Jam jar budgeting is a great way to manage your money. Find out how icount can help you set up and stick to a jam jar budget.
If you’re looking for a simple and easy-to-maintain way of managing your finances, jam jar budgeting could be solution for you. This tried and tested technique can help you to save money, pay off debts and manage your day to day spending. Best of all, it’s easy and free to get started with.
What is jam jar budgeting?
Jam jar budgeting is a savings technique where set amounts of money are put into different ‘saving pots’ each month. Although it sounds complicated at first, using money jars or jam jars is a really simple way to keep on top of your spending.
After making a budget to calculate your income and expenditure each month, you divide your outgoing into ‘pots’ – for example, you may have a pot for bills, a pot for groceries, a pot for travel, a pot for day-to-day expenses and a savings pot.
Your pots can either be in the form of separate bank accounts, a specialist jam jar bank account, or simply putting cash into a number of envelopes. Once you’ve spent all the money from one of your pots, you don’t get any more for the month.
How can it help you manage your money?
By making a budget and separating your money into pots, you can only spend as much as is in your specific pots each month. This helps you to keep track of exactly where your money is going, allowing you to easily stick to your budget each month.
You may find it a little difficult at first to spread your spending across the month, but with a little practise, you’ll be a budget master in no time at all.
How to set up a jam jar budget
The first step to setting up your jam jar budget is to work out your monthly budget. Set aside some time to set up your budget, and make sure you have your bank statements and debt details to hand before sitting down to work your budget out.
Next, work out whether your jam jars are going to be literal (i.e. actual jam jars or envelopes) or virtual (ie. a savings account with multiple pots or using multiple bank accounts to budget).
When you get your next paycheck, separate your money appropriately into these pots, and commit to only spending that amount on each category during the month. Any leftover funds should go towards your savings or paying off debts.
How can icount help you with a jam jar budget?
With the icount prepaid Mastercard®️, you can easily get started with your jam jar budgeting. Simply put your weekly or monthly expenditure onto the prepaid card and use this to manage your day to day spending.
As you can only spend as much as you load onto the card, you won’t be able to overspend or dip into costly overdrafts. With our easy online account management and text updates, you can keep track of how much you’ve spent and make sure that you’re not spending your money too quickly.
Find out more about the icount account with prepaid Mastercard®️ here.
7 hidden places to cut money from your budget
When using any money saving tool such as jam jar budgeting, you need a budget to stick to. Before setting up your budget, it’s important to work out where you can cut down on costs or get rid of unnecessary spending habits. Take a look at some great saving and budgeting tips below to help get you started.
1. Check your direct debits
Many people are unknowingly spending money on old direct debits that they haven’t got round to cancelling, such as gym memberships or online subscriptions. Make sure to do a complete review of your direct debits every six months or so, and cancel any subscriptions that you’re no longer using.
2. Review your household bills
Most people are able to save money on their household bills by making the most of seasonal offers, or checking their potential savings on price comparison websites. Although you may think it’s a hassle to change utility providers, switches are now taken care of for you by your new provider, so you won’t have to lift a finger!
3. Move any existing debts
If you have existing debts or overdrafts that you’re paying interest on each month, it’s worth looking into shifting these debts onto a 0% credit card. Although there’s normally a small charge involved in transferring over your debts, you can save a large amount in the long run as you won’t need to pay monthly interest fees.
4. Become a coupon king or queen
There are plenty of discount codes and coupons to be found if you have a little time to look for them. Voucher sites are an easy way to get money off your favourite retailers, and you can save a small fortune by looking for coupons in newspapers, magazines and newsletters.
5. Consider your commute
Commuting can be expensive – research has shown that the average UK worker will spend around £146 per month on commuting alone. Just think how much more quickly you could pay off your debts with an extra £146 per month! Consider swapping your usual commute to walking or cycling, or check out the public transport options in your area which may work out cheaper than your usual commuting option.
6. Pledge to make your own lunch
If you eat lunch out every day, this could be costing you thousands of pounds per year. For example, if you spend £5 on eating out each day, that adds up to a whopping £1305 each year. Taking your own lunch to work is one of the best ways to save money during the week. Pledge to take lunch to work each day for a month and see how much money you can save!
7. Brush up on your haggling skills
For other bills that are not your household utilities, such as TV services or gym memberships, it’s worth trying to haggle to get some money off your bills. By telling these companies you’re thinking of leaving, or that you’re struggling to meet the monthly bills, they’ll likely offer you a special deal to get you to stay. This is an easy way to cut down on your spending without missing out on the things you love.
These simple tips and tricks will allow you get a great start on jam jar budgeting, and you’ll be on your way to a stable financial footing in no time.