Finances

Building a Better Budget Part 3

Are you ready for the next step? Go back and read Building a Better Budget Part 1 and Part 2 if you missed them. You’re going to need to create a Budget Guide and Customize some Categories before continuing with Step 3.

Now that you’ve read our other financial posts, you know that we use a program called You Need A Budget. That’s an affiliate link, by the way. If you click on it and sign up, we both a get a free month. If you love it as much as we do, you can continue for either $11.99 a month or $84 annually (pricing current as of 3/3/2020).

If you haven’t signed up for your free trial yet, click the link! Today, we’re adding accounts and giving our money some very specific jobs. Trying anything new can be intimidating so I’m going to break it down into simple steps with lots of pictures.

Adding Accounts

After you sign up for your free trial, the very first thing you have to do is add your accounts. Depending on how many accounts you have this might be a bit more involved than my simple example here.

I’m going to walk you through adding our imaginary checking account.

Then I’m going to add in four credit cards, a truck loan, and a camper loan…just because that’s what I have in our imaginary Budget Guide.

Start by looking to the left of the screen and click Add Account.


The very first thing it’s going to ask is if you want a linked or unlinked account.

I highly suggest using a linked account.

No, I don’t want you to rely on your bank to keep track of your transactions.

But I do want them to be your fail safe. We all lose receipts sometimes.


This is where it gets personal. You have to choose your type of account. Generally checking, savings, line of credit, asset, or credit card.

You can nickname it if you want to. I actually have one credit card named Devil’s Spawn from Hell and another named Money Maker. I’ll let you guess which one has the higher interest rate and which one has the best cash back rewards.

Don’t forget to add your current account balance. This is VERY IMPORTANT.


Success! Once you see this screen your account is all set up!

You can either Add Another Account or you can hit Done and be taken straight to your account register.


Here, you can visit our imaginary Checking Account register while I go create the rest of our imaginary accounts.

I went ahead and gave us $3418.17 in our checking account. It just so happens that’s exactly how much we need to fulfill our Budget Guide that we created last time.


If you add credit cards, you’re going to get this screen. It says Unlinked for me because these are imaginary. I’m also selecting Skip This For Now.

You can absolutely watch videos on the YNAB site to learn about these two options. And we’ll talk about goals later too.

Today, we’re just covering the basics.


When you’re all done adding accounts, the left hand side of your screen should look something like this.

You can absolutely add an asset as a tracking account to offset some of that debt. There are videos to explain it on the YNAB site, and I’ll cover it in a later post.

If you do add an asset, be real about it. I know we just paid $40,000 for our imaginary truck, but we both know as soon as we drive it off the lot it isn’t worth nearly that much. Find a realistic value for any assets that you add into your budget.

Now hit Budget because we’re ready for the next step!


Let’s Put Our Money To Work!

Are you back at your main budget screen?

Do you see that green To Be Budget Box at the top? If you only added one account, it should match the account balance. If you added more than one account, it should equal the sum of the accounts. The nice thing about YNAB is that you don’t need a bunch of different accounts.

If you do have different accounts, you should probably make a Header (or Category Group) with that account’s name and then keep any categories that you are going to assign money to from that account under that heading.

Trust me though when I say that it is much easier to have just one spending account.

For this example we’re going to go ahead and assign all $500 in our savings account to the Alaska category. If you’ve gotta save, may as well make it fun, right? All you have to do is go over to the Budgeted Column and replace the $0.00 with $500.

Your To Be Budgeted amount should now match your checking account balance. We’re going to use this checking account as our main spending account.

We’re going to use this same process (replacing the $0.00 in the budgeted column) to assign the rest of our dollars to our categories. Pull out your Budget Guide to figure out how many dollars go in each category. As you assign money, your To Be Budgeted amount will decrease.

Go ahead and skip over The Cost of Debt unless you have a plan to cover interest. Unfortunately a lot of us only have plans to cover the minimum payment and, hopefully from here forward, our monthly purchases.

When you’re all done, your budget screen should match your Budget Guide. If something doesn’t add up, check the math on your Budget Guide. If something still doesn’t add up, check your input on your main budget screen. Sometimes we mess up. It’s okay. It’s also normally super easy to find when you set things up this way. Correct any issues and move on.

When you run out of money…STOP! You can’t assign jobs to money that you don’t have. That’s why we set things up in order of priority. Just go down the list until you have to no more money to assign. That might mean you can only partially fill a category. That’s okay! Thankfully we had just enough money in our account to cover our monthly bills, our weekly contributions to annual bills and goals, and one week of living expenses.

If you ran out of money before everything was done, BREATHE.

Seriously, take a deep breath or two. Go outside for a minute and just sit on the earth and in the sun. It will help clear the panic and recenter you.

Photo by Spencer Selover on Pexels.com

Look at your categories. Is there anything that you can do without between now and next pay day? Maybe you funded a goal that is a VERY long way off. You can move that money to cover immediate expenses. Maybe your lifestyle doesn’t quite match your paycheck.

This is a new beginning and we need to be honest with ourselves about our money and our habits. You can attain financial freedom, but it might be uncomfortable in the beginning. Just like facing anything that we’ve let get out of control in our lives, facing it can be painful. I swear I was depressed for like the first three months of budgeting. Our financial situation seemed so daunting…so impossible. But within two years we were able to survive a furlough with zero income coming in. You can do it too. Just breathe and push through the discomfort. Make changes where you can and accept what you can’t.

In Part 4, we’ll learn how to record purchases and what happens when we use credit cards. Then the fun will really start in Part 5 when we get paid again!

2 thoughts on “Building a Better Budget Part 3”

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