Short version: give every £ a “job.” Put the big, irregular costs into named pots and fund them monthly so they stop blowing up your budget.
Rule of thumb to set each target
Monthly target = (Annual cost ÷ months left) + 10% buffer
Fund it automatically the day after payday using your Payday Flow (Bills → Buffer → Pots → Fun).
Grab the free tool (Google Sheets)
👉 Free Savings Splitter (Google Sheets) – Enter your amount available to save → it splits the cash into each pot instantly.
1) Emergency Fund (starter buffer)
- What it covers: 1–3 months of essentials (rent/mortgage, utilities, food, transport, minimum debt payments).
- Target: starter £500–£1,000, then build toward 1–3 months.
- Why: stops you reaching for credit when life happens (car repair, boiler fault, missed shifts).
Example: £1,200 target over 12 months → £100/mo.
2) Car Costs
- What it covers: MOT, servicing, tyres, repairs, road tax; (optionally) insurance excess.
- Target: Add your typical annual spend (MOT + service + tyres) + a small repair buffer.
- Example: £500 MOT+service + £300 tyres + £200 buffer = £1,000 → £1,000 ÷ 12 = £84/mo.
3) Home Maintenance
- What it covers: Boiler service, small repairs, DIY tools/materials, white goods breakdowns.
- Target: 1–2% of property value per year (owners), or flat £50–£100/mo in a rental.
- Example: £60/mo as a starting point.
4) Annual Bills & Insurance
- What it covers: TV licence, contents/home insurance, car insurance (if you don’t keep it in “Car”), breakdown cover, Amazon/Costco, software subs paid annually.
- Target: Sum your annual premiums + add 10% buffer.
- Pro tip: Shop insurance 3–4 weeks before renewal.
5) Gifts & Christmas
- What it covers: Birthdays, wedding gifts, Christmas (food + presents), Mother’s/Father’s Day.
- Target: Decide total yearly gifting, divide by 12, add 10%.
- Example: £720/yr → £60/mo; 10% buffer = £66/mo.
6) Travel / Holidays
- What it covers: Flights, trains/fuel, hotels, spending money, passports, travel insurance.
- Target: Pick the next trip budget, divide by months to go, add 10%.
- Example: £1,200 summer trip in 8 months → £1,200 ÷ 8 = £150 + buffer ≈ £165/mo.
7) Kids / School
- What it covers: Uniform, shoes, clubs, trips, birthdays, school photos, summer camps.
- Target: Look back at last year; set a clear annual number + 10%.
- Example: £600/yr → £55/mo with buffer.
8) Health / Dental / Glasses
- What it covers: Prescriptions, dentist/hygienist, glasses/contacts, physio, small private fees.
- Target: One check-up + hygienist + expected prescriptions + 10%.
- Example: £360/yr → £33/mo.
9) Pets
- What it covers: Insurance premiums/excess, vaccinations, flea/worming, food, boarding.
- Target: Add insurance (or set a self-insure pot), routine care + 10%.
- Example: £720/yr → £66/mo.
10) Tech & Appliances
- What it covers: Phone, laptop, tablets, headphones, washing machine, fridge repairs/replacements.
- Target: Plan for one major replacement every 3–5 years + small repairs.
- Example: £600 phone every 3 years → £17/mo + £10/mo buffer = £27/mo.
11) Clothing & Shoes
- What it covers: Seasonals, workwear, school shoes, coats, trainers.
- Target: Set a realistic annual cap; divide by 12.
- Example: £480/yr → £40/mo.
12) Fun & Experiences
- What it covers: Meals out, gigs, mini-breaks, kids’ treats—guilt-free spending.
- Target: Whatever you can afford after the essentials and other pots are funded.
- Pro tip: Funding Fun last (after Bills → Buffer → Pots) keeps life balanced and sustainable.
Putting it together (example split)
Let’s say you can put £600/month into Pots:
| Pot | Target / mo |
|---|---|
| Emergency Fund (starter) | £100 |
| Car Costs | £84 |
| Home Maintenance | £60 |
| Annual Bills/Insurance | £40 |
| Gifts & Christmas | £66 |
| Travel/Holidays | £165 |
| Kids/School | £55 |
| Health/Dental/Glasses | £33 |
| Pets | £66 |
| Tech & Appliances | £27 |
| Clothing & Shoes | £40 |
| Fun & Experiences | whatever’s left |
Use the Splitter to nudge these amounts automatically from one payday amount.
How to run this with the Savings Splitter
- Enter payday amount (top-left).
- Name pots (or use the defaults).
- Set each pot’s £ target or % (your choice).
- The sheet shows the exact amounts to transfer—copy them into your banking app as standing orders dated payday +1.
- Review quarterly; increase/decrease pots as life changes.
👉 Download the Free Savings Splitter (Google Sheets)
FAQs
Q: I can’t afford all 12. Where do I start?
A: Emergency Fund, Car (if you drive), Annual Bills, and Gifts/Christmas. Add the rest as your budget loosens.
Q: Should debt come before sinking funds?
A: Minimum payments + a small starter Emergency Fund first. Then keep modest pots for predictable costs so you don’t put them back on credit. Throw the rest at your highest-priority debt.
Q: Can I use one big “Annual Costs” pot?
A: Yes—one pot is better than none. Named pots simply give more clarity.
Next reads
-
Savings Waterfall (UK): the simple order to fund pots without guesswork.
-
Payday Flow: Bills → Buffer → Pots → Fun, automated in 10 minutes.
-
Best Places to Keep Cash (UK): easy-access vs notice vs fixed—when to use each.
Bottom line: when you give irregular costs a named pot and fund them monthly, you stop “surprise” spend from wrecking your budget. Set it once, automate on payday+1, and let the dashboards do the heavy lifting.
