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Better Budgeting Software: YNAB or Quicken?

I recently received an email from Reader Donald asking if I could do a direct comparison between You Need A Budget (YNAB) [3] and Quicken [4]. Having recently used both to write a YNAB review [5] and a Quicken 2010 review [6], I was familiar with both and could easily share my thoughts.

To add a little color to the discussion, which I hope you’ll join in on, is that Donald does his taxes using TurboTax and the potentially seamless integration of Quicken and TurboTax [7] “hobbles” him from buying YNAB. Also, he has yet to take advantage of the 7-day free trial of YNAB (no email or registration required for the trial, you can download the application here [8]). Finally, he does all his banking with a regional credit union in California and being able to pull banking records is an important feature.

Money Management vs. Budgeting

I have always seen Quicken as a full scope money management application and YNAB as primarily a budgeting tool. Quicken has introduced some budgeting features, such as scheduling bills and billpay, but the strength of Quicken is in all aspects of money management – from banking to investments to credit to future planning. Quicken does have budgeting features built in its Planning tabs, categorizing your spending and helping you review your cash flow. However, Quicken offers a ton of features, built up over the years, that makes the learning curve much steeper than a simpler tool like YNAB.

YNAB is not a full scope money management tool, it’s focused on budgeting, getting you off the paycheck to paycheck cycle, and that focus makes the tool very easy to pick up and use. I have yet to see the features being rolled out in version 3.0, but when I saw version 2.0 I was able to figure out what to do without navigating any help menus or being confused.

Better Budgeting Software: YNAB

Donald wanted to know which budgeting software was better and I believe YNAB is. I like their methodology for getting someone off the paycheck to paycheck mentality and I believe that methodology separates them from the competition in the budgeting software world. I think even the Quicken folks would agree that YNAB is better for budgeting.

However, if you want a full featured money management suite with the ability to pull data from various accounts and give you an executive summary, YNAB can’t do that. YNAB wasn’t designed to do that, only Quicken can. (in fact, they make a good case for pulling spending data manually, it makes you closer to your budget) I mentioned it in my review but Quicken’s ability, once you set it up, to give you your entire financial picture in seconds (a few minutes if you have to pull the data) is extremely valuable and one of the reasons why I climbed the learning curve to set it up.

TurboTax Integration

Since this is my first year using Quicken, I don’t know about theTurboTax integration and how helpful that will be. I do know you can categorize expenses as being tax deductible and I imagine that can be exported to TurboTax, but I haven’t used it yet. I’ve also been a little lax in categorizing expenses, so that might come back to bite me.

I’m curious to hear your thoughts on both YNAB and Quicken, on any of the topics Donald was interested in. If you’ve used Quicken for years and have a better feel for the budgeting features, please share your thoughts because I may not be doing them justice. If you have insight into TurboTax integration or some other features I skipped in either package, please let us know in the comments!