There's a point in the book right before Jude goes to bed where he "lays down the sponge". Michael wasn't sure what that meant and thought it might mean he takes a bath - I'd suggest it's to do with baking. I was surprised a little while ago that some bread I bought listed "sponge" as an ingredient - it turned out that's sort of like a sourdough starter, except the sponge is all fresh ingredients. More info at wikipedia
Or it could be a euphemism for what young men do before they go to bed