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Piggy banking involves splitting your money into separate “piggy banks”, each for a different purpose. This savings method makes it easier for you to set a budget for how much you want to spend on things each month and set aside money for important things like bills and rent.
Download a budgeting app
While piggy banking draws on an old school savings method, with current technology it’s easier to do than ever before! With all the different budgeting and personal finance apps available now, it takes little work to divide your money into different categories. And it’s especially easy with digital banking apps like Revolut and Monzo.
Revolut allows you to divide your money into different “Vaults” for various categories. Similarly, Monzo also lets you split your money into different “Pots” which can be used for anything you want.
Apps that can help you budget
Balance and set your budget
Before you start piggy banking go through your finances and make sure you can afford to cover the amount that you expect to spend monthly.
By balancing your budget, you ensure that you are earning enough to cover all your spendings. You need to evaluate your income and make sure it covers all your essential expenses (like bills and rent), and cut any costs if necessary to meet your expected monthly budget.
Set up different categories
Decide the different categories that you would spread your money over. There are no rules to this; you can have as many different categories as you like! Here are some categories to get you started:
- Bills
- Rent
- Groceries
- Travel money
- Splurge money
Decide how much to add to each piggy bank
Go through your income and decide how much you’ll add to every piggy bank. Prioritise the different categories and decide which ones you need to add the most money to (like rent and bills).
It’s always good to overestimate how much money you should add to your piggy banks for things like bills and groceries, just to make sure you have enough to cover everything.
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