The Five-Minute YNAB Routine

I helped a friend get set up with YNAB last year, one of my favorite things to do! She was so excited at first, but a month or two in, she kind of stopped talking about it. When I gingerly asked how it was going she said, “You know, I kind of stopped using it, and I’m not really sure why. I know people have life-changing breakthroughs using YNAB, but that just hasn’t happened for me yet.”

She was glad I asked, because she wanted to try again but didn’t want to bug me about it! So I assured her that this experience was normal and helped her establish some new habits that would help her check in with her plan more regularly. That was all she needed! Six months later, she’s feeling better about her spending and her goals than ever before. She’s on track to be a bigger YNAB nerd than me!

Maybe you’re like my friend. You joined YNAB full of enthusiasm, but it just hasn’t stuck for you yet. Maybe you’ve been using YNAB for a long time, but just want to level up your game! 

No matter where you are in your YNAB journey, I’d like to teach you exactly what I taught my friend. Let me to introduce you to ✨Your YNAB Routine✨. The key to really loving the way you spend is setting up a regular YNAB practice. We have suggestions for a daily, weekly, and monthly routine, so let’s talk about what to do to get YNAB to really change your life! 

Daily Routine

Step Zero: Open YNAB

It may seem obvious, but this is the first step in creating a routine you’ll follow! Pair opening YNAB with something you already do daily: that latte you savor every morning, waiting in the carpool line, the subway commute, or keeping your kid from flooding the house during bath time.

Step One: Update the accounts. 

Every bit of information in the monthly plan comes from the accounts, so you’ll always do this before anything else! 

If you use Direct Import, you will categorize and approve the transactions you see in YNAB. On the mobile app, tap Accounts at the bottom, then the New Transactions banner at the top. On the web app, you can approve transactions from the All Accounts register, or you can click on the individual account names that have white dots in the left sidebar. 

If you don’t use Direct Import, you’ll want to enter (or use file-based import to bring in) any transactions that have cleared the bank since you last updated YNAB and ensure they have the cleared (green C) icon. 

Step Two: Adjust your plan. 

Go to the Budget screen to see the categories. Cover spending that you’ve already done based on your priorities.

Cover red (cash) overspending. 

If you see red overspending, that’s the first thing to resolve. Any time there’s a red, negative Available amount in the current month, you can’t trust the other green Available amounts. Move money between categories to cover that immediately so you can spend and save confidently!

Cover yellow (credit) overspending. 

It’s ideal to cover all the spending you’ve done this month, whether it’s cash or credit spending.

If you pay your credit cards in full, you’ll fund your credit card spending the same as if it were on a debit card. You’ll know you’re set up to pay in full when your Credit Card Payment category looks like this: 

If you’re working to pay down a balance on your card or you’re on the credit card float, we suggest covering as much of the credit overspending as possible! Creating the habit of funding all your current spending is the path to a fully funded credit card. You can assign money to the Credit Card Payment category as you’re able to cover your prior debt over time. 

If you don’t have enough cash to cover all your monthly spending right now, there will be some overspending in your plan. Prioritize covering red overspending and assigning money to the categories you must pay out of the checking account (rent, utilities, paying your babysitter—anything you can’t pay with a credit card).

Assign any remaining dollars. 

Think about what you need between now and your next paycheck. Use any targets or scheduled transactions to guide your assigning. When Ready to Assign reaches zero, stop assigning.

If you need money in an underfunded category, but Ready to Assign is zero, move money between categories so the most important categories are covered. 

If you have money left over after you’ve covered all your expenses for this month, think about True Expenses and savings goals. Are you prepared for a car or home repair? Are you on track for annual bills? What about birthdays, holidays, vacations, and other things that often take you by surprise? It’s okay to add a category for those things even if you don’t have money to assign there yet. That will remind you to think about those expenses as you continue to update your plan.

If your monthly plan is fully stocked for this month and you still have money left over, maybe you’re on a path to get a month ahead! Check out the Getting a Month Ahead in YNAB Guide for two methods to work toward this goal.

Weekly or payday routine

Routines need to fit your life. If you get paid weekly, it’s best to use this routine weekly. If you get paid on a different cadence, you can do this routine weekly or just wait until payday!

Step One: Update the accounts

Process old, uncleared transactions. 

It’s important to search each register for uncleared transactions and match, clear, or delete them once a week. An incorrect amount, a restaurant charge without the tip included, a check that hasn’t been cashed for a long, long time—there are a number of reasons these pesky transactions could hang out, hidden in your register. Uncleared transactions affect your categories, but they’re not included in reconciliation, so they’re easy to miss!

Reconcile your Budget accounts. 

We recommend reconciling all spending, saving, and credit card accounts weekly. Many of the numbers in your categories are based on these accounts, so if the account balances in YNAB don’t match the bank, you can’t trust your plan. 

Reconciling is more than just a visual check of the cleared balance in YNAB compared to the cleared balance with the bank. You’ll click the Reconcile button in each account and follow the prompts until the green Cs turn to green locks! This process confirms the last time the balance in YNAB matched the bank in case of a discrepancy in the future. It also helps YNAB load faster, prevents duplicate imports (especially when switching between import providers), and is all-around good YNAB hygiene!

Remember that if you’re reconciling for the first time in quite a while (or ever!), the process can feel long, and you may need a Reconciliation Balance Adjustment to make the cleared balance in YNAB match the bank. But when you reconcile regularly, you’ll be surprised how quick and easy it is, and you’ll rarely need an adjustment!

Step Two: Adjust your Plan

Assign new money. 

If you’ve gotten new inflows since you last assigned money, you’ll assign that money until Ready to Assign is zero again! Cover any red overspending first, then assign the remaining funds based on your priorities!

Turn of the month routine

In addition to your usual daily and weekly routine, there are a few other steps you’ll want to take at the turn of the month.

Step One: Update the accounts: Taylor’s end-of-month version. 

If you rely on direct import for most or all of your transactions, there are likely transactions that will clear and import dates for the month that’s ending. That can cause unexpected overspending to appear after you’ve already moved on to the new month! You can resolve this by manually adding any transactions that are pending with the bank to YNAB and leaving them uncleared (gray C icon). Then reconcile the accounts!

Reconcile Tracking accounts. 

You can reconcile your Tracking accounts (investment and retirement accounts) as often as you like to see updated balances. We recommend making this a monthly or quarterly task.

Step Two: Adjust the plan

Cover overspending: end-of-month version. 

Once you’ve added that end-of-month spending yourself and reconciled all the accounts, cover as much overspending as possible. Always prioritize red, cash overspending and then credit overspending if you’re able. If you don’t have the cash to cover some overspending, YNAB will resolve it when the month rolls over.

Check the Credit Card Payment category. 

The Credit Card Payment category is the pile of cash you have set aside to pay on your credit card. If you pay the card in full (or the statement balance) each month, that pile of cash should be green and match what you owe. If you’ve covered overspending in the current month and it’s still short, assign more money until it turns green. If you’re working on a balance, it should be green with a pie icon showing you’ve funded it according to your target. If it’s yellow, click on the category and investigate why. 

Assign money in the new month.  

You can manually assign money in that new month, use the Auto-Assign buttons to assign money more quickly, or a combination of both! If you have targets on your categories, you can use Underfunded for all the categories at once or by selecting specific Categories/Category Groups and funding those in bulk. If you don’t have targets, you can use the Average Spent or Spent Last Month buttons to assign based on your historical spending data. 

Bonus points! Check YNAB on the go!

Are you currently living paycheck-to-paycheck and you want to break that cycle? Do you tend to overspend your Dining Out category? Do you keep overspending on groceries, because you didn’t realize your partner went to the store the same day? If so, we have some extra credit for you!

Open the mobile app when you’re out shopping. You can open it in the car before you head into the grocery store/coffee shop/Target (don’t get us started on Target!). Check how much money is available and let that guide your shopping.

Remember that your plan is flexible. If there’s only $10 in transportation and you need at least $20 worth of gas to get you to payday, go ahead and move money between categories and put the gas in the car! YNAB isn’t meant to be restrictive; it’s intended to help you spend your money on what’s most important to you. 

Bonus bonus points: enter the transaction after you spend. People who use cash envelopes talk about the awareness that spending cash brings. You can achieve this same level of awareness with YNAB by checking the Available amount in the category before you spend and entering the transaction afterward. Benefits: that category is perfectly up to date (no waiting for direct import) and when the cleared transaction does import, it will match up with the one you entered!

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