Jam-Jar Budgeting

Contents

Jam-jar budgeting is a way of controlling your spending by dividing your money into different pots of expenses. It's a good way to prioritise your money on the things that you need most and to keep track of your spending to cover essential bills. You can also see regular habits and get more of a handle on areas to reduce your spending. There are three ways to try jam-jar budgeting:

How to get started?

1. Start by making a monthly budget:


The jam-jar method works best with a bit of preparation first, it is important to make a realistic budget first.


2. Label Your Jam-Jars


Next you need to think about naming your pots/jam-jars. Depending on what money you have left over after your essential expenses, you decide what each of your jam-jars will be for.


3. Choose your Jam-Jar method



We have listed the choices below together with some pros and cons to think about.

Jam -Jar Pots or Envelopes

If working with cash is your thing, try real jam-jars/pots or envelopes. Using this method, you would put your budgeted cash in each jar, then when a bill is due to be paid, you would take the cash out of the appropriate jam-jar. If you were going out for the evening, you would take cash out of your entertainment jam-jar.

Don't be tempted to dip into other jam-jars when one has run out of cash, if this starts to happen a lot, you will need to think about reviewing your budget.

Pros



Cons


Bank Accounts as Jam-Jars

If you prefer this option, you will need to open up separate accounts for each area of spending and you will need to set up regular transactions between each account. You can either open additional accounts with your current bankers or with other banks. You can set up transfers between inter-connected accounts, these are accounts held with the same bank.



To set these payments up, you can speak to your bank or if you have online and/or mobile banking, you might be able to set payments up yourself.  Make sure you choose accounts that are free to use and do not have any restrictive spending limits.


You can try a comparison site to look for bank accounts but might need to check further details to make sure that the account fully suits your needs. You can try the following comparison sites:



Pros



Cons


Jam-Jar Bank Accounts

Jam-jar bank accounts are a different type of bank account specially designed to let you divide your money into different ‘jars’ within a single account.


Jam-jar accounts usually work like this:


Jam-Jar accounts are not offered by all banks, many credit unions offer them and some of the Digital Challenger Banks offer apps on a similar basis. You can search for a credit union using the links below:



Pros



Cons