If I haven’t convinced you to use YNAB yet, I think this one will likely do so (or if you already use it, give you some more ideas to make it work even better for you!). In this part, I show unique ways that I use YNAB to manage my miscellaneous other accounts and transactions.
The ability to customize YNAB so much sets it apart from other budgeting software. I’ve personally tried at least half a dozen others and can confirm that no other software has this same level of ability.
I’ve gone through the all of the basics of using YNAB in the past tutorials:
I’ve also covered a little bit about how YNAB improves the organization and simplicity of my financial process:
Now I want to share some unique ways that I’ve customized YNAB to help me to get to that next level with my personal finances. These ways simplify my process, ensure that I’m not paying extra fees, and keep me motivated to save more.
Note: this is an example YNAB file, not my own personal information.
TRACKING CREDIT CARD DETAILS
I have a quite a few credit cards, plus I also open new cards once in a while to take advantage of travel and cash back rewards. Tracking credit cards is definitely the most time-consuming part of my entire financial process on a weekly and monthly basis.
The first thing I recommend with credit cards is to include your credit card limit in the description for your credit card account. For example, “Mastercard ($5,000)”. Even if you pay off your cards in full each and every month (like me), you still want to monitor that you’re not close to reaching your credit limit.
In addition, I’m very careful to set up any ongoing transactions in YNAB that are automatically charged to each credit card on a regular basis, such as my Netflix subscription, gym membership, and utilities. In addition to these automatic payments, I also include the annual fee, when applicable, as a recurring annual transaction to remind me. For some cards, this may serve as a reminder to cancel the card before the annual fee will be charged.
If I end up later canceling the credit card, then I do not have any lapses in payments that were made automatically to that specific card. I know exactly which accounts to switch. I can simply look at the credit card in YNAB and identify these as upcoming payments. Tracking these also helps ensure that I don’t have monthly subscriptions that I’m no longer using.
Anyone that has opened new credit cards for bonuses knows that monitoring how much you’ve spent on the card is essential to make sure that you meet the spend requirement within the specified time limit. I can track my overall card spending in just a few seconds by simply looking at the credit card balance in YNAB and adding back the payments made to the account from the time of opening (in the inflow column).
MONITORING CREDIT CARD REWARDS
And that leads me to one of my favorite YNAB hacks: tracking my credit card reward balances in YNAB.
I regularly spend enough that optimizing credit card rewards is worth the time for me. In addition, most of my credit card rewards offer the ability to receive cash payments, which make them easy to track in my budget. Using a spreadsheet to track the rewards is an option (I do love my spreadsheets!), but including them in my regular process works better for me.
To track my credit card rewards, I set up a reward account for each credit card, as well as a credit card reward category in the budget. Then I simply update the rewards I’ve earned at each statement date.
I don’t want my credit card rewards to be included in the “inflow to be budgeted” amount since that will allocate the credit card rewards to the general budget. Instead, I save them up by keeping them in a separate budget category by creating a separate budget category for them (“Credit Card Rewards”). Then I decide later whether I want to use them for travel, cash them out for Christmas gifts, or some other purpose.
MANAGING MY MORTGAGE ESCROW ACCOUNT
Hopefully, you’ve quantified and set up all of your debt tracking accounts in YNAB, including your mortgage if you have one (see Part IV if you haven’t yet set this up).
In addition to tracking my mortgage debt, I also track my mortgage escrow account in YNAB. I haven’t hesitated to request an escrow analysis from my mortgage company when I’ve found that I’ll be paying way more in my escrow than necessary.
You can see how I’ve set up my mortgage escrow account in the following example. Note that I have my home, mortgage and mortgage escrow in sequential order. In addition, I set up my future escrow deposits, property tax bills, and homeowner’s insurance as recurring payments.
When we purchased our most recent home, the property taxes were not being paid at the homesteaded rate (it was previously a rental property) and by providing documentation from our township to the escrow department of our mortgage company, we were able to reduce our monthly escrow payment by hundreds of dollars. Yes, we would eventually get that money back anyway, but I always prefer to keep and manage my own money (thankyouverymuch!).
Even just this week, I’ve been communicating back and forth with my mortgage company about what they deemed to be a shortage in my escrow account but was really a mistake on their part when they estimated my future property taxes. It definitely pays to be on top of this kind of thing!
TRACKING GIFT CARD & PAYPAL BALANCES
Our elementary school ran a fundraiser last year where we could buy local gift cards and a portion of the purchase would go to the school as a fundraiser. I purchased a significant amount in gift cards to my local grocery store, since I knew I would use them anyway and wanted to support the school. However, it would have appeared in my budget that my grocery bill was extremely high due to the upfront purchase.
Instead, I tracked my gift card balances as a separate budget account in YNAB and only included the expense as a grocery expense when I actually used the gift card balances. Essentially, the purchase of gift cards was treated as a transfer to another account initially.
In addition to gift cards, I track my PayPal balances as well in YNAB. The amount is never very significant, but it makes it easy for me to see everything in one place. I don’t like any surprises when it comes to personal finance (because how often is it a good surprise…?)
TRACKING SCHOOL LUNCH ACCOUNTS
I have an absolutely terrible memory and because of that, I prefer to load my kid’s school lunch funds for a few months at a time so I don’t have to think about it. However, that also means that it’s not something I think to check very often. One of my kids ran out of lunch money one time and I got a call from someone at the school informing me. It was definitely embarrassing!
I realized that it would be really simple to track school lunch balances in YNAB and update and check it when I go through my regular weekly budgeting process. Each week, I check what my kids have spent for school lunches for the week and update the balance. Then whenever I see the balance get low, I transfer money to the school lunch accounts for the next few months.
MONITORING TAX LIABILITY/REFUNDS
I talked a little bit about how I set up some of my YNAB categories to track amounts that are significant to my income taxes in Part V, including breaking out my payroll deductions to show the federal and state tax withholding amounts.
In addition to planning in advance to make my tax preparation easier, I also include a projected tax liability or receivable amount as a tracking account. This is especially helpful after I do my year-end tax projections and am preparing my net worth statement for December. Don’t ignore taxes, people. They can be significant!
And now you have it: a complete set of tutorials that show exactly how I use YNAB to improve my financial life. Because hopefully, you’ve discovered that improving your money situation improves your entire life. It all starts with your financial goals and having the right tools to help you reach them is essential.
You can get a free 30-day trial of YNAB here.
How do you currently track things like credit card rewards, lunch accounts, and other miscellaneous accounts?
Other posts in this series:
YNAB Tutorial Part I: Setup
YNAB Tutorial Part II: Budgeting Basics
YNAB Tutorial Part III: My Step-by-Step Budgeting Process
YNAB Tutorial Part IV: Net Worth & Tracking Accounts
YNAB Tutorial Part V: Ways I Use YNAB to Organize & Simplify