YNAB Tutorial Part V: Ways I Use YNAB to Organize and Simplify

I absolutely love how customizable YNAB is when it comes to setting up and rearranging accounts and categories. This allows for some unique ways to use YNAB to fit an individual’s personal finance needs.

I’ve gone through the all of the basics of using YNAB in the past tutorials:

Part I: Setup
Part II: Budgeting Basics
Part III: My Step-by-Step Budgeting Process
Part IV: Net Worth & Tracking Accounts

Now I want to share some (bonus!) tips related to how I use YNAB to help me simplify and organize my financial process.

PLAN FOR UPCOMING BILLS

I try my best to streamline and automate my financial process, as I already have way more accounts than I probably should. And as such, I’ve set up my YNAB budget to help me keep everything as organized as possible.

One significant way that YNAB helps me stay organized is through the ability to schedule upcoming transactions. I have every single monthly, quarterly and annual bill I’m aware of listed in the upcoming transactions. I do this even if they aren’t eligible for automatic payment, such as my property tax bills. This example (not my own information) that shows what this would look like (click on the photo to zoom in).

scheduling upcoming transactions in YNAB for all bills upcoming

YNAB has been instrumental in avoiding surprises from those annual pop-up expenses like renewing my Amazon or Costco subscriptions. I can never remember otherwise when these are due until they are beyond the point of ruining my budget for the month.

I use the upcoming transaction list (shaded in gray in YNAB) to ensure that there are enough funds in my regular checking account to cover all necessary upcoming payments before the next paycheck is deposited. I do this by simply taking the current working balance and subtracting all upcoming transactions until the next paycheck. There are frequently times where I need to transfer money from separate savings accounts to cover elevated spending for the current month on vacations or major home projects. This method ensures that I don’t get hit with an overdraft fee since nearly all of my bills are set on autopay.

CHECKLIST FOR BILLS DUE AND PAID

In addition, this method ensures that every single bill gets paid every single month and none are accidentally missed. If a previously scheduled transaction pops up in my account register but doesn’t clear my bank or credit card account, it is a red flag for me to double check if there’s an issue with autopay or if I forgot to pay the bill manually (can’t say it’s never happened!).

I check my upcoming transactions each week during my weekly budgeting session, so it gives me some notice to make sure I received copies of the bills that don’t get automatically paid and get the payments in on time. Without making this recurring list with all my bills in YNAB, I would need to keep a separate checklist to mark off whether each bill was made for the month. I’ve streamlined it into my regular process instead.

ALLOCATE AMONG SAVINGS GOALS

I believe that YNAB is the best personal finance software out there for one reason: it forces you to give each dollar a job. It’s so much more than a budget. It creates a plan for every cent of your money, whether earned this month or already in your bank account well before you started using the software.

Simply put, I love that I can login into YNAB and see exactly how much money I have right now that I can spend on groceries, a home repair project, my allowance, and any other category I’ve set up. That simplifies financial planning so much for me.

I have no need to manage multiple separate savings accounts for different savings goals, as I can easily set up additional categories in YNAB (much easier!). For example, assume I have $15,000 in a savings account and 3 savings goals: emergency fund, vacation fund, and new kitchen fund. I simply add and track those as separate categories in YNAB. There’s no need to manage separate accounts.

SIMPLIFYING MY TAX PROCESS

I’m a tax nerd, as you perhaps already know. But while I honestly enjoy preparing tax projections and researching tax topics, I don’t enjoy trying to find all of my tax information in a million different places and files. Instead, I keep everything really organized so that I don’t have to deal with the frustration of not being able to find the information I need. YNAB plays a big role in this.

The number one way I simplify gathering my tax information (well before tax time!) is creating separate categories (and sometimes tags) in YNAB. Some of the specific things I break out for taxes include:

  • Charitable contributions to 501(c)(3) organizations (kept separate from any other donations that would not qualify for the tax deduction)
  • Property tax bills
  • Rental property income and expenses (categories to match Schedule E income and expenses on my tax return)
  • Home improvements (just in case we don’t end up qualifying for the homeowner’s exemption someday)
  • Contributions to IRAs and 529 plans

In addition, I recommend breaking out FICA, federal and state withholding taxes from your gross pay to make it super easy to prepare your tax projections and to match them up at year end to your W-2 form. The example here shows how you can break out all of your payroll deductions, while still including your net pay as the deposit to your bank account.

I budget my income in YNAB rather than including it as inflows to be budgeted (gasp!), so I also have a breakout of all types of income. You can ignore this part if you’re an absolute YNAB rule follower. It just works for me :).

FINAL THOUGHTS

I hope you’ve grasped the idea that You Need a Budget. Both the budget and the software! My financial life is easier because of the way I’ve set up my budget.

And I know that I said there was just one more part last time, but I had so much to say that I have one more part coming in a couple weeks. In that next and final (no promises?) part of the series, I’m sharing how I track my long-term debt and many things related to my credit cards in YNAB.

If you’re interested in more YNAB tutorials and/or exactly how I set up my categories and accounts in YNAB, go to my YNAB tutorial list here.

Do you have any ways that you simplify organizing your finances?

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5 Responses

  1. Thank you. I’m looking forward to the next one. If I’ve checked the ‘notify me of new posts’ box will I get an email when it’s up? (I’ve checked ‘notify me of follow-up comments’ hoping that will tell me when you reply…)

    1. Yes, you will get an email whenever I post anything new on the blog. I’m hoping to have the next YNAB tutorial up 2 weeks from today.

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