It does support track the bank transactions. but I don't recommend it, since by entering transactions, you will realize how much you'd spend in your budget to the category.

You could do it on paper. and carry it in your pocket all the way. There's no difference in terms of managing transactions. But you could be easily loose the track of your budget in my opinion. YNAB helps you to keep remind the budget. That is the key for me to keep using YNAB.