The Magic of Jam Jar Accounts


I want to let you into a “Secret” that is used by many who work in, or are familiar with, banking – to help them pay for what they want even if at first glance it looks like they can’t afford it. It’s called “Jam Jar Money Management”.

It’s a technique that’s common with those in the know, who are confident enough to have several bank accounts and switch money between them as required. This helps them to make sure their rent, bills and everyday spending are catered for and allows them to build cash for what they want as well.

 And don’t worry, in our version you won’t have to open lots of bank accounts, Credit Unions provide this service for you.

Here’s how it works. Think about how much money you have coming in a month or week, depending on how you understand your money best. Then split it up in this order of priority

  1. Rent/mortgage Jar (VERY important to make sure you stay safe and housed long term). This may go out as a direct debit from your current bank account already and may not need your action.
  2. Bills Jar (monthly payments like gas, electric, council tax, insurance, petrol for work)
  3. Save Money for what you want ( Christmas presents, a holiday, a winter coat, a night class or a day out). This can also be used as “rainy day” money in emergencies. I like to call it “Future Proofing”. Hint – you can have as many of these jars as you like for different plans and expenses.
  4. Spending Money – groceries, magazine, night out, sweets for the kids etc

Some people consider groceries a “bill” and you can plan ahead and put that money to one side too. Either way, make sure that you are prioritising some cash for your “Future Proofing” jars. It will make a huge difference to how prepared you feel for life’s ups and downs and help you towards your dreams as well.

Once you’ve paid jars 1), 2) and 3), you get to decide how to spend your “spending money”.  You could get really mean, only buy the cheapest of foods, no sweets, no mags and no fun, and put even more in jar 3) for your future needs and wants, but you may not stick at that for long!

The trick is to save on your everyday spending so you can put it towards the things you really want in your future, but to allow yourself a few luxuries as well, if you can.

By separating your money, you end up with an account that only has spending money, and it will be easy to judge how much you have left till the next pay-day. This avoids over-spending and nasty bank charges. To see a working model of this technique, try our “Jam Jar Puzzle Game”  – scroll down the page a little to play.

For Credit Unions in Dorset and West Hampshire visit


About Life And Money Skills

A blog about building confidence, managing money and creating a great life Content provided by guest writers.
This entry was posted in Budgeting, getting what you want, Money, saving and tagged , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s