I’ve been using You Need a Budget (YNAB) for over a year and I’ve been very happy with it. The YNAB implementation is unique in the finance management software market but it’s based on a simple model called “envelope budgeting.” YNAB preaches “give every dollar a job” and the desktop app does a good job encouraging proper budgeting. I’ve discussed this at length on Nerds on Draft episode 19.
This week they released YNAB 5 and it’s clearly not aimed at me. YNAB has replaced their desktop application with a Mint-like cloud service and in doing so undermined the very reason I felt secure with their software. All previous versions of YNAB gave me sole control over the software. I could sync through Dropbox but I was also in control of that decision. All data stayed on my laptop and I was not required to share it with anyone.
YNAB 5 is a completely hosted solution, with a future desktop application to interact with the service. For some, the convenience may be worth the risk. I left Mint because I didn’t want to share my data, no matter how buzz-full their security policy sounded. I’ve reviewed all of the publicly available information about YNAB 5 and I see no 2-Factor Authentication.1 I see no information about employee access standards. I see no information about master key controls. With YNAB 5, I see no end-user benefit for the added vulnerability.2
Now, I know some people will ask “what’s the big deal?” Not syncing all of my fully annotated financial data, aspirational projects, family burdens, and poor life choices was one of the best features of YNAB 4. Not even my accountant gets as much information as I put into my finance software. I try hard to avoid single points of compromise and I’d certainly not choose a brand new cloud service to hold my entire identity.
The YNAB security page is moderately informative but doesn’t really provide the detail I’d want when handing over all of my financial information and account logins. They state that data at rest is encrypted. However, as we learned from Ashley Maddison, it doesn’t much matter if the master keys are also stored in the same environment.
They are using one of the standard providers for banking API access, Finicity. For that matter, Finicity offers their own similar service called Mvelopes. So if you implicitly trust Finicity (and think a modern Web site should be Flash-based), there’s another option.
It’s a highly competitive market out there for hosted finance tracking services. If that was what I was in the market for, I’d have plenty of options. But I’m not so I don’t. Here’s what I’ve tried in the very brief time since the YNAB 5 announcement. These are not complete reviews. I’d need at least 6 months to do a complete review.
iBank is probably the most feature complete stand-alone application. They offer plenty of online subscription options to make account syncing easier, but that’s not what I want.
iBank has a robust import and transaction categorization option, direct account syncing for many banks, and integration with Reminders for Mac. I also really liked the way the envelope budgeting is represented as a comparison with typical retrospective budgeting.
Feature complete can also be a euphemism for “a lot of damn controls.” iBank is not an enjoyable app to use. The envelope budgeting is too opaque and awkward. It feels like it was bolted on to something designed as a traditional retrospective budgeting application. The reporting options are sparse and slow.
This application would be perfect if it worked. The envelope budgeting is very similar to the YNAB system. It’s easy to use but lacks some of the nice YNAB 4 reports.3 Unfortunately, I’ve been unable to get the envelope budgeting to work and there’s been no response from their support email or forum. Given that the first of the year is a key time for budgeting that’s a little surprising.
What a pretty application (minus a few visual glitches). The interface is just lovely. It’s also open enough to allow third party plugins, provide password protected Dropbox syncing and has a ton of reports. It’s also available for multiple platforms and has a direct purchase option.
I like the reporting options but most of them are just text. That’s not bad but set your expectations correctly.
The envelope budgeting option is functional but still feels a bit awkward. What I do like is that I can create separate budgets which allowed me to compare budget plans. The monthly rollover option is similar to YNAB. Support for both categories and tags makes it great at evaluating where we are doing well and where we are falling down on our plans.
While Moneydance does have direct download options for bank transactions, it failed to connect for several of my banks. But it failed as often as any other application I’ve tried. When it does work, it’s a smooth process and a super time saver.
The biggest issue with Moneydance is the occasional bugs. Updating budget amounts have occasionally changed the entry without notice. It can be a little awkward to navigate but otherwise has all of the features I want.
This is the most Mac-like app of the bunch. It’s simple and colorful.
Unfortunately, many of my ATM withdrawals were imported as income instead of expense. While I appreciate the wishful thinking, that created a lot of extra work. The import wizard is quite nice and managed to match existing categories and payees accurately. However, if you want to edit those after an import it’s very tedious and requires a pop-over and tab change.
I’m still using YNAB 4. It’s supported for bug fixes until 2017. But, I’ve begun transferring everything over to Moneydance which has proven itself as an easy to use and flexible budgeting system. Who knows, maybe it will even be better than YNAB 4 now that I’ve been forced to give it more time.
As someone that has recommended YNAB wholeheartedly to my friends, I’m disappointed. It’s turned a corner looking for subscription customers and I’m just not interested in following. I spend a lot of money on software (like in this post) and a lot more on privacy. It’s too bad that model wasn’t enough.