YNAB to Moneywell and Back Again

Recently I had been listening to the podcast "Enough" from Minimal Mac. One key idea in that is to use the best tools to do your work and rather than using a ton of apps use a few good ones.

So I look at what apps I'm using and how to simplify things. I have been using YNAB (You Need A Budget) for two years. Two things I decided I didn't like about YNAB: it runs on Adobe AIR and it doesn't manage investments. AIR is essentially desktop apps built in Flash which tend to be a bit slower than native Mac apps and there's no option to update via Mac App Store.

Around this time, MoneyWell 2.0 became available on the Mac App Store at a hefty discount, so I decided to buy it along with the companion iPhone app and give it a try.

I tried MoneyWell for around a month and ended up going back. Why? Because YNAB fits how my brain works and wants to manage money slightly better than MoneyWell.

It boils down to the philosophy of how each manages your budget on a month-to-month basis.

MoneyWell basic philosophy and method
MoneyWell works like this: you set up "Buckets" which are similar to envelopes in a cash envelope system. You take your income bucket and dump it into your expense buckets, and then you spend out of those buckets. If you set it up correctly, income events will cause the money to flow into the buckets and when one fills up to your preset limit for the month, it will fill up the next.

YNAB basic philosophy and method
YNAB works like this: you track how much income you made last month. This becomes your "Starting Buffer." You take the money in there and distribute it among the different categories of your budget until you get down to $0 remaining. *

YNAB and MoneyWell compared
With MoneyWell, I find it tricky to see how much I have budgeted for each category for the month compared with how much I spent and how much remains. It seems I would need to combine two or even three reports to get all this information.

In YNAB, this information is front and center in the Budget screen. Each category has how much was added this month, how much was spent this month, and how much is remaining. Remaining may not be Added minus Spent as the month's balance also includes any money leftover from last month. You can just scroll over so the previous month's budget amounts are in view.

YNAB seems to give you more control while MoneyWell automates things once they are set up correctly. I find more control means more awareness of my spending habits and it tends to help me better manage my money. So now it is back to YNAB for my budget tool of choice.

Managing Investments
I'll just need to find a tool to manage investments I like. Most likely I'll go with Moneydance which is the financial management app I used a before I started using a Mac. One ironic side note here - Moneydance is actually written in Java so I won't have the ability to update that in the Mac App Store either. Thinking about it - if an app does exactly what I want it and works well, it doesn't matter if it is Mac native or not.


Footnotes
* YNAB actually has a section on their site about the philosophy behind the software, so you can follow their 4 Rules Method without buying their software. You can use any just about any personal finance software you already have, spreadsheets, or maybe even an abacus + pencil + paper to implement the 4 Rules. But having the software sure makes it easier.

** I don't work for YNAB or any other companies mentioned in this post, just sharing what works best for me.

Zero-Based budget spreadsheet

I've decided to go ahead and share the Zero-Based Budget spreadsheet that I've been using to set up my budget every month. This spreadsheet will work with NeoOffice, OpenOffice, and anything that can read/write Microsoft Excel files.

I actually prefer to call it a Cashflow Plan. "Budget" sounds like you have to pay your bills, pay down your debt, and then you've got $5 to last you the month. Cashflow plan (and Zero-based budget) means you figure out how much money you have coming in and you decide how you are going to use each and every dollar.

So far, I haven't found any personal finance program that does a good job at budgeting. MoneyDance does a great job at everything else. So I create my budget for the month with this spreadsheet and then put the final numbers into MoneyDance so I can track how my spending stacks up against the budget.

Quick date entry in Moneydance 2007

I stumbled across a cool little feature in Moneydance 2007 recently. It may be in early versions, but this is the first version I've seen it.

When entering transactions when you enter the date I'd been typing the whole date or using the arrow keys to edit the date. I found out if you enter the month and date such as 2/25 it will auto-fill the year. If you just put the date, it will fill in the current month and year. So if you just type 25 right now (February 25, 2007) you'll get 2/25/2007.