Millionaire Mind Money Management Jars
A few months back, I attended the Millionaire Mind Intensive weekend event. There was so much useful information presented about transforming your mind to think and live like a millionaire. The most simple concept to implement is T. Harv Eker's Money Management Jars. I chose to customize the system to hold my family even more accountable to the system. It
may be a little tedious for some but totally necessary for others.
The general idea of the jars is to divide your total income into 6 areas (jars).
Jar #1: Financial Freedom (10% of your total income)
- The money in this jar is designated for investments in your financial future ie. Retirement and investments in passive income ventures. When necessary, you may only spend interest earned from this account.
Jar #2: Long Term Spending (10%)
- The money in this jar is in designated for large purchases. When you are in the market to make a large purchase, you should take your time and save for it. With this extra time, you can think, search for the best deal, determine whether or not you really need to make the purchase, and ensure this isn't just another impulse buy you could regret later. Ideal purchases would be cars, appliances, vacations, and paying off debt.
Jar #3: Education (10%)
- You should always be improving yourself. An investment in yourself is the best investment you can ever make. Pay for courses, books, and college classes with these funds.
Jar #4: Necessities (55%)
- These are your monthly bills; mortgage, food, utilities, etc. If your necessities total more than 55% of your total income, you should consider lowering your bills or increasing your income.
Jar #5: Play (10%)
- Have you ever heard someone say to always pay you first? My mom told me that all the time when I was growing up. I would only pay my bills and save everything else. I didn't have anything in particular I was saving for, just saving. I had a lot of money but was lacking any fun. You definitely don't want your budget to leave you bitter. For the sake of your sanity, spend your play money every month, or at least every quarter.
Jar #6: Giving (5%)
- Giving is as important to your success as saving. These funds are for charity, church, and giving to others. In the event that you can't give money, give your time. If you prefer to give more than 5%, take the extra from your Necessity jar.
Most important to remember is that the system isn't set in stone. You want to focus on forming the habit.
The tweaks that I made to the system are that my checking account is designated as my Necessity jar and I use envelops for everything else except Play. That's an actual jar. Anytime money is spent from an envelope or jar, it's replaced with a note or receipt. At the end of the month, I can record exactly where the money was spent. I have noticed that using the jar system, instead of spending until its gone each month, we actually can see that there's money left over at times. We also tend to eat out less because we can physically see how much money is allocated for frivolous spending for the month.
I definitely recommend T. Harv Eker's Money Management Jar system to anyone trying to increase their wealth and financial awareness.
Share in the comments your experience with the jar system and any tweaks you may have to it. How is it working out for and your household?
Peace & Love
P.S. If you are looking to increase your income, click here to take a look at the opportunity I am taking advantage of that allows the extra wiggle room we needed to get out the paycheck to paycheck race.