Wednesday, February 27, 2013

YNAB vs Quicken 2014


While on the surface YNAB and Quicken do the same thing, help manage your money, but that is where the similarities end.

YNAB is a purely devoted budgeting system. It does have some report abilities, but its primary goal (which it does flawlessly) is to manage cash flow. Remember, like businesses, cash flow is the life blood of a family's finances. To sum up the importance of cash flow, I like to quote Frank Hebert' Dune: "The Cash Must Flow"

YNAB cost 60 dollars to purchase (you can buy Quicken Deluxe for the same price). What you get is a program that does not have a sunset policy (Quicken expires after 3 years), and a program that comes with a unique money philosophy.

The philosophy tries to move the family from the paycheck to paycheck lifestyle to a living on last months income for the current months expenses. This is done using a buffer, as the YNABers call it. This buffer tends to be the most confusing part of the philosophy; however, once you move past the initial confusion, you are left with a wonderful budgeting tool.

But let me say it again, YNAB is a budgeting tool that only works as long as you follow the system the developer created. How YNAB tracks your money is similar to any financial software. Just don't expect fancy reports outside of a few basic ones they provide, but in all honesty, how many reports do you really need for your personal finances?.

Quicken is for people who want to manage there money on a level that businesses do. Other than spending reports, net worth, and spending analysis that YNAB offers. Quicken tracks taxes, investments, business expenses, run financial scenarios  analyze loans, track mortgage interest, and the list goes on.

While it might be easy to say that one may never need these abilities, I would disagree. Personal finance is all about knowing what your money does. YNAB gives every dollar a job, but lacks the ability to track and analyze how those dollars work. Quicken takes the past to create reports to see where you've been, but lacks the ease, flexibility, and forward thinking that YNAB offers.

The end decision is simple. When it comes to YNAB vs Quicken the choice is clear. Get both ideally. If you cannot afford both. Buy YNAB ($60) then save up to get Quicken (buy at least the Deluxe version). Use YNAB to manage your budget, and use Quicken to run reports and track taxes, investments, and analyze future financial scenarios that may impact your life.