I've used Your Need a Budget (YNAB) for quite a while. I found it to be the best budgeting tool I've used.

Recently, I discovered YNAB Reports. It was great to dig into the data and see how things changed over time.

But I noticed that to get the most out of YNAB Reports you need to have stable and well-organized budget categories to get a good sense of the data. Otherwise, it is harder to see patterns and extract useful information on your spending over time.

The best budgeting system, in my opinion, makes it easy to account for each dollar, allowing you to see how your spending/savings changes over time, and shows you the percentage of your income spent on each budget category.

Why do YNAB budget categories matter?

When you are trying to reduce overspending, you need to be able to see how your spending has changed over time easily.

YNAB implements a zero-based budget, which means you assign every dollar to a budget category. This budget method is great, as you can shift funds from one budget category to another, and you ensure you are accounting for every single dollar that comes in and goes out. But using a zero-based budget doesn't have an automatic way of seeing how your spending has shifted over time.

In addition to the above, over the years our category amounts have changed. It would be great to see how our budget changes over time and if we are spending/saving our money in a way that matches our long-term financial goals.

We have changed our budget categories over time slightly. I was in the habit of creating temporary vacation categories that I would then hide after the vacation was over. This didn't seem like a problem until I took a closer look at the YNAB Reports section.

I also noticed that since we were combining everything we get at the grocery store under our “groceries” budget, it was hard to tell how much was spent on food.

I feel guilty that I haven't spent as much time thinking about our YNAB budget categories. Looking at it now, I should have started using YNAB Reports from the beginning.

It's not that our budget categories were terrible, or that we weren't accounting for all of our spending. But there is a ton of room for improvement in making our YNAB Reports kick some major budget ass.

Ultimately, I want to make it easy to do the following:

  • View how much we were able to save/invest every month, based on a percentage of our take-home pay.
  • See trends in our spending, like on groceries and dining out.
  • Improve our organization of category groups to see how spending has changed over time.
  • Understand what percentage of our budget goes towards things like housing, food, etc.

Category Groups vs. Categories

When you are on the budget section of YNAB, you will see your budget categories sorted into category groups. Ever since I started using YNAB, I thought this was solely meant to improve how your budget looks from that section of the site.

It turns out these category groups make it easy to see trends in the YNAB Reports section.

I set up most of the category groups and budget categories a while ago, and haven't given much thought to changing them. They worked as far as our general budget is concerned. But I want to take our budgeting to the next level, and YNAB Reports is the path to the promise land.

The default category groups YNAB creates are pretty solid and will work in most cases.

However, to make the YNAB Reports as useful as possible, I want more category groups with more budget categories. This will take more time to set up and slightly more time to do the budget. But the extra time is worth it for being able to see more budget spending patterns.

YNAB Budget Structure

When thinking about the optimal YNAB budget structure, the main thing I thought about was which YNAB budget categories have the most chance to fluctuate from month to money. Or which budget categories are we using most of the time when we go shopping.

I want the categories that have the highest risk for overspending to stand out in the reports.

It is true that you can drill down into each category group, to view the budget categories in most YNAB Reports. But having more YNAB category groups makes it easier to see specific spending trends in the reports. On the YNAB blog, they published an article that talks about this.

I also wanted to segregate things in a way that would allow me to see how much of our income is going towards certain category groups — for example, quickly seeing what percentage of our take-home pay goes towards our mortgage payment.

Here are the YNAB budget category groups and budget categories I ended up landing on. For some of the categories, I included a description of how they are used.

  • Housing
    • Home: Mortgage/Rent
  • Essential Bills
    • Insurance: Car Insurance, Life Insurance
    • Utilities: Water, Electricity, Gas, Trash, HOA
  • Services
    • Internet
    • Phone: Cell phone service.
    • Media: TV + Music Services
    • Gym
    • Other Services: Amazon Prime, Personal Site Hosting, Costco, etc.
  • Food
    • Groceries
    • Dining Out
    • Kid School Lunches
    • Puppy Fund
  • Allowances
    • Chris Allowance: Discretionary spending.
    • Andrea Allowance: Discretionary spending.
    • Kids Allowance: Discretionary spending.
  • Date Nights
    • Date Night
    • Kid's Date Night
  • Regular Expenses
    • Toiletries & Cleaning: Toilet Paper, Paper Towels, Shampoo, Conditioner, Soap
    • Clothing
    • Home Improvement
    • Fuel
    • Auto Maintenance: Oil Changes, Car Repairs
    • Medical
    • Birthday Party Gifts: Our kids go to a lot of birthday parties!
    • Gifts: Birthdays, Holidays
    • Giving
  • Safety Net
    • Rainy Day Fund: Funds available to cover small overspending, if needed.
    • Emergency Fund: Stored in a separate savings account.
  • Long Term Savings
    • Vacations
    • New Vehicle: Saving to replace our vehicle.
  • Investments
    • Blog: We consider money spent on maintaining Money Stir as an investment.
    • 401K Contribution
    • Kids Education
    • Roth IRA
    • Taxable Investment Account
  • Wish Farm
  • Wish List

Most things are self-explanatory. But then there are the “Wish Farm” and “Wish List” category groups. This was inspired by another YNAB blog post here.

The general idea is that if there is something you want to save for, like a specific vacation, TV, desk, etc. you can create budget categories for these under the “Wish List” budget category group. When you are ready to start saving for that item, you move that category under the Wish Farm category group and start stashing away money there.

The key to having this not make your reports screwy is you use these wish list categories only to save money. When you spend the money, transfer those funds to the correct spending category. That way your reports stay clean and organized. You can then hide the wish budget category when you are done with it.

Think of these wish list budget categories as a way to handle sinking funds.

a fund formed by periodically setting aside money for the gradual repayment of a debt or replacement of a wasting asset.

Definition of a sinking fund

Why so Many YNAB Budget Categories?

It comes down to optimizing how well YNAB Reports shows you the big picture of your spending, in a way that is most useful to you.

You might want to organize your budget categories differently, and that is okay. There is not one right way to do this, but you will want to think about what information is most important to you when working through your YNAB Reports.

In my case, I wanted to be able to answer the questions below:

  • Are we not budgeting enough for groceries in our monthly budget?
  • Can we save money on our cell phone service?
  • Is our vacation fund growing too large?
  • How much of our after-tax income is being used in the Investments budget category group?
  • Do we continually overspend in our allowance or date night budget categories?
  • What percentage of our take-home pay our we spending on Food? What about Allowances, Housing and Date Nights?

I know that having 34 YNAB budget categories seems excessive, and it will require extra set up time. But once you get them set up, most transactions should get auto-categorized properly, and it won't take much time to manage your budget.

The one complication is when going to the grocery store. Sometimes we will pick up toiletries or cleaning supplies on the same transaction. In that case, we need to separate the transaction into multiple budget categories manually. Remembering to do this is a pain, as you have to either manually make a note right after the purchase, or save the receipt for handling later. But I think the time is worth it to get a better sense of how much we are spending only on food vs. toiletries.

We will probably tweak how things are organized over time. But I want to start using this new budget structure ASAP so that we can benefit more from our YNAB Reports.


I've known about YNAB Goals for a while. But I have never used them. Once I looked into what they are and what they can do, I realized that I should have been using them a long time ago!

YNAB goals offer a level of accountability in pursuing your financial goals.

There are five types of YNAB goals: three goals specific to spending budget categories and two goals targetting credit card categories.

The great thing about setting up YNAB budget goals is that it can make managing your monthly budget easier. Take a look at the YNAB Creating a Budget Template documentation page to see the power unleashed with YNAB goals!

YNAB Spending Budget Category Goals

There are three types of spending budget goals you can create. Two of them deal with setting a budget category goal amount (one of which is based on time). The third type of goal is setting a monthly goal amount, which is great for the YNAB budget categories that have a fixed amount every month (like our mortgage).

YNAB Credit Card Budget Category Goals

If you are trying to become credit card debt free, you have access to two credit card goals. The first is setting a date when you want to pay off your full credit card balance. The second goal allows you to set aside a certain amount every month to pay down that balance.

I'm excited to assign a goal on most of our budgeting categories. This should save a ton of time setting up our monthly YNAB budget, and we can even set up goals for our investment budget categories.


YNAB is the most powerful budgeting tool I've used. It does cost money, but it gives us the peace of mind knowing that we are on top of our finances. And it allows us to make sure our spending and savings align with our financial priorities.

Spending time thinking about how you organize your YNAB budget categories can make it easy to track how your spending has changed over time using the YNAB Reports. It becomes easier to see if you should cut spending in specific budget categories and if you are hitting your saving goals.

Setting up budget category goals can make sure you cover all your monthly bills, and you can more easily define how much you have available to spend each month in your YNAB budget categories.

YNAB is not a set it and forget it budgeting system. You need to get in there and make sure you are accounting for all of your spending to avoid credit card debt. Thinking through how things should be organized will allow you to make better use out of the YNAB Reports area.

How do you organize your budget categories in YNAB? Do you think I went overboard with how many budget categories we are using?