10 YNAB Life Hacks Every User Should Know
YNAB is a personal finance and budgeting platform designed to help you manage your money by categorizing every dollar. The acronym stands for “You Need a Budget,” and it works like a digital envelope system: you allocate funds to different categories based on your spending priorities. If you’re new to this type of budgeting, it may take some time to get the hang of it, but there are plenty of helpful tips and tricks to help you get the most out of YNAB’s philosophy and features.
Set aside a small amount for the coming month to review underfunded categories.
By default, YNAB only displays your budget one month ahead of the current month. But once you allocate money for the next month, the budget for the following month becomes available. This allows you to see your targets and any underfunded amounts for the future to better plan your spending. You don’t need to budget for an entire “month ahead” to do this—simply allocate a small amount to a category to see what the future holds. For example, if it’s October, allocate a dollar to a category in November to unlock your December budget.
Create a reserve category for next month to avoid overspending or going over budget in the future.
You can use YNAB’s “month-ahead” approach by allocating available funds directly to future months, so that by the first of the following month, the funds will already be in categories ready to be spent. An alternative workflow is to store excess funds in a reserve category (“Next Month’s Funds,” for example) in the current month. When the month moves to the next, move this money to the “Ready to Distribute” category and then allocate it to underfunded categories using the automatic allocation feature. This will prevent overspending in “replenishment until” categories that weren’t fully spent in the previous month and allow you to easily cover the overspending in the current month without using funds from a future budget.
To ensure the accuracy of your expense reports, please direct your receipts directly to the “spent” category.
When you receive a reimbursement—for example, for work expenses, from a friend who reimbursed you for dinner, or a refund from a returned item—classify the transaction directly in the category it came from, rather than first submitting it to the “Ready to Assign” section. This ensures the receipt doesn’t appear as earned income in your “Income vs. Expense” report. For example, you might classify a Venmo transaction directly in the “Dining” category, and a store gift card in the “Purchases” category.
Separate job costs and reimbursements to keep your personal budget reports accurate.
If you have to pay work expenses out of your personal funds, create a special category for such transactions (“Employment Expense Reimbursement,” for example). When a payment comes in, enter it in this category and allow it to remain as an overdraft. This will allow you to see at a glance exactly how much your employer owes you, so you can track reimbursement requests. When these funds are reimbursed, direct them directly to the “Employment Expense Reimbursement” category to cover the overdraft. As with the method described above, this will prevent expense reimbursements from artificially inflating your actual income.
Check pre-authorization charges to avoid pending and confirmed transactions being recorded at the same time.
For accounts that automatically sync with your budget, pre-authorizations may appear pending for several days before the final transaction is confirmed. In some cases, these amounts may vary—for example, due to a tip added later—and the pre-authorization may not disappear after the actual charge. If you entered a pre-authorization transaction to track your cash flow, mark it so you don’t forget to remove it if the actual charge occurs later. Click the flag icon next to the transaction and select a color specifically for pre-authorizations. You can use flags to organize other types of transactions, such as charges that need to be refunded.
Add gift cards and store rewards as budget accounts to ensure you’re spending your money efficiently.
Gift cards and store rewards points are easy to lose track of if they’re not included in your regular budget, meaning you may never spend them (and miss out on savings). But if you add them to your budget as unrelated cash accounts, they’ll be visible—and you might be more likely to actually use them. This will also ensure the accuracy of your reporting, as you’ll be able to categorize these transactions the same way you would transactions made with other cash or credit accounts.
Add due dates to category names and sort by deadline to prioritize funding for the most important projects.
If you have dozens of categories that you prioritize and fund each month, a little organization will make it much easier to track the most important tasks. YNAB shows you when you need funds based on your goals, but for large bills with the same due date each month, add the due date to the category name and organize the categories from earliest to latest. This will provide a handy visual reminder of what to fund first, second, third, and so on, as you have funds available to allocate.
Enter regular payments as scheduled transactions to forecast cash flow.
YNAB shows what your money is going toward, but it doesn’t show where it’s located or when it will be debited from your account to pay bills. This means categories can be replenished, but you could still end up in the red if your paycheck and automatic debit times don’t align. To avoid this mismatch in your cash accounts, select “View” and enable “Show Current Balance.” Then, enter future fixed transactions, such as rent and utilities, with payment amounts and due dates, as well as fixed payroll payments. You can set these to recur on specific dates or with a specific frequency. This will let you know at a glance whether your account is expected to be in the red on scheduled payments, so you can reallocate funds to cover expenses.
Compare your available funds and credited account balances to identify hidden debt.
The YNAB method is designed to help you avoid “overdrawing” on your credit card, which is when you don’t have enough money to cover the total amount you owe, and paying off your current debt depends on future income. This may not be obvious in your budget if none of your categories are overdrawn, but you can compare your “available to pay” balance on a card to your paid-off negative balance on the same account in the left sidebar to identify hidden debt. If your available to pay balance is less than your current balance, you’re overdrawn. If you have available funds (for example, from flexible spending categories), you can transfer money directly to your credit card category to cover the shortfall. Otherwise, you’ll need a strategy for gradually paying off the difference.
Install the Toolkit extension for more customization options.
YNAB already offers fairly detailed reports, but for users who need even more, the open-source browser extension Toolkit for YNAB adds additional data views, filters, and user interface customizations to the web version of the platform. For example, you can change fonts and progress bars, add buttons and radio buttons, edit data in batches, and enable custom filters and reports. The Toolkit is available for Chrome and Firefox, but it’s worth noting that it’s not an official YNAB product.