Organizing YNAB with Category Groups - No Accordion Binder Needed
Organizing your categories in YNAB - you either love doing it or hate it! I am firmly on the “love it” side of things but I am organized by nature. I love filing, labeling, purging, and ordering and this tendency definitely translates over to my electronic world and my YNAB budget.
I do understand that not everyone is like me. In fact, some of you may have rolled your eyes at that last sentence. That’s ok 😉 .
In this post, I’m going to present some options for how you can organize your YNAB budget categories. So whether you’re an organized nerd like me who jumped into setting up my YNAB categories with gusto and is constantly rearranging and refining them or if you’re decidedly NOT like that, this post is for you.
Before I start, in my last post, I used the analogy of old-fashioned cash envelope budgeting to explain how credit cards work in YNAB. If you haven’t read it (gasp!) it would be a great place to start because I’m going to get into a little bit more of the nitty gritty of YNAB in this post and will be using the same analogy.
A Dining Room Table, Cash, Envelopes, and Now an Accordion Binder!
I’ll do a little recap of my favorite analogy to start us off.
Let’s say you work every day for cash. You come home and dump your hard-earned cash on the dining room table. In YNAB, this is Ready to Assign. You have envelopes on your table that you’ve labeled with different jobs for your money. In YNAB, these are your categories. On the back of each envelope you’ve written how much money you would aim to or like to put in the envelopes each month. In YNAB, these are your targets. The money you actually have in the envelopes would be the amount in the available column in YNAB.
But you can’t really just have a pile of envelopes randomly scattered on the dining room table, now can you? I certainly couldn’t. The cash envelope budgeter would likely have some way to store and organize all of the envelopes so that you’re able to find the envelope that you need quickly and so that things stay tidy.
One of those accordion binders, the kind that you can open up like an accordion and with different sections that you can add labels to, would be great for this purpose. Something like this:
So you’ve decided to organize all of those envelopes and bought a fancy accordion binder. You then labeled all of the sections in the accordion binder with more general categories and this is where the envelopes live. Maybe one section is “monthly bills” and another section is “variable expenses”. In YNAB, these are your category groups.
Here are my category groups in YNAB as of right now - I change them frequently! Note the very exciting emojis 😁. I’ve collapsed them so you just see the names of the category groups and not the categories that are nested under these groups.
I like this set up as it's a mix of time-based (monthly, yearly) and theme-based (Christmas, Travel) and seems to fit with my life. But there are a lot of other options.
Options for Category Groups in YNAB
When you first set up YNAB there is a default category group structure:
Bills – Create categories for your monthly expenses.
Frequent – Includes expenses like groceries, transportation, and eating out.
Non-Monthly – Categories to break True Expenses (like holiday gifts, annual subscription costs, or car insurance premiums) into manageable monthly chunks.
Goals – Categories of expenses you’re saving up for, like travel, education, or home improvements.
Quality of Life Goals – Categories for hobbies, health and wellness, and entertainment.
These groups might be a good option for some folks but you definitely do not have to keep them. Each one is editable and you can easily create new ones. The beauty of YNAB is its flexibility!
Here are a few other options for category groups and who they might be best suited to.
Option 1: Needs, Wants, Goals (the 50-30-20 rule)
Who it’s good for: You want to marry the 50-30-20 rule with YNAB. Don’t know what the 50-30-20 rule is? Check out this post.
Needs (aim for 50%)
-Power (these are just examples of categories, add and remove as needed!)
-Rent
-Car Payment
-Internet
-Groceries
-Transportation
-Auto maintenance
-Clothing
-Debt minimum monthly payments
Wants (aim for 30%)
-Eating Out
-Hobbies
-Entertainment
Goals (aim for 20%)
-Extra debt payments
-Vacation
-Down Payment
-Investments
Option 2: Paycheck-based (or “Paycheque-based” for my fellow Canadians)
Who it’s good for: You aren’t a month ahead in YNAB yet and you’d like to designate certain expenses to certain paychecks. This works well if you are paid twice monthly. A bi-weekly pay period is doable but a little more complicated.
Paycheck 1
-Mortgage
-Internet
-Cell Phone
-Water
-Electric
-Groceries 1
-Gasoline 1
-Eating Out 1
-Transportation 1
-Her Spending Money 1
-His Spending Money 1
Paycheck 2
-Groceries 2
-Gasoline 2
-Eating Out 2
-Transportation 2
-Her Spending Money 2
-His Spending Money 2
-Debt Payment
-Home Maintenance
-Auto Maintenance
Other (usually longer term)
-Vacation
-Gifts
-Down payment
-investments
Option 3: Time-based
Who it’s good for: Anyone! This is a simple and easy to set up structure.You can set up your targets to match the time period.
Daily
-Coffee
-Parking
-Lunch
Weekly
-Groceries
-Eating Out
Monthly
-Power
-Water
-Cell Phone
-Rent
-Transportation
-Fun Money
Yearly
-Christmas
-Yearly Subscriptions
-Insurance
Long Term
-Vacation
-Investing
Option 4: Theme-based
Who it’s good for: Couples sharing a budget who would like to have separate category groups or those who would like to see all of the expenses for a certain thing together. For example, I recommend this set up for a divorced parent who might want to see all of the “kid” categories in one category group.
Necessities
-Rent
-Electric
-Groceries
Kids
-Clothing
-Activities
-Other
Car
-Payment
-Insurance
-Gas
House
-Insurance
-Mortgage
-Repairs
Partner 1 Spending Money
-Hobbies
-Work lunches
-Clothing
Partner 2 Spending Money
-Hobbies
-Work lunches
-Clothing
Conclusion
In conclusion, organizing your YNAB categories can be as simple or as detailed as you prefer, depending on your personal style and financial goals. Whether you lean towards a meticulous, theme-based approach or prefer a straightforward, time-based method, the flexibility of YNAB allows you to tailor your budget to fit your unique needs. The key is to find a structure that works for you and makes managing your money easier and more intuitive. So, embrace the options, experiment with different setups, and watch how a well-organized budget can transform your financial life. Happy budgeting!
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