Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

The truth about money is contained in this famous quotation from David Copperfield . We agree with Mr Micawber, but, like him, we find it hard to put into practice.The secret of happiness is therefore not to be found in winning the National Lottery, but in that last shilling. This is what penny pinching, scrimping, being parsimonious, is about.

I like the word “parsimonious”. It has a pretty, undulating, sound. If we want to live better for less, the first thing to do is to get organised. How much of our income do we never get after tax, National Insurance, and pension?

What do we have to pay out? The mortgage, electricity, telephone, council tax, water. Not much left, is there?

If your goal in life is to have lots of money in the bank then the decision is easy. Don’t spend it. If you want to enjoy your money you will have to spend it well. That is, you will have to spend to get the maximum out of life. That takes us back to getting organised and budgeting. Don’t forget to add on another Pounds 50 per month on the expense side. I find that every month there is at least one Pounds 50 bill that has to be paid that was totally unexpected.

There are needs and there are wants. Food is a need, as is clothing, car repairs, house repairs and many others. Wants are all the other things we spend money on that we do not need, but they are fun. If we spend carefully on our needs we will have more left over for our wants. It is a fallacy that people who are careful with their money are miserable. Quite the contrary. Happiness is not having to worry about the credit card, letters from the bank manager or whether you can keep up the mortgage payments.

If it is a need or a want, the first question we ask ourselves is can we make it ourselves? If we can, will it be better than the bought one? Home-made bread is better than anything you can buy at the supermarket. Ordinary soap washes your hair better than expensive shampoos but does not make so many bubbles. Most machinery in the house can be repaired by us, as can most of the faults on the car.

You can do it. You are an intelligent person. You are likely to be more intelligent than most repairmen. If you come across a problem you have not faced before, you can always try thinking about it. It that fails, then the library will probably have a book to tell you how to do it. It has books on making clothes, growing vegetables, and repairing washing machines.

When the good weather returns I am going to have to get stuck into some serious plumbing work, so I will get the book on plumbing out of the library and do what it says.

Even if I decide the job is too big for me, or it needs special tools, at least I will know what the professional plumber is doing. You can do much more than you think.

Are you fashion victims? If you are, it is your own fault, not the advertisers’. Have you noticed that most cattle in a herd wear the same coat? No one needs Pounds 60 trainers. Trainers don’t need Pounds 60 trainers, so why buy them?

So we put on a sweater instead of turning up the heat, we try to buy what we need but cannot make, and then we will be able to spend a little on what we really want. Perhaps you want a home with a bigger garden, or a holiday in Australia, or a yacht or a better vintage Bordeaux. We all know people who have these things, but they only got them by cutting back somewhere else.

Recently on TV, someone spoke of the “Frugal Nineties”. That has a good ring to it. It sounded much better than the “Naughty Nineties” at the end of the last century, a phrase that brings up images of twerps in toppers and Champagne Charlie with a floozy on his arm. The “Frugal Nineties” should be gentle on resources. Worth, rather than price. Value, not valuables.

Let’s get money back where it belongs. In our pockets.

TEN HINTS FOR SAVING MONEY

1. Subtract necessary bills from your monthly net pay and despair. Vow to do better this month.

2. Before going shopping have a big snack and make a list of what you need. No impulse buys allowed.

3. Use what you bought. Turn ketchup bottles upside down. Use the faintest memory of lipstick with a lipbrush.

4. Buy special offers, when shops are having their sales, in charity shops and from car boot sales.

5. Write small. Use both sides of the paper.

6. Make paste for your children from flour and water, and play dough from flour, water and salt.

7. Most things can be cleaned with vinegar or bicarbonate of soda. Bicarbonate is brilliant at getting rid of smells. Try it in smelly shoes.

8. Look after the pounds and confine your extravagances to the pennies!

9. Recycle everything you can, and that doesn’t just mean dumping it at Sainsbury’s. Think of 30 ways to use old newspapers.

10. Cold? Take more exercise. Dig the garden. Vacuum the house. Walk to the shops. (That saves petrol, too.) If all else fails, put on a sweater.

The Penny Pincher is available at Pounds 1.75 a copy from Thurleigh, Bedfordshire MK44 2EE.