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Money Jar Budget in 3 Easy Steps

Updated on October 20, 2012

Money Jar Budget in 3 Easy Steps

Ever feel like you've lost complete control of your finances?

Money is the single most stressful aspect in the lives of most people. Trying to get out of debt when it's a struggle just to make ends meet can leave you feeling overwhelmed.

Fortunately, there's a very simple solution, best of all - it won't cost you a thing. Starting today you can take back control of your finances with a money jar budget.

Using the money jar budget allowed me to take control of my spending and get out of debt very quickly. Less than two years later I'm proud to say that I am now debt free and my finances are well on track. Thanks to the money jars!

What is a money jar budget?

If you've ever watched "Til Debt Do Us Part" on TV then you already know. For those of you that have not seen the show, a money jar budget is an extremely effective type of cash budget that helps you control your variable expenses. It categorizes your variable expenses into five broad categories:

  1. Food - used for groceries and other food purchases
  2. Transportation - used for gas, parking, bus or transit passes etc.
  3. Entertainment - used for fun stuff like nights out on the town or other outings
  4. Clothing & Gifts - used for birthday gifts or clothes
  5. Other - used for miscellaneous expenses like allowances for the kids

Aside from reducing your variable expenses the money jar budget has the added benefits of helping you get out of debt sooner and saving a lot of money in a short period of time.

How to setup a money jar budget

  1. Find out how much you're "really" spending - This may take some time but its absolutely necessary to get accurate numbers here. Otherwise the money jar budget will NOT work. The best way to find out what you're really spending is to log everything you spend money on in an expense journal. The goal is to get an accurate picture of spending on a monthly basis. Alternatively you can go through last month's bank statement but this may not give you the true picture since it will not account for your cash spending.
  2. Enter income vs expenses - Once you know what your monthly expenses are its time to crunch the numbers. This free interactive budget worksheet (look for in step 2 after clicking the link) will do all the work for you by calculating your fixed expenses such as your car or mortgage payments while reducing your variable expenses as you complete the worksheet. The worksheet will show you how much money in total you have for the money jars as well as the specific amounts to put in each jar.
  3. Fill the money jars - Take five mason jars, label them with the categories mentioned above and fill each jar with the allotted cash amount for it's category. That's the easy for the hard part...

A few more points about the money jar budget to keep in mind

  • Living on cash will definitely take some getting used to, we all love our credit and debit cards. Living on cash may seem inconvenient or even impractical but that's really the whole point. One reason it's so effective is that it forces you to plan your purchases carefully ahead of time thereby reducing the chances of spending money needlessly.
  • Don't be put off by the term "living on cash". You're not going to be using cash for everything just your variable expenses such as food and transportation. Your fixed expenses such as your mortgage, utilities, car payments are not included in the budget and are paid separately.
  • One of the biggest adjustments for people that are just getting started with the money jars is realizing when the jars are empty the spending stops too. It's okay to borrow from another jar if there is still money in the budget. What is not okay is dipping into your accounts when there's no money left in the jars - that's just defeating the purpose.
  • Another question that comes up is what to do if there's money left over. When I first started using the jars I was in a lot of debt so I would always use any extra money to pay down my debt. You could also put the extra money into savings or you could just use to replenish the jars for the next pay period.
  • This budget creates a weekly household budget, however, since my wife and I both get paid bi-weekly the weekly thing didn't really work for us so we just doubled the weekly amounts spit out by the budget worksheet. You can just tweak the budget according to your pay periods. The same principles apply.


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    • profile image


      3 years ago

      That's a really good idea! I don't have an income at the minute but it sounds very interesting so I may try this once I get an income

    • Money$avingIdea$ profile imageAUTHOR


      6 years ago

      @monicamelendez - Sorry for the lateness of this reply. Somehow my initial reply did not go out. Wutevs. Anyway, cash budgets are awesome indeed. For me, nothing has worked better.

      @Giovanni - Thank you for developing such a useful app and bringing it to my attention.

    • profile image


      6 years ago

    • monicamelendez profile image


      6 years ago from Salt Lake City

      Sounds a lot like envelop budgeting for sure - definitely a very effective way to budget. Cash budgets are awesome.

    • Money$avingIdea$ profile imageAUTHOR


      7 years ago

      @My SciFi Life - Yes it is very similar to the envelope budget in that they are both cash budgets but I prefer the simplicity of the money jars over the envelopes.

    • My SciFi Life profile image

      My SciFi Life 

      7 years ago from London, UK

      sounds very similar to envelope budgeting? I think its the same thing but the concept is slightly different and perhaps more visible.

      @kenoscully - there are lots of online and offline tools that will help you manage your money using this method. Try Mint if you want to use an online tool and YNAB for a desktop based one. YNAB is 100% built on the principles of envelope budgeting and is really simple and easy to use.

    • Money$avingIdea$ profile imageAUTHOR


      7 years ago

      Thanks keno,

      A monthly budget could be challenging but its definitely do-able. Best of luck!

    • kenoscully profile image


      7 years ago from Dublin, Ireland

      Great hub and definitely I should try myself. The problem that I have is that I get paid monthly, so a little scared on overspending but guess I will never know until I try.

      Hope to read more of your hubs soon and welcome to the community.


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