you need a budget uk

You Need a Budget UK (yes you do)

As I alluded to recently we budget. Telling people that you budget is an invitation to be pitied. Let me tell you that it’s definitely the other way around. I have never felt more secure or clear about where my money is and what it is working towards.

The word budget has negative connotations associated with it. People assume a budget means going without, you are sacrificing your spending to do boring things like save for a rainy day.

It’s really not about that.

Ever wondered why you seem to be earning a decent wage but you never have any money for the big stuff? Why you constantly dip into that rainy day fund? Why you are always caught off guard by the birthdays and the car and the water leak?

I haven’t always been great with money. Actually I was terrible with it for a long time. Not planning more than a month ahead and spending money that I didn’t have. Eventually, I had to dig myself out of a hole.

Having a budget and sticking to 4 simple rules really helped me out. Helping me not only get out of that hole but also to start having a much healthier relationship with money. Now I live in my dream house, go on holidays I never thought I would and money is never a worry and to be clear, I’m not rich by any means.

YNAB also plays a critical role in our blended family finances. I have never been more happy or comfortable with my financial situation.

You Need a Budget UK!


Steam is an online store for your computer. It mostly sells games and that’s what I used if for. It’s pretty well renowned for having large sales. On the 27th August 2013, I was perusing such a sale when I happened across an application called “You Need a Budget” or YNAB (why-nab) for short.

I’m not being hyperbolic when I say that YNAB has had such a profound impact on my life that I will never forget that day.

As a piece of software YNAB allows you to budget your money into customisable virtual envelopes of sorts. Think groceries, car maintenance, bills and anything else you want to track or save for. You assign your money to these categories and then you spend that money. You can use your phone to add spending on the go so that your categories are up to date and you know exactly how much money you have left. The phone app is intuitive and makes it quick to add your spending and check your balances.

This is a critical point to note, once you have budgeted, once those virtual envelopes have some virtual cash in them, it’s important that you know how much you left in them after you have spent money. It takes around 30 seconds to grab my phone at the checkout, add in the spending and boom, my categories are now up to date. When Nicky then pulls out her phone to see how much money is left in our groceries category (hint – its almost never enough) she knows how much she can spend.

So far so simple.

It has some other nifty features like being able to add goals (think putting aside enough money for Christmas\birthdays\holiday without having to do the math), reports and automatic imports from your bank (US banks only).

It’s a really good system (that has since moved to the cloud) and it works astonishingly well. Intuitive to use and pretty to look at, it ticks all the boxes for a modern piece of software.

As lovely as it is, YNAB would not be where it is today just based on its software. What really sets YNAB apart are its 4 rules. A methodology if you like. It’s a way of working and maximising the money you have and how to live with a budget day to day.

You can find out about the four rules for free. They aren’t locked behind a paywall (YNAB is SaaS, Software as a Service. You pay monthly or yearly for access). That’s the first sign that YNAB is something special and the company behind it are good people. They give you the knowledge and teach you everything you need to know about setting up a kick-ass budget for free.


This means if you want to take their years of budgeting expertise and do it all in a spreadsheet for free then you can. I mean you’d be crazy if you did. There are lots of things we can do in this world for free if we spend more time doing it. How much is your time worth? It’s time you can’t ever buy back. The amount of time you save with using the application is worth the price of entry alone. That’s $11.99 a month (cancel anytime) or $84.99 a year. Dollars only I’m afraid but don’t let that put you off if you don’t live in the U.S of A.

OK, back to the rules. YNAB has done a great job of explaining them and giving you plenty of tips and tricks. I’m not going to recreate that here. I’ll give a brief outline and talk about what they actually meant for me.

#1 Give every dollar a job

Exactly what it says on the tin. Give all your money a job. Down to the penny. You need to prioritise where your money is going. You aren’t going to reach your goals or hit your targets if you are spending money on things you don’t prioritise.

This is the fundamental core of having a budget.

Give all your dollars a job. A critical component is to budget to zero!

Before you embark on this journey I implore you to sit and really think about your goals, your hopes and your dreams. When you budget you can then do it with them in mind. Have a category for that dream holiday/house/car/thing. Start working towards that dream.

A generic “savings” category is a sure-fire way to spend that hard-earned and hard saved money on stuff, not the stuff of your dreams but just stuff. Stuff you don’t need, stuff that will be in the back of cupboard or bin in 6 months time. A savings category with no goal is essential a late-night whim pot.

That looks nice.

I could really use one of those.

The money isn’t actively working towards anything. This works the same if you don’t budget every penny. There is “floating” money around that has no purpose and is liable to be spent on garbage you don’t need.

Budget everything, make your money work for you.

This rule also brings complete clarity. It will show you where your money is going. Let me tell you that holding that microscope up to your spending habits might not be easy. It might be painful and it might be embarrassing. But push through it. Be honest with yourself and your partner if you are doing this together.

#2 Embrace your True Expenses

This was a game-changer for me and yet it’s so simple. We all know that we have expenses coming up. They might not be this month, they might not be next month but they are coming.

Car repairs, Christmas, birthdays, insurance premiums all those things that creep up on us and catch us out. They really shouldn’t though. In reality, we know they are coming, we just choose to do nothing about it.

So budget for these true expenses. Work out how much you spend at Christmas and in January (yes January!) start putting away 1/12 of that amount every month. When Christmas comes around you can spend, safe in the knowledge that the money is there. You worked hard. You budgeted for this and you can now spend guilt-free.


I want to tell you now that the feeling when something comes up and you can just pay for it, in cash, feels wayyyyy better than any drunken late-night Amazon spend with money you don’t have.

It’s just common sense mixed with a bit of planning.

I can tell you right now, in March, and we have the following in various pots:

  • £300 for next years school uniform
  • £891.98 spread across multiple pots (21 for birthdays, 4 for fathers day and mothers day etc) for gifts
  • £333.16 for Christmas

I just paid almost £250 for new car tyres. The money was there just waiting to be used for that purpose. I didn’t even have to think about it.

I’m crushing being a grown-up.

#3 Roll with the Punches

So you sit down once a month and budget.

That’s great, go you. Let me tell you though, life isn’t going to stick to your budget. It’s going to sling shit your way. That shit isn’t going to have formed part of rule 1 or 2 because you don’t have a crystal ball.

You aren’t going to stick to your budget 100% either. You just decided “fuck it” and ordered a pizza you haven’t budgeted for because……well…

Roll with the punches, budgets aren't set in stone. You Need a Budget is about being flexible.

This does not make you or your budget a failure. It’s going to happen. Almost every month. Get over it.

Your budget is a living document, it’s not set in stone. So you roll with the punches.

So you ordered that fuck it pizza. It tasted great. Now you need to move £20 from somewhere else to pay for it. That’s fine, no problem. So you might have to wait a little longer to buy that other thing. But that’s ok. You made a decision and moved some money around and the world is ok again.

The fact that you had a budget in the first place enabled you to buy and enjoy the pizza knowing you had the money.

#4 Age your money

This rule is about security. How would you feel if you could already cover next months mortgage/rent payment today? How about 3 months? What would it feel like if you could cover 6 months bills without worrying about it?

It would feel great right?

Using the previous 3 rules you should be consistently spending less than you earn each month and be able to get your self ahead. No-one knows what is around the corner. Being a few months ahead of your bills would be a huge stress reliever.

I have to say that we are not there yet. We have a 1-month buffer and that feels good. One of my goals for the next year is to get to a 3-month buffer. Having a budget means I know exactly how much my bills cost me each month. Right now I have other priorities but writing this is making me think perhaps I shouldn’t.

You Need A Budget UK

So, the software is made in America and can only be purchased using US dollars. The only difference between using YNAB in the UK is that you won’t have access to an automatic bank transfer. That is your spending won’t be automatically reconciled with your bank because only U’S banks are supported.

Remember putting all that spending in via the phone app? You then need to reconcile that with your bank statements to ensure that you didn’t forget anything. If your bank balance is wrong in YNAB then your category balances won’t be correct and you might spend more than you have. Don’t worry if this all sounds complicated, it isn’t, it becomes second nature quite quickly.

You will forget to add some spending via the app from time to time, it’s not a major issue but you do need to catch it so that you can be confident the balances in the app are correct. Reconciling prevents this from happening.

I’m actually going to argue that not having the auto transfer is a good thing. If you reconcile manually I think you have a greater connection to your money, a greater insight into what you are spending and where. I reconcile almost every day. It’s the first thing I do when I sit at my desk. It takes less than 5 minutes and it makes me feel really close to my money. I reconcile as part of my morning routine, the birds sing a little louder, the sun shines a little brighter, it’s something ticked off my list before 9 am. It’s part of me crushing it before work has even started.

I don’t think I would use auto bank transfer even if I had the option too.

Make a change. A big one.

If you don’t currently budget then it’s difficult to see how it can change your life. But it can. Completely.

I am not understating it when I say that YNAB and budgeting has had the single biggest impact on my adult life. You see its not just a piece of software. The ethos and thought behind the methods and the company lead you down a path to further personal growth. Forcing you to question more than just your financial situation.

I’m no longer worried about money and I preach the YNAB gospel to anyone who is willing (or needing) to hear it.

Last week a friend of mine was almost proud to tell me he had found a monthly charge that he didn’t know about and cancelled it. He no longer needed whatever service he was paying for. Now he was £20 a month better off.

How scary is it that there are people out there who don’t know what money comes in and out of their bank account each month?

That isn’t something to be proud of.

I urge anyone out there to gain clarity and control over their money. Lose those demons in the back of your mind, the dark cloud that keeps you awake at night. Start working towards complete financial control. It’s one of the best things you will ever do for your family.

make a change - start budgeting today and shed those money worries!

YNAB even give you a 34-day free trial (that’s just over 1 month so you can try it for 2 paydays). You have nothing to lose.

For complete disclosure one of the following links is a referral link. If you use it to sign up to YNAB then I get a free month at no extra cost to you. I also provide a link that is not a referral link, its just direct to the YNAB site. You decide if I get paid for this article or not. 😊

Get YNAB! (free month for Lee)

Get YNAB! (no referral link)

If you are starting on this journey then I would highly recommend checking out the Ultimate Starting Guide and subscribing to the podcast. It’s a 4-5 minute weekly nugget of wisdom from YNAB’s creator, Jesse Mecham.

Jesse has also written a book on YNAB. It’s ace. You can buy it from Amazon here. If you use that link I get a small commission at no extra cost to yourself. This one is direct to Amazon.

Questions and Answers

I have become the oracle of YNAB with my friends and family. When they finally realised what they were missing/tried it to make me shut up I got lots of questions. Some of them were similar in nature and some were barriers to people actually starting a budget.

Will having a budget make me feel like I have no money?

In all probability yes. But only in the short term and here’s why.

If you don’t currently budget you probably do some mental math on payday that goes like this.

£1000 in and I know my bills are £750. Awesome. I have £250 to spend as I wish!

With YNAB it will go like this.

£1000 in and I know my bills are £750. Its also my Mums birthday next month, my Dads in 5 and Christmas in 9. My car will probably need some new tyres before winter. So after budgeting for all of that I now have £50 as disposable income.

But guess what? When those birthdays, Christmas and car repairs come around you have the money to pay for it. No need to panic, no need to borrow.


You will feel a little short of cash initially. But in the long run, you will feel much better off. Both in an actual cash in the bank sense and a mental wellbeing sense.

What if I like having a coffee every day, are you telling me I can’t have a coffee every day???

I’m not telling you that you have to do anything with your budget. I think you are telling yourself that.

If you don’t budget this trap is easy to fall into.

On the way to work, I like to buy a coffee. It’s £3. A little present from me to me. It’s only £3.

When you budget you start to have real visibility and clarity over your money and what you want your money to do.

£3 every working day over a month is roughly £60.

When you sit down at the start of the month you need to make a conscious decision about spending £60 on coffee. It’s a cold hard slap in the face. One that is going to happen fairly regularly during your first few months.

Ultimately if you decide that you want to spend £60 a month on coffee then go for it. It’s your money. You are just now making better-informed decisions. If £60 a month suddenly doesn’t fit with your priorities (that budget category for the Ourdoor Bar area isn’t going to fill itself!) then don’t be too hard on yourself. Languishing over lost coffee is wasted energy. Maybe cut back and buy 1 or 2 cups a week and be excited about your new bar area instead!

Lee's bar area - only possible with a budget!

I want to be able to spend money guilt-free and/or without my partner having to OK everything

From my experience, this is a bigger question. YNABing (shut up – its a word!) as a couple can be fraught with arguments. You might not currently “do” finances together and keep things separate. That’s fine. But let me tell you that together you can make your dreams a reality far quicker.

Is your dream that farmhouse or is it being able to spend money on video games without her knowing? Get your reasons for wanting to do this crystal clear in your mind. Unless you are one of the lucky few you can’t afford everything you want.

For us, it enabled us to better focus our life and priorities as a family. We both still have separate bank accounts but all money that comes in is put into 1 big pot in YNAB. We then budget what for what we have to pay – bills, true expenses like Christmas and birthdays. Any that is leftover is then up for discussion.

Where should we put this money? Where is going to have the biggest impact?

Yes but what about guilt-free spending money?

It’s critical to ensure there is money for fun. I have fun money, Nicky has fun money and the family has fun money for days out or the odd takeaway.

My fun money is mine to do with as I please. No questions asked. Same for Nicky. I have a clothes category and so does Nicky. Same deal. Nicky buys her clothes and clothes for the girls and likewise with my pot for me and the boys.

As for groceries we trust each other to get what we need for the family.

Anything else is a discussion.

Shall we go out this weekend? Lets order pizza tonight…..whatever.

It’s a respectful discourse on what to do with our money without any resentment about who is paying for what.

It really works for us. We get our guilt-free spending money, we are making decisions about family spending and we are working towards our family goals.

Final Thoughts

YNAB isn’t going to be for everyone and you have to put in the effort to make it work.

When it does work it brings such a level of comfort, clarity and power to your financial situation that I believe it’s an indispensable tool for modern-day life.

You have almost nothing to lose by giving the free 34-day trial a shot. Let me know how you get on in the comments below.

Get YNAB! (free month for Lee)

Get YNAB! (no referral link)

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