I earn a fairly decent salary. Using the http://globalrichlist.com shows that I am in the top 1% richest people in the world by income.  So things should be okay, right?

Well, no. Each year I struggled to makes ends meet. I budgeted rigidly and allocated all my spending into a number of buckets. I had a spreadsheet with lots of columns and measured my electricity down to the kilowatt. I had multiple bank accounts for different categories and put money into each of them after it arrived in my main account. Yet each year I seemed to be worse off.

Where did all the money go?  I don’t smoke, drink heavily, nor gamble. Reducing subscriptions to only two magazines and a programme of reduction in insurance costs helped a little. Getting rid of fixed telephones and using VOIP through my broadband was great. Curtailing long holidays overseas helped but even without taking any holidays away from home for five years it did not stop the slide. If the motto of thrift is ‘to live below your means’ I obviously wasn’t getting it right.

Until I started using the excellent YNAB program I didn’t know how much I spent on different categories – for example I now know that I spend around £40 per month on electronics. That may sound high but it includes single-board computers like the Raspberry Pi and controllable lighting which reduces my electricity. As this is almost my only hobby except for reading I don’t think it is so bad. But until I recorded everything I spent over a year I had no idea it was so much! What YNAB has done is allow me a way to allocate every penny I earn into a budget category and then record each and every purchase against one of those categories throughout the year. It wasn’t even painful as I used my phone app each time I spend money.

Actually, maybe I am a whole lot better off than a lot of people, and should be thankful for what I do have – my salary is better than the average UK salary of around £25,000 and many other people live in more straitened circumstances. While I do support 4 adults off that income, I also get to spend on some things that bring me pleasure, and enjoy watching three other people live life to the fullness of their ability.