The Budget Software Confrontation: Mint Vs You Need a Budget
With services such as Mint and You Need a Budget, it is so easy to manage your finances that it makes you wonder how anyone managed to cope with simple spreadsheets. Today we are comparing the two to find out who can benefit the most from each.
Applicants
Mint and You Need a Budget (YNAB) are two of the most standout points when it comes to managing your finances. Here are the basics of each:
- Mint (Free): Mint is your favorite budgeting service by a wide margin . You can log in and connect your financial accounts with most major financial institutions including banks (e.g. Wells Fargo , Chase , etc.), Investment accounts ( Fidelity , Personal Capital , Betterment , etc.), Credit Cards etc. to get a big picture of your financial life.
- You need a budget ($ 5 a month or $ 50 a year): If you like a more hands-on approach, YNAB gives you the tools to get to know your money better. YNAB claims to help you find wasted dollars in your budget that you might not even know were. Instead of automatically categorizing your transactions, you import them at the end of each day and categorize them manually. It will help you stay disciplined, focus on your spending, and stick to your budget.
Both services have apps for the web, Android and iOS, so you can access your account from almost any device you have. They also connect to external accounts, which means that you trust them with your login details for financial institutions. However, you can read about how Mint protects your information here , and how YNAB does it here .
Mint automatically tracks expenses, YNAB counts every dollar
Mint’s approach to budgeting is as simple as it gets. During the initial setup, you need to specify the monthly budget categories. While you can create categories for every dollar spent, in my experience it’s better to keep track of variable expenses like meals outside the home or gas for your car. The rent does not change from month to month, but you will probably need help keeping track of how much you eat outside the home. For example, you can set aside $ 150 monthly for restaurants. Every transaction that is tagged as having dinner out will automatically fill in your budget bar as shown above. Mint will send you notifications when you approach or exceed your monthly budgets. It will also try to tag your transactions, but you can manually edit the tags to make sure each transaction exits the correct segment.
YNAB takes a broader approach. Rather than trying to guess your expenses ahead of time, you start with how much money you have when you first open an account (so maybe start on payday). From that day on, you can import your transactions at the end of each day and manually categorize them. The app will not automatically import and flag your transactions unless you ask for it. Then you can schedule recurring transactions that you know will happen (like rent or utilities). With YNAB, you have to account for every dollar , otherwise known as a zero-sum budget . More importantly, it only concerns the money you have right now. Instead of trying to predict your budget , it forces you to deal with your immediate transactions first and adjust over time.
In my testing, I found YNAB to be more difficult to deal with in advance, but it got better over time. If you are used to recording your monthly income and subtracting monthly expenses, then both will seem a little odd. If you don’t receive income for the entire month at once, it will take Mint and YNAB a little time to understand the rhythm of your expenses. Much of the matter, however, is in the details. The broader difference between the two is how much effort you want to put into managing your budget. Mint allows you to track variable spending with minimal effort, while YNAB is better at getting you to pay attention to every penny.
Mint has powerful tools for setting long-term goals, YNAB is limited
Whether you have long-term financial goals like paying off debt, buying a home, or saving for retirement, Mint has tools to help you. One of them will help you create an emergency fund that will automatically calculate how much you need to save to cover several months of expenses. Another tool creates a monthly plan to pay off your credit card debt. Mint’s goal tools are incredibly reliable and help you take the guesswork out of planning your financial future.
YNAB takes a much simpler but less intuitive approach to goal setting. You can achieve three main goals. Their names are rather obscure, and it took me a minute to figure out what they were doing. Here’s what YNAB calls its goals and how to use them:
- Target Category Balance: This setting allows you to set a specific amount of money that you want to save in order to achieve your desired goal. For example, let’s say you want to save $ 1,000 on a new TV. Every month, you can put off whatever you want to achieve this goal. If you can set aside $ 50 for one month and $ 500 for the next, this tool will let you do just that.
- Target Category Balance by Date: This option is similar to the previous one, but with an added due date . It will automatically calculate how much you need to save each month to achieve a specific goal. For example, if you want to save $ 1,000 on a trip you plan to make next year, YNAB will tell you how much to allocate from your budget each month to meet that goal in time.
- “Monthly Funding Goal”: This method allows you to choose how much of your paycheck you want to save each month without setting a specific goal amount or timeline. For example, you might set aside $ 500 each month until you change your goals to set aside for investment. Since you are not going to stop saving after you reach your target amount, this option gives you the flexibility to focus on planning your monthly income.
Since the objective functions of YNAB are so simple, you will have to do the math work yourself. For example, if you want to pay off a credit card, you need to calculate how interest will affect your payments yourself.
In this area, mint is much better. With YNAB, you still have to look for things like interest calculators somewhere on the Internet. While it’s okay in the discipline to get users to do the math on their own, YNAB not only saved money on automation, but also overlooked the useful tools that Mint has. However, this all means you need to Google a little, so it might cost you if you don’t want or need hands.
Mint shows your overall financial condition, YNAB focuses on monthly budget
Mint lets you view all of your personal financial accounts in one place. You can connect your mortgage, car loan, credit cards, investment accounts, and assets like your house or car. You can use all of this information to see your total net worth, find out what you are spending your money on, and compare the interest rates on your credit cards to decide which cards to pay first . Mint also offers free periodic credit checks . This feature not only shows you what your credit rating is, but it also breaks down which factors affect you the most.
In comparison, YNAB offers little more than monthly budget management. If you want to create a goal to pay off debt or savings for something, you need to do it manually (as in the previous section). If you want to know your net worth, you will need to calculate it yourself. This is intentional. YNAB is founded on the principle that the best way to manage your money is to deal directly with it. The less automation the better.
If you prefer YNAB’s philosophy of making you get to know your money better, but still want an overview, you can link the service to Betterment. Betterment lets you integrate your accounts to see your net worth, like Mint, but without budget tracking. These two complement each other, but do not overlap too much.
Bottom line: Mint automates your finances, YNAB gets your money in hand
In my experience, Mint is best for people looking to automate their finances . Best for people who are too busy to count every penny but can use a notification when they are about to exceed their fast food budget. This is great for people who want to know, keep track of their investments or how quickly they pay off their debts, without having to take out a calculator every time.
YNAB is best for people who want to budget carefully and deliberately. Since you have to manually import transactions at the end of each day, YNAB is not very forgiving if you stop paying attention. This is great for people who have very strict habits and need a tool that allows them to manipulate small details.
Whichever route you decide to go, both are powerful budgeting apps. They are just for very different people. Think of Mint as a personal finance consultant. You will provide him with all the information he can, and he will give you advice on broad strategies you can take to improve your finances, and he will let you know when a problem arises. YNAB is like a notebook and a pen. The responsibility for balancing your budget is yours, but if you use it diligently, you will stay on top of your finances and become a better person.