What is jam-jar budgeting?

What is jam-jar budgeting?

author: Emily

By Emily

Jam-jars? What have they got to do with budgeting? Well, keep reading and we’ll tell you…


The jam-jar method of budgeting goes back generations, as people stashed their cash into different jars to keep track of their finances. By dividing your money into separate pots for specific expenses, you can keep a close eye on how much you’re spending. 

This is a great technique if you’re trying to cut down on overspending. But how could you put it into practice properly? And could it really work in this day and age?

First, let’s take a look at how it works…

Draw up a budget

Before you start, you may want to put a budget together with all of your outgoings. You’ll need to know how much money you have coming in and out each month to help you know how much you could put aside. An online budgeting calculator may come in handy at this stage.

Think about your spending

Next, you could look at how you spend your money and break it down into ‘essential’ and ‘non-essential’ costs. Essential costs may include things like your rent or mortgage, transport and bills, while non-essential costs might include things like eating out or the cost of any hobbies. If you can’t afford those non-essential costs, it could be worth thinking about what you can cut out.

After you’ve looked at your outgoings, you could split your spending money for different expenses into different ‘jars’ and decide how much money you’d like to put into each one. As an example, you could put your weekly shopping spends in one jar.

Should I really use real jars?

Taking out what you plan to spend in cash and putting it into actual jars could be a great way of keeping an eye on what you spend. To help you stick to your budget, it’s important not to dip into different jars for different reasons, if you can help it.

However, you could find it tricky to manage using only cash in this day and age, as lots of utility and rental companies may only accept bank transfers or Direct Debits.

It might be a good idea to set up a Direct Debit for payments like these and you could use the jam-jar budgeting technique for your other costs once these payments have gone out.

Could you use the jam-jar technique online instead?

You might be wondering if you could use the jam jar budgeting technique without withdrawing cash at all. After all, not everyone feels comfortable leaving their money lying around the house.

To do this, you could open up separate bank accounts to cover your different types of spending, such as bills, transport, savings and leisure. Then, you could automate these payments by setting up standing orders, which will transfer the money from your main account into each of these accounts – or online ‘jam jars’. That way, you’re only ever spending what you’ve laid out in your budget. 

What about a jam-jar account?

Jam-jar accounts are single accounts which allow you to split your money into separate pots. You could take a look online to compare accounts to help you do this, as some may come with benefits but some may charge fees, so it’s worth checking before you open one. Alternatively, you could check to see if your local credit union offers any jam-jar accounts.

Wondering what a joint loan is? Look no further.

Disclaimer: All information and links are correct at the time of publishing.

author: Emily

By Emily

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What is jam-jar budgeting? What is jam-jar budgeting?