Have you been looking for a better way to organize your money? Try the “Jars System”

Money Management Jars System
Posted on January 14, 2011 by BDS
Have you been looking for a better way to organize your money? Try the “Jars System”.

The biggest difference between the wealthier and the poorer is their ability and willingness to “manage” their money. There’s a proven formula for dividing and managing your money that can make THE difference in your financial life.

Every time you get paid your money should be sorted into six categories, accounts, or “jars”. This not only keeps you aware of budgeting, it also focuses you on creating for all areas of your life.


1.Necessity - This is what you need to pay your basic bills – rent/mortgage, utilities, car, insurance, food, etc. You want to get to a point where this is no more than 55% of your income.

2.Financial Freedom Account – This is your golden goose, the money you put away, invest and allow to grow. Eventually the interest, investment yields/passive income is what you will use to become financially free. 10% of every check should be put into this account.

3.Long Term Savings – this is where you put money to save up for something big you’d like to purchase or do, i.e. a vacation, a new computer, a special piece of furniture, etc. 10% goes in here.

4.Play – This is money you must use every month to do something fun, something just for the sheer pleasure of it. It’s money you must spend every month on something that you regularly would think twice about because you may think of it as splurging. Splurge. If you only have a few dollars in this account (10% goes here as well), get creative on what you can do with those few dollars that would be a splurge.

5.Education - Your education is vital to your growth. Ten percent of your money goes toward this fund for taking a class, workshop or seminar that you’ve always wanted to take or one that’s necessary for your professional expansion.

6.Give – Philanthropy is an acknowledgement that you’re part of a greater whole. We would encourage that 10% go here. However, for some people, beginning with 5% allows them to get comfortable and grow into a larger sum.

Getting into the habit of managing your money in this way is a critical first step toward wealth building. Congratulations on taking the journey!

This “Jars System” for money management was first introduced at T. Harv Eker’s Millionaire Mind Intensive.

http://kidsmoneymanagement.com/2011/01/14/money-management-jars-system/