Thanks to services like Mint and You Need a Budget, it’s so easy to get a handle on your finances that it makes you wonder how anyone got by with simple spreadsheets. Today, we’re comparing the two in order to find out who can benefit most from each.
Mint and You Need a Budget (YNAB) are the two biggest standouts when it comes to managing your finances. Here are the basics on each one:
- Mint (Free): Mint is your favorite budgeting service by a wide margin. You can log in and connect your financial accounts from most major financial institutions including banks (like Wells Fargo, Chase, etc.), investment accounts (Fidelity, Personal Capital, Betterment, etc.), credit cards, and more all to get a big picture view of your financial life.
- You Need a Budget ($5/month or $50/year): If you like a much more hands-on approach, YNAB gives you the tools to get up close and personal with your money. YNAB bills itself as helping you find wasted dollars in your budget that you may not even have known you had. Rather than automatically categorizing your transactions, you import them at the end of each day and categorize them manually. This helps you stay disciplined and keep focused on your spending, and stick to your budget.
Both services have apps for the web, Android, and iOS, so you can access your account from nearly every device you own. They also connect to external accounts, which means you’ll be trusting them with your login information for financial institutions. However, you can read about how Mint protects your information here, and how YNAB does it here.
Mint Tracks Expenses Automatically, YNAB Makes You Account for Every Dollar
Mint’s approach to budgeting is about as hands-off as you can get. During your initial setup, you’ll need to specify your monthly budget categories. While you can create categories for every dollar you spend, in my experience it works better to track your variable expenses like eating out or gas for your car. Rent doesn’t change month to month, but you could probably use help tracking how much you eat out. For example, you can set aside $150 every month for restaurants. Every transaction that’s tagged as dining out will automatically fill your budget bar, as seen above. Mint will send you notifications when you approach or exceed your monthly budgets. It’ll also try to tag your transactions, but you can edit the tags manually to make sure each transaction comes out of the right bucket.
YNAB takes a broader approach. Rather than trying to guess your expenses ahead of time, you start with how much money you have when you first set up an account (so maybe begin on payday). From that day forward, you can import your transactions at the end of every day and manually categorize them. The app won’t automatically import and tag your transactions unless you ask it to. Then you can schedule recurring transactions that you know will occur (like rent or utilities). With YNAB, you need to account for every single dollar, otherwise known as a zero-sum budget. More importantly, it only deals with money you have right now. Rather than trying to forecast your budget, it forces you to deal with your immediate transactions first and adjust over time.
In my testing, I found YNAB to be harder to deal with up front, but it got better over time. If you’re used to writing down your monthly income and subtracting your monthly expenses, both will feel a little weird. Unless receive your entire month’s income at once, Mint and YNAB require a little time to get the rhythm of your expenses. However, that’s largely in the details. The broader distinction between the two is how much effort you want to spend managing your budget. Mint allows you to keep track of your variable expenses with minimal effort, while YNAB is better at forcing you pay attention to every penny.
Mint Has Powerful Tools to Set Up Long-Term Goals, YNAB’s Are Limited
If you have long-term financial goals, like paying off your debt, buying a home, or saving for retirement, Mint offers tools to help. One helps you set up an emergency fund that will automatically calculate how much you need to save to cover a few months of expenses. Another tool creates a month-by-month plan to pay off your credit card debt. Mint’s goal tools are incredibly robust and help you take a lot of the guesswork out of planning for your financial future.
YNAB takes a much simpler, but also less intuitive approach to setting goals. There are three main goals you can create. They have pretty opaque names and it took me a minute to figure out what they do. Here’s what YNAB calls its goals and how to use them:
- “Target Category Balance”: This option allows you to set a specific amount of money you want to save for a goal you want. So, for example, say you want to save up $1,000 for a new TV. Each month, you can set aside however much you want to go towards that goal. If you can set aside $50 one month and $500 the next, this tool will let you do that.
- “Target Category Balance by Date”: This option is like the previous option, but with an added due date. It will automatically calculate how much you need to save each month to meet a specific goal. For example, if you want to save $1,000 for a trip you plan to take next year, YNAB will tell you how much to allocate out of your budget each month to reach that goal in time.
- “Monthly Funding Goal”: This method allows you to choose how much of your paycheck you want to set aside each month without setting a specific goal amount or timeline. For example, you can save $500 every single month from now until you change your goals, to set aside for investments. Since you’re not going to stop saving once you reach a target amount, this option gives you the flexibility to focus on budgeting your monthly income.
Because YNAB’s goal features are so bare bones, you’ll need to do the mathematical legwork yourself. For example, if you want to pay off a credit card, you’ll need to calculate how the interest will affect your payments yourself.
Mint is a lot better in this area. With YNAB, you’ll still need to hunt down things like interest calculators somewhere on the internet anyway. While making users do the math themselves is fine for discipline, YNAB’s service didn’t just skimp on the automation, it’s outright missing useful tools that Mint has. However, all that means is a little extra googling, so it might be worth it for you if you don’t want or need the hand-holding.
Mint Shows Your Overall Financial Health, YNAB Focuses On Your Monthly Budget
Mint allows you to view all of your personal finance accounts in one place. You can connect your mortgage, car loan, credit cards, investment accounts, plus assets like your home or car. You can use all this information to see your total net worth, examine where you’re spending your money, and compare the interest rates on your credit cards so you can decide which cards to pay off first. Mint also offers free periodic credit score checks. This feature not only shows you what your credit score is, but it breaks down which factors are affecting you the most.
By comparison, YNAB offers virtually nothing outside of managing your monthly budget. If you want to create a goal for paying off debt or saving for something, you have to do it manually (as per the previous section). If you want to know your net worth, you’ll need to calculate it yourself. This is by design. YNAB is based on the principle that the best way to manage your money is by dealing with it directly. The less automation, the better.
If you prefer YNAB’s philosophy of making you get up close and personal with your money, but you still want the high-level view, you can pair the service with Betterment. Betterment allows you to integrate your accounts to see your net worth just like Mint, but without the budget tracking. The two compliment each other without overlapping too much.
The Bottom Line: Mint Automates Your Finances, YNAB Gets Hands-On With Your Money
In my experience, Mint is best for people who want to automate their finances. It’s best for people who are too busy to calculate every penny, but could use a notification when they’re about to exceed their fast food budget. It’s great for people who want to know keep an eye on their investments, or how fast they’re paying off debt, without having to pull out a calculator every time to do it.
YNAB is best for people who want to budget meticulously and intentionally. Since you have to manually import transactions at the end of each day, YNAB isn’t very forgiving if you stop paying attention. It’s great for people who have very rigorous habits and want a tool that will let them manipulate the fine details.
Whichever way you decide to go, both are powerful budgeting apps. They’re just for very different people. Think of Mint like a personal finance advisor. You supply it with all the information you can and it will give you advice on broad strategies you can take to improve your finances, and it will let you know when there’s a problem. YNAB, on the other hand, is like a notebook and a pen. All the responsibility of balancing your budget is on you, but if you use it diligently, you’ll be on top of your finances and better for it.