When I decided to follow the principle of paying yourself first I managed to exponentially increase my savings rate from around 10% of my income to 30% of my income. I discovered this principle from a book titled the Richest Man in Babylon. The book is made up of short stories or parables which the author uses to teach the reader a set of finance lessons.
Prior to following the principle of paying yourself first, I would receive my salary for the month and immediately pay bills- rent, mobile, broadband and groceries. Then I would pay Sony and Netflix for entertainment. Through the course of a month I dwindled down my cash through frequent spontaneous spending on lunch or takeaways. And whatever amount of money was left over is what I would save.
Trying to save this way meant my savings rate was not consistent. Over a six month period my savings would read something like this: January savings +£100.00, February savings +£50.00, March savings +£73.00, April overspend -£200.00, May savings +£65.00, June savings +£35.00, so in my mind I thought I’d saved quite lot, but what I didn’t include or didn’t realise was the one month where I spent close to what I managed to save over five months. As a result, I was moving sideways instead of moving closer towards a total savings goal. However when following the principle of paying yourself first, I found you are always making progress, every time you execute the principle, you will always be further head compared to the previous month. The way I interpret this principle is, the money you get paid at the end of each month only came into existence through you exchanging your time and skill set at a job or business. Therefore, paying yourself first is simply acknowledging this.
In order to execute the principle of paying yourself first, I needed to change other aspects of my savings behavior. The first thing to have in place was a savings target. In my case, my target was £6000.00. Additionally I gave a personal reason as to why I wanted to save £6000.00. And the reason was because I wanted to have a contingency fund in place before investing in property and the stock market. Something else I did, which is not mandatory, I decided to challenge myself by saving 30% of my income instead of the 10% suggested in the Richest Man in Babylon.
I then took action, I opened separate accounts for my income and my savings. I did not allow my income and savings to remain in the same account. To make this easier, I made use of standing orders. On the same date I received my income, 30% of my income would automatically be transferred from my ‘income’ account into my separate contingency account.
How I found Yolt?
Somewhere between Aug-Sep 2016 I was looking for one app to help track and view my spending across the multiple bank accounts and credit cards I used daily. Yolt was no where to be found on the Google Play Store search list, so I went through roughly three or four apps - all of them failing to do what I wanted, and read through a bunch of online articles before I found Yolt.
What was I looking for?
The problem I had with the other apps was the need to manually enter every purchase I made.
I was moving money around frequently between my accounts and spending across many credit cards for different reasons, some personal spend, some business spend, sometimes money loaned to family, basically it wasn’t easy to keep track of the movement of money between all my accounts.
To find out what I had purchased for any given day, I would have to login into four different banking apps, look through my transactions, make a note of the date, what category the purchase belonged too, log out of the banking app, login into the money tracking app, and re-enter my spending. This was far too much work. These apps worked pretty much like an excel spreadsheet. And again, this is not what I was looking for.
What were my initial impressions of Yolt?
A useful feature, which I did not take notice of at first, was the 3 month spending average for each of my spending categories. This feature provided a visual spending pattern for some spending categories, which meant I was able to create a spending plan which worked for me and was tailored to my typical spending.
How could the app be improved?
In contrast to other apps I'm currently using, Yolt doesn’t easily show where you spending goes within a broad category. This is the reason I use other apps in addition to Yolt, with other spending tracker apps I’m able to label and create very specific spending categories, for example – ‘Bills’ can be separated into: broadband, mobile phone, groceries, fuel/petrol, council tax or rent. With Yolt, you are not able to do this. For me, this lack of customization is a major drawback of using Yolt. At the time of writing, Yolt only allowed me to add one out of two current accounts I have with Bank of Scotland. Which was also the case for Lloyds bank. ‘Currently we can only support one set of credentials for bank of Scotland’. However it looked like this applied only to the two banks mentioned.
How do I use Yolt day to day?
I’ve ended up using Yolt as a way to view my bank (5 in total) and credit balances (more than 5 accounts) within 5 seconds,
When you first login, right at the top of the app, you see the title ‘Total balance’, Press your thumb on ‘Total balance’, and you are shown all the individual balances for every account and credit account you have linked.
Yolt is quick, easy to use, looks amazing and if you decide to use, will help you track your spending. I only wish the app allowed more customisation in regards to the spending categories.