Some years ago, I went to a cash machine to get some money out. As I walked up to the machine, I reckoned I had a few hundred quid in there. I had no idea exactly how much, but I knew there was at least £500 available.


Less than £100!

It was then that I realised I had literally no control over my money.

Not good.

I chatted with workmates about budgeting for some tips. It turned out that quite a lot of them used personal budgeting to manage their finances (sometimes down to the pennies). There was talk of setting up spreadsheets and tracking every purchase. Well, I’m far too lazy for that level of committment.

At some point, I stumbled across the “piggy banking” technique. I was sold immediately.

Piggy Banking Demo

Let’s say you earn £2000 per month.

Step 1: work out how much you must pay out each month

At the time, in my case, that was about £750 (rent, council tax, car expenses, etc).

This figure doesn’t include food, clothing etc. These are you regular direct debits and unavoidable monthly card payments. The ones you have to pay to keep a roof over your head and a vehicle on the road (if you have one).

So, out of my £2000, I’m left with £1250.

Step 2: we calculate our variable costs each month

Food, gas, electric are obvious categories.

1. Food – £700
2. Gas – £50
3. Electric – £50
4. Fuel for car – £100

This totals £900

Which gives me the following left over:

£1250 – £900 = £350

So, out of my two grand, I’m left with £350 to play with each month (assuming I’ve calculated correctly).

If we’ve done an accurate job, we don’t need to bother to break everything down. Instead, we break things down by category. I remember when I first did this, I realised that £700 per month for grocery shopping seemed a bit high. This gives you an easy target to make some savings.

Step 3: Split your money into Piggy Banks

When I first did this, I had one bank account (Natwest current account). After a bit of thought, I set up the following new accounts:

1. Current account. My main account where my wages were paid in to.
2. Home account. Everything in step 2. New account
3. Personal account. I transfered £100 each month into this account for treating myself. New account
4. Savings account. The one where I have a bit of cash for an emergency. New account

I’m sure you can see, as I did, how useful this is, immediately.

For a person with one source of income, your wages get paid into your main account. You then transfer money into your home account each month. Same with your personal account and savings account.

As money comes in, you put into your piggy banks.

Now, you can go as deep as you want with this method. Some people also have accounts for:

1. Christmas shop
2. Birthdays
3. Holidays
4. Home improvements
5. God knows what else!

The beauty of piggy banking is: you decide.

As I write this in April 2022, some banks have noticed and let you split your money up, virtually. I opened an account with Starling a few months ago and now have “spaces” for this years holiday and Christmas shopping.

Remember: divide and conquer!


1. Work out what you need to pay out each month / week.
2. Decide how you want to divide the remainder.
3. Set up new accounts for these categories.
4. Pay money from your main account to these sub accounts each pay day.
5. Goto 4 each pay day.

I hope this post will also help you to get to grips with your money.

As always, any questions or thoughts, send me an email, below.