How to Use YNAB’s Targets

Targets are at the heart of many successful YNAB spending plans. They let you decide ahead of time how much money each category needs, track your progress on financial goals, and get a big-picture view of how much money you need in a typical month. Once you start using targets, it’s hard to live without them!

Here’s what targets look like:

Targets in YNAB

Let’s take a closer look at these four categories:

  • Needed for Spending: Fund up to this amount, with the ability to spend from it along the way. Use it for: groceries, holidays, vacations, and oh snap—the new car savings!
  • Savings Balance: Save this amount over time and maintain the balance by replenishing any money spent. Use it for down payment, emergency fund, or a new technology replacement fund.
  • Monthly Savings Builder: Contribute this amount every month, no matter what, until you disable this target. Use it for: savings targets with an unknown target, like wish farm items, a vacation you hope to take “someday” or a set amount you want to save every month.
  • Monthly Debt Payment: Assign this amount for debt payments until you’re debt free! These work just like Needed for Spending targets, but allow you to pair the category with a loan account for additional tracking features. Use it for: Mortgages, student loans, car loans, etc.—any non-credit card debt.

That’s the quick overview. Now let’s take a look at each one of these a little more in-depth.

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Needed for Spending Targets

Use this target for your common monthly expenses like groceries, your cell bill, wifi, rent, etc. You set the amount to assign to the category, and you can spend in the category without causing the category to become underfunded (and turn that warning shade of yellow).

It gets even more dialed in. There are three frequency options for Need for Spending target:

  • Weekly
  • Monthly
  • Yearly
  • Custom

Here’s what Needed for Spending target might look like in real life:

  • Use a Weekly Spending Target to assign $40 each week to spend on dining out.
  • Set a Monthly Spending Target to assign $75 for clothing each month.
  • Set a Yearly Spending Target to assign $100 a month for your December holiday spending.
  • Set a Custom Spending Target for $250 three months from now when your quarterly water bill will come due. This target will break it out into its monthly cost. Perfect for saving money while spending along the way.
You can set a weekly target for things like groceries or dining out.

When you choose a Weekly or Monthly Needed for Spending Target, you can choose which day you’d like to have the target funded by (like $10 every Monday for the ol’ coffee category or $80 by the 15th of every month for the electric bill).

When using a Custom target, you can choose to repeat this target by a chosen frequency (like every three months for the garbage service).  

Or another example: let’s say you set a target to assign $1000 by December 24th for Christmas, and choose to repeat this each year. As you buy presents (it’s never too early to start!), you can spend from that category as you go. Set it to repeat and it’ll start the process over after Christmas.

Bonus: If there are any leftover dollars in a category with a Weekly or Monthly Needed for Spending Target when a month ends, they will contribute to the next month’s target once the month rolls over.

Pretty slick, eh?

Savings Balance Target

Yep, just like it sounds: a Savings Balance target allows you to set a specific amount to… wait for it… save in a category. You can choose a target date and YNAB will tell you how much to assign each month in order to hit it. Unlike Needed for Spending by Date targets, your spending does affect the total target amount. If you spend from the category before the date (or if you don’t assign enough to the category) YNAB will remind you to assign more in the following month to make up for the spending.

We see people using Target Savings Balance most often for things like saving for a down payment on a house, building an emergency fund, or maybe padding a new technology replacement fund. It’s best for savings goals where you want to keep the money around indefinitely (like an emergency fund) or for large, one-off purchases. You can choose to give it a date and we’ll break out the monthly savings required.

Here’s a Savings Balance Target in action – saving $1,500 by June of 2025 for a new laptop.

If you don’t choose a date, we won’t remind you, because hey, we have no idea what to remind you about. We’re not magicians, sadly. But we will keep track of your progress. So that’s the perfect tool for goals you can’t fund regularly but may throw some cash at from time to time. 

Monthly Savings Builder Target

Ah, the good old Monthly Savings Builder, by far the simplest of all the target types. This target will prompt you to assign the same amount each month, no matter what, until you disable it.

This is great for saving for things when you don’t have a specific number in mind, like stocking up your emergency fund, building up a home improvement fund, auto maintenance, or saving money for something like an HSA, IRA, or brokerage account.

And here’s the beautiful part—you can also spend from this target without causing the target to be underfunded. Think of it like this: you know your home needs some improvements and you figure it runs about $100/month—some months more, some months less. Say you want to add shelves in the living room this month: you can spend from this category without the category showing up as underfunded. And if your shelves only cost $40, you’ll have extra next month to grow over time for something bigger (like a new vacuum, or new landscaping).

Here’s a Monthly Savings Builder to save $100/month for home improvements.

Monthly Debt Payment Target

At face value, the Monthly Debt Payment target works exactly like a Monthly Needed for Spending target. You set the monthly amount and the date and YNAB will remind you to assign that amount every month. If you don’t use all of the money in the category, the amount that rolls over to the next month will count toward the target once the new month starts. 

But the awesome thing about Monthly Debt Payment targets is they unlock the ability to pair the category with a Loan Account, which include extra data visualization features and the Payoff Simulator, a sandbox that will let you dream a little without changing anything in your plan. If I make a one-time extra mortgage payment, how much interest will I save over 15 years? If I pay $100 extra every month on my car loan, how much faster will I be able to pay it off? Even if you’re not ready to pay extra on your debt, go ahead and use this target for your debt payment categories so you can easily unlock these tools in the future. 

The Payoff Simulator is pretty sweet!

Snooze a Target

We use targets to remind us how much we need in a category in a typical month. But not all months are typical. That’s what the Snooze a Target feature is for! If, for any reason, you don’t want to fully fund a target this month, you can snooze it to remove the yellow underfunded alert until a new month begins. This allows you to pause a target without removing it completely. 

We see people use this most commonly in the middle of the month. If you move money out of a category to cover overspending or fund a higher priority, the category’s available amount will turn yellow to warn you that it is underfunded. Even if you fully funded the target at the beginning of the month,you’ll still get that warning when you make a change, so the Snooze feature is perfect when that happens. 

Other times, you just can’t fully fund a target this month, either because your income was lower than expected or because a higher priority took preference. Snooze that target so you don’t get the constant underfunded alert, and you’ll get a reminder to try again next month. If you consistently can’t fund a target, it might be a sign that the category is not a priority or the amount is unrealistic. In that case, consider changing the target more permanently. 

With these four target types, you can capture and slay every bill and expense while making those financial dreams come true.

Cheers and happy YNABing. 

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How to Use YNAB’s Targets