Have you ever heard of jam jar budgeting? It’s a great way to keep track of your finances and help you reach your financial goals faster. Jam jar budgeting is about breaking down your spending into different categories and setting aside money for each.

In this post, we go into how jam jar budgeting works and why it could improve your money management in 2023.

What is a jam jar account?

A jam jar account is simply a bank account that works as a separate savings “jar” for each of the categories in your budget. For example, with an account through Monzo, you can separate your account into different pots for household bills, groceries, entertainment, and more. You can see all of the pots laid out on your banking app, detailing exactly how much money you have in each category.

You can sign up for a bank account with a built-in jam jar approach, like Monzo or Starling, and create multiple pots within one account. You can also use apps like Mint and YNAB (You Need A Budget) to divide your account into different jars.

Alternatively, you could streamline your budgeting categories and use separate bank accounts as the different categories - such as bills, variable expenses and savings. With this method, it's easier to only have a limited number of categories, so you don't end up opening countless bank accounts.

How does it work?

Jam jar budgeting keeps your finances divided into different categories so you can budget for all your expenses. You can even assign different direct debits, such as your energy bill or Netflix subscription, to a 'Bills' pot, and the payments will be automatically withdrawn from that pot as long as you have the funds.

When it comes to spending money, you can dip into these pots and make sure you have enough money left to cover other costs throughout the month.

You could even start putting money aside in a savings pot for an upcoming event, like a friend's wedding or summer holiday. Or set up a direct debit to come out of your account every month to save money for any unexpected expenses, like your car breaking down or your computer breaking.

Some people take the jam jar approach more literally and divide their cash into different jars every month. However, digital jam jars might be more practical for your day-to-day life in the modern world where using cash is becoming more uncommon.

What are the benefits of jam jar accounts?

The main benefit of the jam jar method is that it helps you stay organised with your finances. Having multiple accounts or jam jars for each expense category makes it easier to track where your money goes and helps prevent you from overspending in certain areas.

Having separate pots for different purposes and goals could help you save up for things without having all your funds mixed together in one current account.

Finally, these types of accounts are usually free or low-cost to set up and maintain (especially if done through an app). They offer great value compared with other, more expensive methods of saving and budgeting!


Jam jar accounts require minimal effort but help keep track of your spending habits without becoming overwhelming. Try out this method today and see if your money management improves over the next month.