Magic Money Jars

Magic Money Jars

Awhile back I started reading “Debt-Free Forever” by Gail Vaz-Oxlade. I was already familiar with her, having caught her TV show “Til Debt Do Us Part” a few times if I happened to be at home during the day. If you’re not sure who she is or what she’s about, basically she’s a financial adviser, and her TV show is all about helping couples clean up their finances and get on track with paying off their debt. She has several books out there on the same basic topic.

One of the things that she suggests is paying for things in cash whenever possible, which Todd and I have jumped on board with. . She uses something she calls “Magic Money Jars” to keep track of the budgeted amounts for certain categories. You take the cash you have allotted for these variable expenses and put them into jars (or envelopes or boxes, or whatever your preferred thing is). The idea is that when the money for that budgeted thing is gone, it’s gone. Sure, it’s possible to track this by constantly checking your bank account, but I don’t know about you, but previously when I would attempt to do this, I often had little problem going over budget here and there, thinking that it was only a small amount, and didn’t really matter in the long run. But guess what? Going, say, $10.00 over budget on something like groceries every week adds up to over $500 in the course of a year. Those small overages can add up quickly and wreak havoc on a budget. By taking the cold, hard cash and placing it into a separate container and committing yourself to ONLY spending what is in that jar during your budget period is a great way of keeping your spending on track for those variable expenses that you have a certain amount of control over.

Vaz-Oxlade has specific categories that she recommends using the Magic Money Jars for. Todd and I decided to come up with our own categories, and to break things down a little bit more than she does, just because of how complex our finances are. The idea is still the same, though: when it comes to variable expenses (like groceries, personal spending money, entertainment, etc), we put separate amounts for each category into a jar of its own. When the money is gone, the spending is done. So far this has proven to be a very effective method for us. I’ve never been one to use cash that much in the past, but for me, it’s been very useful in tracking my spending. There’s nothing like cold hard cash (and watching that amount dwindle) to keep you on track with your spending.

We’re only one month into our new budget (and using these “Magic” jars) and so far we have managed to stay on budget with our variable expenses. Sure, we’ve had to “steal” from one jar to add to another (like the day we took money from our date fund to take our girls out for milkshakes), but we always manage to keep our spending within our limits. And for a couple of people who are trying to get their consumer debt under control and save up for a pricey family vacation, we feel that this method is working pretty well.

Until next time,



6 thoughts on “Magic Money Jars

  1. Cash didn’t work for us since my husband travels so much for work and isn’t home to use jars. For a few different reasons we don’t use the jars but instead debit from a seperate bank account which i track “categories” in a spreadsheet instead. Involves a little more effort in regards to logging into banking daily but works 🙂


    • Makes sense why using cash wouldn’t work, but as long as you’re tracking everything and staying within the set limits then it’s all good! We all have to figure out the system that works for each of us…glad you found one that worked for you! 🙂


  2. Pingback: Teaching Kids to be Money Smart | Finally Acting Our Wage

  3. Pingback: Letting Go of Financial Embarassment | Finally Acting Our Wage

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s