WANT MORE MONEY? TRY THE MONEY JARS SYSTEM

Courtesy of tharveker.com

I had a conversation with someone regarding money and our journeys dealing with it. Over the years I have learned that no matter how much money you make, it is a matter of how you manage it that counts. There are those who have earned millions and lost it all; whereas those who have earned much less than these millionaires have built fortunes.

What is the difference one may ask? Is it because they knew the right people or being in the right place at the right time? Nevertheless, the ones who built a fortune from little knew something that those who had millions and lost it didn't. They managed what they had, budgeted and disciplined themselves.

Back in 2005, I attended a free 2-day seminar regarding the book, "Secrets of the Millionaire Mind" by
 T. Harv Eker who had to learn lessons about money management himself in order to build a fortune. One part of the seminar explained a money system that if used properly and with discipline, one can build a great deal of money. There have even been people who practiced it and became millionaires. It is called the Money Jars System which one takes any amount of money and manage it in six different jars with different categories. Get Rich Slowly, the author and his wife described below the categories as follows:

Courtesy of getrichslowly.org

Necessity account (NEC – 55%):

This account is for managing your everyday expenses and bills. This would include things like your rent, mortgage, utilities, bills, taxes, food, clothes, etc. Basically it includes anything that you need to live, the necessities.

Financial freedom account (FFA – 10%):

This is your golden goose. Therefore this jar is your ticket to financial freedom. The money that you put into this jar is used for investments and building your passive income streams. You never spend this money. The only time you would spend this money is once you become financially free. Even then you would only spend the returns on your investment. Never spend the principal.

Education account (EDU – 10%):

Money in this jar is meant to further your education and personal growth. Since you are your most valuable asset, an investment in yourself is a great way to use your money. I have used education money to purchase books, CDs, courses or anything else that has educational value.

Long-term saving for spending account (LTSS – 10%):

The money in this jar is for the bigger nice to have purchases. As a result, my wife and I have used the money from this account to go skiing in The Rockies in Whistler, BC. We also used this money last September for our trip to Italy and Switzerland. The only reason we’ve been able to make this happen is because we’ve accumulated a nice sum each month in our LTSS. A small monthly contribution can go a long way.

Play account (PLAY – 10%):

This is my favorite account. PLAY money is spent every month on purchases you wouldn’t normally make. The purpose of this jar is to nurture yourself. You could purchase an expensive bottle of wine at dinner, get a massage or go on a weekend getaway. Play can be anything your heart desires. My wife and I each receive our own play money, and here’s the best part. We’re not allowed to ask what the other person spends their money on.

Give Account (GIVE – 5%):

Finally, the money in this account is for giving away. Trisha and I give money every month to the Sick Kids Hospital Foundation. In addition, we use the money in this jar to give to family and friends on birthdays, special occasions and holidays. You can also give away your time as opposed to giving away money. You could house sit for a neighbor, take a friends dog for a walk or volunteer in your community.

As a result this couple created the following:

• Net worth increased by 45%.
• Bought their first home for $337,000.
• They created $800/month in passive income by renting out their one-bedroom basement apartment.
• They earned $200 in interest from their savings accounts. They use ING Direct savings accounts, which were clocking at about 3.5% interest at the time. (Ed. note: ING Direct became Capital One 360 in 2013.)
• They created more peace in their relationship because his wife and he have their own money.

You can create a financial portfolio you can be proud of! I have started mine and building slowly yet before long my accounts will be bulging which I would love to see. Comment below and tell me how you got started and your progress. I support and encourage you!💓

Many thanks to: 

Get Rich Slowly

T. Harv Eker

Follow me on Instagram

@prosperous1__

Thank you and have a great week!