You Need a Budget (YNAB) by Jesse Mecham - Book Report

How the YNAB budgeting philosophy really works in practice!

You Need a Budget (YNAB) by Jesse Mecham - Book Report
Photo by Kelly Sikkema / Unsplash

How the YNAB budgeting philosophy really works in practice!

This book was excellent. If the title looks familiar, YNAB is a cash-based budgeting application many people use. I first heard about it from Ramit Sethi in his book “I Will Teach You to be Rich.” And I used their software honestly as research for an article I wanted to write comparing EveryDollar to other financial tools. I converted to the YNAB tool in the study and started learning about their philosophy. You can find more about that here.

YNAB does a great job educating people on its money philosophy. Like most great companies, their mission and vision were around a philosophy, not a software tool. Their budgeting system became an extension of their money philosophy, specifically around budgeting. They freely share their information, and they’re found. Jesse Mecham, who wrote the book, freely advocates on a podcast that you don’t have to use the software if you don’t want to take advantage of their philosophy.

So, why did I read the book if its content is so freely available? Because honestly, I love reading paper books. Primarily for nostalgia but also because of good sleep hygiene. I have difficulty falling asleep, and reading a paper book before bed helps with that. Writing blogs about books is one way to hold myself accountable and motivate me to keep reading. I also am fascinated by the YNAB budget approach. I’ll be honest. At first, I didn’t get it. I first fell in love with the software, struggling against its cash-based budget approach. But I stuck it out until I got it because their software solved a few particular problems I was having.

Why was I stuck with it?

I wanted to be able to create multiple budgets—one for my business and one for my personal life. I was keeping my business budget on a google sheet, and it was hard for me to keep up with it. Also, my wife and I have had many accounts, and we kept running into a problem of forgetting to pay with a credit card. To solve this dastardly problem, I either needed a software tool that made it easy or got rid of all the credit cards to save one. YNAB solved both of these problems quickly.

Then their budgeting philosophy clicked?

I remember going along and slowly uncovering their money philosophy in action. I pride myself on being able to understand things, even complex things. I consider it a gift. Ask me to remember what I was 5 minutes ago. I couldn’t tell you. That’s my biggest weakness, being lost in the clouds. But understanding things, especially financial things, is a strength. But for some reason, YNABs philosophy took a while to understand. It is just four rules if you don’t know their money philosophy.

YNABs Four Rules

  1. Give every dollar a job
  2. Embrace your true expenses
  3. Roll with the punches
  4. Age Your Money

Rule 1 took me a long time to get. It seems simple at first “Give every dollar a job” Well, duh. But what made it hard is that when YNAB says “dollar,” it means dollars in your possession. Not future money you may get, even a paycheck you rely on. But only the money that is in your bank account. Man, I tried to get around budgeting my money and forecasting the whole month. But after I stopped fighting it and just budgeted my money in the account, I started to create a buffer between me and my expenses. Rule 2 is where things take off, and you begin creating a buffer between you and your spending. But more of that is in the article here.


So why should anyone read the book other than a person with poor sleep? Because Jesse does a great job explaining the philosophy of each of the four rules and then giving examples of folks putting those into practice. It will speed up your understanding if you decide to use the software. But also uncovers the beauty of its cash-based budgeting philosophy.


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Updated on 11/1/23