I recently hosted a Pre-Budget Prep Party and walked some lovely magical women through these steps! I decided to create a guide for others who might want to follow this, too, and for all my Money Magic Session students who need to complete this work prior to our time together.
So light a candle, set your intention, ground yourself, and dive into this money magic.
This exercise is a PRE-BUDGETING exercise. At it’s heart and soul, budgeting is a form of self-awareness and self care. It is about financial wellness if your currently money management strategies have not led you to a place of peace with money.
It is an exercise that will help you see how much you have been spending across all categories without having to type in a few hundred transactions manually. Budgeting, also known as creating and implementing a spending plan, would require looking at those numbers, also looking at your income versus expenses, assessing all of that, tweaking the targets, and then committing to a plan. We are not doing that here – we are JUST answering the question “How much am I spending in each category?” so that you can move on to the budgeting step next if your heart so desires.
YNAB is an amazing tool that I have personally used since 2014. It is meant to be used starting with the money you have in your account today, assigning each of those dollars a job, and continuing that process while moving towards some initial financial goals.
It is NOT designed to be used in the way I’m about to show you. But it is a better alternative (in my opinion) than pulling up your account statements and trying to do this manually or in a spreadsheet. This is just a pre-budgeting exercise. After you complete it, I have some next steps at the bottom, and meeting with a financial coach like myself is one of them.
For budgeting going forward, you would use this information in a fresh new budget though. Which leads me to my first point. Don’t try to make this perfect since this isn’t even going to be your final budget (aka spending plan). You are just using YNAB today as a tool – a very very fancy spreadsheet that can import transactions from bank documents. When all is said and done you will use this data to set category targets in a new budget. You don’t need to link your bank accounts at all right now.
First, you need to create a free 30 day YNAB trial. They don’t ask you for a credit card, so you aren’t going to get a surprise charge if you forget to cancel.
You will need to click through all of the initial set up steps they want you to do before you can start doing what I want you to do, which is semi-annoying, but you can do it 🙂 Just make up some numbers and click “next” until it leaves you in peace!
Now I want you to add an UNLINKED account for each account that you have spent money out of in the last 2 months. You don’t need to add accounts that are a bill, for example your mortgage, your car loan, student loan etc. You might want to on your real budget for for now it is unneccessary. These should be UNLINKED since you will be making a fresh new budget for your real budget going forward if you so choose later on. Save yourself a few minutes this way 🙂
Name it whatever you call the account in your own head. Your current balance does not matter right now (it will on your real budget), so just put whatever you wish it was (sneak in a little visioning and manifesting, ha)!
Now I want you to open your online banking portals for all of the accounts you just made. For each one you are going to click into the actual account where you can see recent transactions and find where it gives you the option to download transactions. Each bank is a little different but they all should have this option.
Some of them have a download button you have to click before it will ask you to the date range you want. Some want you to set the date parameters first and then hit download. You will want to download the transactions from the last full two months. So if you’re doing this on March 10th, I would recommend downloading January 1 – February 28, for example.
You will want to download in either QFX or OFX file formats which might be called Quicken or Money formats. This doesn’t matter (you won’t be opening them on your own computer) except that it will make it easier for YNAB to read the data for you in a few minutes. You can also use QIF or CSV if they do not have those as an option. You should also name the file whatever you named your account that it corresponds to to make it easier when you upload it in a few minutes.
I’m including a few images from a few different banks below to show you how this download option might look. I circled the download location in red on each of them.
Alright, you are making some serious progress! Now you are going to go into YNAB, click into your first account, and upload the corresponding file. It is super easy and I just have a few quick tips and images to share for ease.
Click “file import”. You can see my 5,000,000 here 😄
Then click “choose file”.
Then it should pop up a box that says how many transactions will be imported, and you need to click the checkbox I have circled in red.
Next you need to review the transactions that populated the box and make sure that it has a memo or payee that gives you an idea of what the transaction was – if it does not, you will need to try to download a different file type from your bank. I have not seen this happen yet, though, so fear not. You also need to double check that the outflow and inflow columns are correct, meaning they aren’t switched. That would make it look like all your spending was income, and vice versa. Glance down the rows and look for a few recognizable charges that you know are expenses, and make sure they are in the outflow column. If they ARE switched, there is a convenient little checkbox at the bottom of the window you can use to switch them.
Once you’ve imported the files for all the account you have spent out of in the last two months, you are done with the tech stuff, and just need to categorize now.
This is where it gets more personal, and more fun! Look through the pre-seeded categories that YNAB has in there for you, and delete, change or add ones that you need for you own unique situation. It doesn’t have to be perfect, and frankly, it won’t be! Just do your best, and acquaint yourself with what’s there.
Then go into one of your accounts (I would just start at the top and work your way down) and start categorizing! Any income is “Inflow: Ready to Assign”. I will show you how I do categorizing quickly in an image below. Also please know that as you use YNAB going forward (in a fresh new budget) you will have to categorize still, but it will remember what category you used last for that specific payee. This makes it really quick and easy to do. We only do it 1-2 times a month at this point, and did it once a week when we were just starting out.
To categorize quickly you click “this needs a category” and start typing the name of the category it belongs to. If you need to add a new category you just type in what you want the new category name to be and hit enter. If you already have the category in your list, you will type the first few letters, it will pop up as the only option, and you can simply hit Enter TWICE and then repeat this process for all transactions in your list. If you can’t figure out what something is within 10 second just leave it for now and come back to it later. There is a function to see only uncleared transactions which makes it easy to leave the hardest ones for last.
Here is what you can do with this information about your expenses and income!
Once all of your transactions are categorized, you can click into the budget view, and go to the months that you have imported transactions for – you will need to use the arrow to go back to see those prior months and the activity you just recorded. Under the activity column you will see what you spent in each category. At this point you have two options for moving forward with a real deal budget.
I am also offering Money Magic Sessions where I can help you with set up, strategy and maintenance of a budget/spending plan, along with diving deep into more spiritual and emotional aspects of money wellness. You can learn more here.