You Need a Budget's (YNAB) latest improvement to its target tool has me excited (nerd alert)!
Before we dive into what's changed, what's YNAB all about anyway? YNAB is a methodology and app that helps individuals gain control over their finances by assigning every dollar a job to start. One of its key features is setting targets for different spending categories such as groceries, dining out, mortgage, insurance, and more. Setting targets for each spending and saving category helps you decide which jobs your dollars need to do first, as well as how you're fairing with your money goals. These targets act as powerful guidelines to help you stay on track with your budget, meeting your financial goals more easily.
The old target method was definitely helpful (I totally nerded out on the first release of "goals" back in the day, too!). It let you create a budget template and adjust it easily. However, setting up the targets was sometimes, um let's say, less than intuitive. It could be confusing enough that some of my clients avoiding using it as much as possible.
But the new target tool? It streamlines the process, making it far more intuitive and user-friendly.
If you're familiar with the old targets, let me assure you the functionality hasn't changed. You can still set different kinds of targets based on the category. Learn how to transition into the new,, simple targets, with this explainer from ynab. If you're new to YNAB, or considering it, you're going to have a much easier time getting started.
With regular bills, just tell YNAB how much you need each month, such as $75 for your cell phone bill, when you need it, and that you want to do the same thing next month. Bam - target set!
For a category with variable spending like groceries, simply set the target to $200/week on groceries, and spend away. Any money left over at the end of the week rolls over to the next week, when you're prompted to refill the category back up to $200.
If you're saving for a down payment or have an annual car insurance payment, you can set the total amount you want to save, the date you want to save it by, and YNAB will automagically tell you how much money to assign to the category to meet that goal.
Some tips on targets:
- Set Realistic Targets: While it's great to aim high, setting unrealistic targets can lead to frustration.
- Regularly Review and Revise: Life circumstances change, and so should your targets. Make it a habit to review and adjust your targets periodically based on changes in income, expenses, or financial priorities. Once you've been using YNAB for awhile, it'll start calculating monthly averages, which can be a great help in adjusting targets.
- Celebrate Milestones: Achieving financial goals is no small feat. Celebrate your milestones, even the smallest, along the way to stay motivated and reward yourself for your hard work.
Want to dive deeper into targets? Check out YNAB's in-depth overview here.
YNAB continues to elevate the budgeting process from a task to a journey - a journey towards ever increasing financial fitness that is more attainable and less stressful. Curious if YNAB is right for you? Schedule a 30 minute discovery call to learn more.
