Piggy Banking: a simple tool with big potential
Could this simple tool change the way you manage your money forever?
One of the reasons budgeting can seem so complicated is the volume of transactions going in and out of our accounts. Bills, benefits, subscriptions, salary, direct debits....it can be really hard to keep track of everything that’s going on with our money.
One way to simplify all this and to get control of our budget is to break down all our spending into three categories.
Put simply, everything that we spend money on can be sorted into one of three ‘pots’, or piggy banks - either Bills & Regular Payments, Day-to-Day Spending, and Savings & Big Purchases. Think of the old-fashioned method of saving up cash for different purposes in separate jars or ‘piggy banks’ and you are on the right lines.
These ‘pots’ can then be brought to life as three bank accounts (so you may need to open additional basic accounts) - one for each of the spending categories above.
Our income can be split between the three pots by setting up automatic bank transfers into different accounts, according to the amount you need for each. (If you are using our Budget Builder, the hard work of adding up the totals for each category is done for you!). And then you must ensure that you use the correct account when you spend any money. Any surplus income you hadn’t budgeted for (e.g. overtime at work) should be transferred directly into the Savings account to help build up a buffer for any months when your income is lower than expected.
Watch our video below to see the Piggy Banking method in action, or download our helpful leaflet.
When we get feedback on our Money Course, Piggy Banking is the topic that guests tell us they found the most useful – it's completely changed the way many of them manage their money, making it much easier to deal with.
Piggy Banking - and importantly, how to put it into action - is the subject of one of the sessions on our Money Course – free to attend and accessible from anywhere with an internet connection (or face-to-face where circumstances allow), the course covers the basics of money management in a fun and interactive way, in small group sessions or as a self-study option.
