Do you use the piggybank method of budgeting?

moneysavermum_2

I am trying to sort my finances out but am currently in an overdraft but have started this method: Has anyone else tried it or uses it to sort their money out:
The Piggybank Technique

Now you know what money you have, you need to ensure you stick to it. This requires discipline, but it's much easier to do if you organise yourself effectively. To help with this I developed a simple system, called 'piggybanking', which has two simple steps to it.
Step 1:
Use the Budget Planner to work out what money you have.

You may've been wondering until now what the "Part C - Monthly desired spend" column of the Budget Planner is for. The idea is once you've done all the savings in the Money Makeover article you can now prioritise your finances to balance your budget. Simply allocate the spending as necessary to match up what you plan to spend with the amount of money you have coming in.
Step 2.
Set up different bank accounts for different purposes

Now you know how much money you want to spend on different items, the aim is to make always knowing how much cash you have simple for you.
To do this, set up a number of different bank accounts, each with money in it for a different purpose, so the money's effectively in little pots. When you get paid or earn the cash, have direct debits or standing orders shift the cash over to them from your main bank account within a day or so of getting paid.
This is a bit like using a piggybank, putting money in different ones for different spending. Which accounts you choose depend on your own personal priorities and spending habits. Choose whatever suits your lifestyle and makes it easier for you.
A simple example of six accounts:

Bills (including mortgage)Family FoodBig purchases (sofa, car, kitchen)HolidaysChristmasSavings & Emergency Fund
This means whatever is left in your main bank account is actually spendable each month. And you really know how much money you have to spend at Christmas or to go on your holiday - there's no fooling yourself anymore.
It's perfectly possible the end result of this is that you can't afford the holiday you wanted, but more importantly, it means follow it properly and you won't spend what you can't afford