first I tried assigning money to categories in the next month already, but it is easy to over budget in the current month because the TBB in the current month will never go below zero- it just steals from the TBB for the next month leaving you with a nice, fat, red negative number there, out of sight, if you aren’t aware/careful. Holding it in the specific “job” category of “Next Month’s Money- Don’t Touch” solved the problem. 😀
YES! I played around with it for a while and realized that too! It would be too easy to inadvertently “steal” from next month!
That’s awesome that you’re doing the same thing!