YNAB vs. The David (Dave Ramsey)
2009 February 1
No, I’m not going to go in depth comparing and contrasting the two. What I want to ask in this short post is, which do you prefer?
Do you prefer YNABs creating a buffer to pay everything from last months income, or just have a $1,000 emergency fund.
Pretty basic.
Jeremy,
I just found your sight when I was googling blogs and Dave Ramsey.
My husband and I have been through the FPU class and are living like no one else so that later we can blah blah blah. Anyway, I have no idea what YNAB is. We have decided that $1000 is NOT enough of an emergency fund for us, we have used and replaced our emergency fund at least three times in less than a year. For a family of 6 we’ve decided we need $2-3000 in an emergency fund to keep us on track. Luckily, we have been able to pay for all our mishaps and repairs and not relied on a credit card for nearly a year now, so I’m all for using Dave’s plan, we just need to tweak it a bit.
April, great feedback. I’m on the fourth go around for facilitating FPU and the fifth time going through it in a year. It’s great, but I too have just depleted the $1k yet again and now I want to get to a months expenses and pay everything from last months income.
YNAB is You Need A Budget software found at youneedabudget.com It’s pretty slick independent piece of software.
Ahhh, okay. So let me get this right. You SAVE one months expenses and then essentially you are using that money to pay for everything? So you are trying to stay one month ahead?
If that’s the case. I don’t think I’d want to pile up quite that much when I could use it to throw at our debt. But, like I said before we do need more than $1k.
I can’t say enough nice things about Ramsey. Such a simple thing to do. I don’t think my family will be one of the amazing people after 18 months screaming I’M DEBT FREEEEEEEE! We’ll be lucky to get out of our mess in 5 years. I hope.
YNAB Buffer hands down.
Living on last month’s income makes our budget simple (and fun!) to fill out and maintain. We’ve been DR fans for years but simply could not ‘get’ the budget. The idea that we had to figure out how to lay down a plan that worked while guessing on future income just never clicked with us. After years of frustration we found YNAB and Jesse’s simple idea of the buffer and have never looked back. Yes, it took some time to get there but it is so worth it.
We don’t maintain Dave’s $1000 BEF since if a true baby emergency shows up we can just nail the buffer if need be since it is well more than $1000 anyway.
Whether you use Dave’s plan, YNAB’s very similar approach or something on your own, the bottom line is that money management is really all about behavior management and by first building and now maintaining YNAB’s Buffer it forced us to keep money in the bank thus changing our habits and life in the process for the better.
Hey, thanks. My wife’s security gland has kicked in and she wants to get as much as she can in the bank.
I’ve been a Dave Ramsey follower for years and have just began looking into YNAB. Between the 1 month buffer and his “roll with the punches” system, it seems like he’s building in a lot of “excuses” or “safety nets” for going over budget. We do have an emergency fund, but we just use cash (envelope system) and the current month’s income to spend the current month’s expenses and it works for us. Frankly, we just don’t go over budget with this system, but we also build in a nice “slush fund” each month as part of the budget (and let it roll over each month) for those unexpected expenses. It seems as if YNAB welcomes credit and debit, which may be part of the problem. You aren’t bringing your budget to the store with you like you do with the envelopes. Maybe I’m wrong, but I read one of his blogs in which he talks about using his credit card for everything and then paying it off. And even on his main page he says that “My wife and I overspend in our grocery category 80% of the time. It’s killing me!” I’m sure he’s trying to appeal to people’s comfort that no one is perfect, but something about this is a bit off.
@Rosie:
You’re right that YNAB isn’t the same as Dave Ramsey’s plan. YNAB is software to HELP you budget, whereas (as you know), Dave promotes a plan specifically to get you out of debt and into wealth.
That said, YNAB as a software tool does fit nicely for anyone using Dave’s plan. Don’t read too much into Jesse (YNAB creator) or any users discussing credit cards. They aren’t “promoting” credit card use – that’s not part of some YNAB plan that contradicts Dave. And when Jesse mentions overspending on groceries, I believe he’s using that to show how you can move the money out of another category — like clothing – to make up the difference. He’s not endorsing blowing your budget!! Just showing how to balance out different budget categories, if necessary.
And there’s absolutely nothing in the YNAB software that says you can’t use envelopes! I’ve absolutely used envelopes – and I track the cash using YNAB. Easy as pie!
In other words, the YNAB budgeting software is used successfully by folks who follow Dave’s plan. But it’s also used by folks who just want to budget and track their money. It’s like any other tool you might use along with Dave’s plan — Quicken, Money, paper envelopes – whatever!
Hope that helps.
I agree completely with Kate. YNAB & Dave’s Baby Steps are a great combo. In Dave’s book, “The Total Money Makeover,” Dave talks about needing a budget to do his “7 Baby Steps” plan. He even gives you some suggests for putting one together, but it was a bit weak on implementation. YNAB fills the implementation gap. A budget is the foundation for all other financial endevours. I use YNAB which has helps me control my spending. It has help free up money to start the Baby Steps process. And, Jesse even talks about setting up an Emergency Fund once you are running his YNAB comcept. So, I say use both. They are compatible & lead to financial freedom.