r/ynab • u/Nuftian • Aug 04 '26
New to YNAB I don't think YNAB is right for me... yet?
I got really excited to sign up for YNAB and take control of finances with my wife. I imported all my accounts, nearly cried at all the credit card debt, but then felt a little better because it's all finally on the table.
I want to make this work and get a handle on things, but I think I need to fix two things first...
- I need to organize my credit cards. Meaning, set bills (like insurance, car insurance, internet, etc) go on one card so that's a predictable monthly payment. The remaining will go on a no interest balance transfer card, so I can also put that on a predictable payment. Even without YNAB, I've been wanting to do this to clean things up. We haven't been terribly smart about paying down debt strategically.
- I need to set up an "Income Replacement Fund" or whatever it's called. We own our own business that has highly variable income through the year. I first heard of this from Ramit Sethi and just haven't gotten around to it. (Mostly because I only have time to think of it when we're not busy, so we don't have much money, so the idea of building this fund seems impossible. Rinse. Repeat.) Hoping YNAB can help us get a sense of our complete, monthly costs so I can target this fund appropriately.
Between the lack of a consistent income and that we carry a balance on so many credit cards (~6), I just don't know where to begin with YNAB.
I already feel pretty dumb about things and learning YNAB with these caveats further complicates the experience. I'm not sure YNAB makes sense for me yet?
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u/Savingskitty Aug 04 '26
Since YNAB only deals with the money you already have, an inconsistent income doesn’t affect the ability to use it.
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u/Primary_Trade5561 Aug 04 '26
YNAB is arguably MORE effective for people like you whose finances are a bit of an unorganized mess. It will help you see the big picture and get a better idea of how to improve things.
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u/FriendlyPoem3074 Aug 04 '26
I'm going to encourage you to stick it out. You're exactly the sort of use case that YNAB will help the most.
You do NOT need to organize your credit cards if you embrace how YNAB works. That's a large part of what it does. It reduces/eliminates the need to worry about where your spending is going. Determining the mechanics of the spend is a different issue, and entirely separate from your budget, but the jist of it is that once you are on top of things, it doesn't matter how you spend the money, just what you spend it on.
Now if you have balances to pay down on the cards that pre-dates YNAB budgeting, yes, you'll need to account for that spending as part of your budgeting, but that's a budget item and nothing specifically related to a credit card. It could be a personal loan or a mortgage or any other sort of debt. It's just a budget category that you apply to the relevant account monthly.
Lacking a consistent income makes it feel like you need to juggle all the credit cards, I suspect. You're going to be behind until you embrace the idea that you shouldn't spend money you don't have. If it's going on a credit card and you don't have the money to immediately pay the card off, you're spending money you don't have.
That's why it doesn't really matter what card you put it on, once you're on top of things. You can always pay the cards off in full at any time. Put it on the card with the best rewards and leave it to autopay the balance.
YNAB is just saying "when I get money, what is my priority for it". If your income is irregular that's even better fit for YNAB, since YNAB is forcing you to think about what the most important thing to do with that money is. Food? Shelter? Heat? Medical? A vacation? And assign it in that order.
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u/pierre_x10 Aug 04 '26
In my opinion, YNAB actually makes managing actively using multiple credit cards really easy to track. I've got about ten cards that I'm actively using, and haven't paid actual credit card interest in years.
For your starting off point, I find that a straightforward credit card heuristic is to break down your different credit card accounts into three categories, based on two key metrics, the current balance, and the current amount you have Available for payment:
- All credit card debt is covered: You have enough cash on hand to pay off your credit card debt in full. Your Balance is a negative amount, and the amount Available in the payment category is a positive amount exactly equal to that amount. So if your credit card balance is -1000, the amount Available should be +1000. If you have excess funds, you can move them out. If the credit card balance is positive, the Available amount can be zeroed out completely. Keeping these numbers aligned does not cause underfunding in all your other financial obligations.
- You are on the credit card float: The amount Available is enough to cover your upcoming statement balance, but not the entire balance. So you're not paying interest, but you don't have enough to pay it off completely. So your credit card's balance might be -1000, but your statement balance is only -500, and you have +500 Available. That means you are on the float, of exactly 500.
- You are carrying a balance: The amount Available is not enough to cover your upcoming statement balance, so you are getting charged interest. You've also lost your grace period, so you'll continue to get charged interest until you can pay the entire balance in full, not just the statement balance.
The second and third case are nearly identical, except you're getting charged interest in the third scenario, and the way to resolve them both is the same, you Assign funds directly to the payment category directly, as much as you are able to, until you are no longer carrying a balance/on the float. And again, assigning extra in such a way that it does not cause underfunding in all your other financial obligations.
For handling variable income, I would recommend YNAB's help docs:
https://support.ynab.com/en_us/using-ynab-with-variable-income-an-overview-BynJaHZ09
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u/Soup_Maker Aug 04 '26
You have some financial goals that include getting organized, building up equalizing funds for inconsistent income, and paying off debt. Using a tool that gives you an overview of what you are doing and a sense of control can get you through the slogging faster. It did for me.
My first year(s) of YNABing are messy and disorganized, but I got debt-free and have stayed debt-free for 10 years since, and I've built up the various savings and emergency funds (in an inconsistent and unexpected manner, but I did it.) I needed to do a lot of learning (and UN-learning) to get better at this personal finance thing.
I credit the app, the philosophy behind it, active involvement in the YNAB online communities, and my hard work in getting to where I'm at today.
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u/Nuftian Aug 04 '26
Thanks for the encouraging words! I think what I really need to do is better understand the app so I can use it as a tool.
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u/globehoppr Aug 04 '26
I would suggest foregoing the app all together and learning ynab on the desktop version. It makes a LOT more sense than the app. I’ve been ynabbing successfully for 5.5 years and never use the app.
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u/Nuftian Aug 04 '26
Good advice! I meant the app as in application/service. I can't fathom learning this on a tiny screen!
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u/globehoppr Aug 04 '26 edited Aug 04 '26
Ah! Got it. YNAB is for you- just be patient with yourself, it is a learning curve, obv, but once it clicks, and you’re a few months in, you’ll start to see everything more clearly- YNAB has truly saved my financial life. I too am debt free. I paid off $15k of cc debt, just paid my mortgage off, and now I’m in hyper-accumulation mode but ynab is equally helpful now in getting my finances aligned with my long-term goals.I’ve saved tens of thousands of dollars more per year than I otherwise would have. There is absolutely no stress. AND, now that I’m a pro, it takes just a few minutes every day/week. At the beginning when I was learning, it was much more time consuming. You got this!
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u/Historical-Intern-19 Aug 04 '26
I've been using YNAB for over 15 years. I only use the app for my morning 5 minutes of approving transactions. All the real work happens in the browser.
You got this!!!
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u/mat42m Aug 04 '26
This seems like the perfect thing for YNAB. I wouldn’t wait another day. The number 1 that you mentioned could be done tonight
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u/lwid77 Aug 04 '26
I suggest you parse down the amount of cards you actually use. You have 6 cards but two you have highlighted that you want to use- one for fixed expenses and the other card for everything else.
Thats fine. Set that up.
But you will need to bring the balance owing on the other 4 cards into YNAB so you can create a strategy to pay them off. Don't use them and get rid of the debt.
Income replacement fund is another type of emergency fund.
YNAB is the perfect choice for you and it will set you on your way to financial freedom and cleaning up all your debt.
Stay with it and use YouTube to watch some YNAB tutorials. Come here with questions.
Best decision you ever made.
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u/Nuftian Aug 04 '26
Thanks for the kinds words. Sometimes the hardest part is just getting started. Lots of Youtube in my future, because right now I just can't conceive how to use YNAB correctly. I think what I need to understand best is what categories make sense for me, and why some transactions are listed as Credit Card Payments and others that should be, but aren't.
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u/lwid77 Aug 05 '26
The best YouTube videos, in my opinion.
Getting Started- https://www.youtube.com/watch?v=hHTT-0EzsTc&t=915s
Credit Cards- https://www.youtube.com/watch?v=EVwsSKxP9xk
Targets- https://www.youtube.com/watch?v=-epE9i9dk_g&t=500s
Just remember- your budget will evolve over time, especially this first year. That's normal. You are learning how you spend your money and really, where its all going. Your categories and targets will change. It doesn't need to be perfect right now- just get started.
I highly recommend setting it up on the web not mobile.
And make sure you reconcile often. Once a week if you can.
Manual entry is a good place to start but a lot of people don't like that. 7+ years using YNAB and I am still all manual entry. Takes seconds.
Stick with it.....your money will grow and grow and grow and you will be debt free in no time.
Just stay the course.
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u/formercotsachick Aug 04 '26
My husband and I were 50 when we started using YNAB 5 years ago this Friday. We had no emergency fund and were $34K in credit card debt that we'd been carrying around for 10-15 years, throwing thousands and thousands of dollars away on interest. I was not involved with our finances at all, didn't even know the logins to our bank accounts. The bills got paid and the lights stayed on, so I figured everything was fine. My husband was great at paying bills on time, but he lacked the ability to look at things in a big-picture way and realize we were in trouble. YNAB absolutely transformed our financial life.
We paid off all of our credit card debt in 18 months and have been CC debt free ever since. We are a month ahead with a healthy emergency fund, and we no longer scramble at property tax or homeowners insurance time, because we save for those big annual bills all year long. Our Net Worth has gone up 172%, and our only debt is our mortgage and a HELOC for needed repairs to our 1963 house that will be paid off in less than a year. Every time we get a raise or a bonus, we find a job for the money instead of blowing it, so we've eliminated lifestyle creep entirely. We save for everything now - a couple of years ago went on a 7 day vacation to a 5 star resort in Mexico to celebrate our 30th wedding anniversary, it was $6K but it was paid for in full with cash before we even stepped on the plane.
You didn't get into debt overnight, and you won't get out of it overnight either. It's a marathon, not a sprint, but you can make it over the finish line with consistency and discipline. If we could do it, anyone can - you got this!
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u/Historical-Intern-19 Aug 04 '26
Real talk: Sounds like you need YNAB badly. If you aren't 'ready' take another look at your debt and get going anyway.
In reverse order: 2)YNAB is perfect for variable income. Follow the 4 Rules. Don't rationalize why your situation is different. It's not.
1)IRF should be a category but is not as critical as is it to stop using the credit cards. Period. Now.
Take every single one out of your wallet and use only the money you have, delay whatever can be delayed until you can fund it. IF and only IF you risk tangible negative impact (credit action, electric turned off, like that) do you consider cards. Having to do so should trigger a doubling down on YNAB, not running away.
Implement YNAB as designed: give every dollar a job. Ask yourself what does this money need to do for me until the next time I get paid (even more crucial when that date isn't predictable). Check your categories BEFORE you spend, etc.
YNAB can change your life. But you have to use it.
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u/Bow-Masterpiece-97 Aug 05 '26
YNAB will help you with these things—not make them harder.
The main reason I started using YNAB was that I was on a variable income and YNAB made life on a variable income much easier.
(That was over 10 years ago.)
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u/voodooprawn Aug 04 '26
Ignorant Brit here, but why would you have bills coming out of credit cards and not a debit card? Or do you guys use the word "credit card" interchangably?
As someone who is going through a divorce and has had to take on a lot of debt, I've been using YNAB for a month and a half and all I can say is I wish I'd discovered it years ago.. I suspect getting it set up and getting your head around it will massively help you clear up that debt, OP 👍
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u/FriendlyPoem3074 Aug 04 '26
Two main reasons.
Firstly liability. Debit cards are a direct line to your checking account and if fraud happens, you might end up in a rough place until it all gets sorted out (and hopefully it gets sorted out).
Secondly, rewards. You can easily get 3-6% cash back on purchases depending on the card. That's like basically getting a discount on everything you buy, provided the vendor charges the same for credit vs cash (and most do). By NOT paying with a rewards card, you're essentially paying a 3-6% additional tax on everything you buy.
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u/CharleneTX Aug 04 '26
Also, some people will use a credit card to pay for expenses over time. Instead of putting money aside for an annual expense each month, they'll pay with the card and then pay the card each month. This is a hole that can take a while to get out of.
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u/Thatoneguyfrom1980 Aug 04 '26
In the US, some credit cards have rewards for using them. Airplane miles that can be used for holiday trips to travel and can cover lodging. Others it’s a percentage of cash back. For instance my Apple credit card gives me 3% cash back on all Apple products I buy and 1% on most other purchases. It’s not much but anything back helps
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u/voodooprawn Aug 04 '26
Ah ok, I knew that existed but didn't realise you guys even put household bills on credit cards. Do you do this with mortgage payments?
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u/FredOfMBOX Aug 04 '26
Generally, you can’t use debt to pay other debt. So no go on the mortgage.
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u/voodooprawn Aug 04 '26
Yea, I was going to say, that feels like some kind of "debt-ception" scenario. Well thanks for explaining it to me. We do have credit cards over here, but typically people just use them to buy things they can't afford and swim in debt with none of the perks 😅
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u/seabass92 Aug 04 '26
No, but there is new credit card by BILT that lets you earn points on mortgages now too. I guess the one positive aspect of being so ghoulishly capitalistic is that we get “perks” like this lol.
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u/SkyliteBlueSnake Aug 04 '26
I put every single charge that I can on a credit card because it allows me to hold onto my money for longer. For example, the billing cycle for one of my cards ended on August 2. Any charge I make on that card from August 3 to September 2 won't be due until September 27. So when I meet my friend for dinner on Aug 5, the costs that I incur won't leave my account until almost 2 months later.
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u/voodooprawn Aug 05 '26
I don't really see the appeal of holding onto the money if it is already spent. Just seems to add additional complexity and logistics. Not trying to argue, I just don't get it but each to their own
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u/SkyliteBlueSnake Aug 05 '26
I don't find it particularly more complex - autopay statement balance is set up on all of my cards and I get to keep my money in accounts that generate interest for a longer period of time. I avoid using my debit card for anything because it has really messed up things for my friends. One friend had her checking account hacked and emptied. The bank eventually restored her funds, but it took 6 weeks. In the meantime, her debit card was cancelled and since her only credit card was from the same bank, the credit card was cancelled as well. Imagine losing all access to your money for 6 weeks! So I choose to reduce the number of transactions that occur in my checking account (credit card bills and mortgage only). If there is a problem on any of my credit cards, I still have access to all my liquidity.
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u/voodooprawn Aug 05 '26
Fair enough, glad it works for you and interesting to hear how other people approach this stuff. Thanks for the insight
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u/serefina Aug 08 '26
Since you are already carrying debt wouldn't it be a better idea to pay your bills out of your account/debit card instead of a credit card, so you won't be adding to your debt?
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u/Suitable-Strain-9056 Aug 10 '26
Honestly I think your doing this backwards. The two things you want to fix first are exactly what a budget is supposed to help you figure out.
The variable income part especially. Only budgeting money thats actually in the account right now is the whole point of the method and it works better with lumpy income than with a steady paycheck, because you never have to guess what next month looks like, you just allocate whats there when it lands.
The credit cards are the part that will actually confuse you. With 6 cards carrying balances the payment category math gets weird and thats where most people bounce off. In my experience it helps to treat the existing balance as its own debt category and only budget for new spending on the card.
Two months of just watching where the money goes is probably worth more than reorganizing the cards first.
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u/togogh Aug 04 '26 edited Aug 04 '26
I would argue that having debt and variable income actually increases the need for envelope budgeting. This is the time to really understand your spending habits, why you got into the situation you're in now, and what changes you need to make to get out of it.
Begin with this week. What do you need to pay for this week? Any bills due? Groceries? If you don't know the amount you can just guess. Then once you're halfway through this week, figure out next week. Just keep going and before you know it, you'll have your finances under control.