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A LITTLE piggy could save your bacon . . . by stopping you overspending

Because bank accounts lie. When you look at your statement, it doesn't tell you how much cash you've got, it's just a snapshot of information on what's there that minute.

It MISSES payments due to come in or go out, having cash in the bank doesn't mean you can afford to spend. So you have to take matters into your own hands.

Having filled out the budget planner, you'll know exactly how much money you have available each month.

Easy

The next step is to work out what you want to spend it on, and stick to it. This requires discipline, but I've a simple technique to help you, called "piggybanking".

Its easy to do and almost childlike. But it works. Many people swear by it (or at it when it stops them overspending!)

Quite simply it means you split your cash up into different "piggybanks" so you always know how much you can afford to spend on different things:

STEP 1: Work out your desired spending. This is what the "Part C - Monthly Desired" column of the budget Planner is designed for. The time to fill it in is after you've made sure you're getting the best deals on everything. Then allocate your cash to where it needs to go.

Prioritise all the necessities like mortgage and rent, gas and electricity, and phone bills.

After that divvy up the cash where you want it to go. If it still adds up to more than your income-CUT BACK.

STEP 2: Use different accounts for different things. The aim now is to ensure you always know how much you have available to spend on different things. To do this, set up a number of different bank accounts (some banks allow you to have separate accounts to do just this). Each account will have money in it for a different purpose, so the money's effectively in little pots.

Then, a couple of days after you're paid or earn cash, use standing orders to automatically divvy the money over in the right proportion from your main back account.

This is why it's a piggybank system, you're effectively popping money in different slots for different spending. Which accounts you choose depend on your own personal priorities and spending habits. Choose whatever suits your lifestyle.

There's two examples here. In the one above the little piggybanks used for BILLS (including mortgage), FAMILY FOOD. BIG PURCHASES (sofa, car, kitchen), HOLIDAYS, CHRISTMAS, SAVINGS AND EMERGENCY FUND.

Check

Or in the one on the left it's broken down as BILLS (including mortgage), GOING OUT MONEY, UPGRADING CAR FUND, HOLIDAYS, CHRISTMAS, SAVINGS AND EMERGENCY FUND.

Whatever you choose, whatever is left in your main bank account is actually spendable each month.

And you can instantly look and check how much money you have to spend at Christmas or to go on your holiday- there's no fooling yourself anymore.

However be prepared, piggybanking is clinical.

If you've set your heart on a £1,000 holiday, and see there's only £450 in that account, you can't afford it-and you need to change your plans.

TV money guru Martin Lewis is the creator of Consumer Revenge website MoneySavingExpert.com.

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