Basically I have read the book “Secrets of the Millionaire Mind” by T. Harv Eker. I have find it very helpful in my savings and in my budgeting. It made me increase my belief that I could be a millionaire.
First of all, let start by defining what is a money jar.
Basically, the money jar system is a money management system that focuses on building wealth and personal growth. This system is also designed to create a habit so building wealth becomes easy. With this system, you place your money into 6 jars (or bank accounts).
Here’s how the money is divided:
Financial Freedom Account (FFA – 10%) - This is your wealth building account. Also know as your “golden goose” This follows the “pay yourself first” financial principle. 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.
Long Term Savings For Spending (LTSS – 10%) - This is the money that you put aside for big purchases like cars, vacations, etc. This account can also be used as an emergency fund.
Education (EDUC – 10%) - This is basically your personal development account. This money is used to buy books, CDs, attend seminars and events. When you grow, your money grows!
Necessities (NEC – 50%) - This is for your everyday expenses like gas, rent, utilities, etc. This is the money that you use to “survive” on.
Play (10%) – This is the money that you have fun with. In the book, T. Harv Eker recommends that you spend this money on luxurious things. This is designed to bring balance to you finances so you will be increasing your wealth and having fun at the same time. You can go shopping or even eat at a nice restaurant. It is highly recommended that you spend this money every month!
Give, Charity or Tithes (10%) - This money is for giving to others, tithing and donations. Giving is a critical financial principle to your success.
Personal Budgeting Tips: How To Set Up And Implement T. Harv Eker’s Millionaire Mind Intensive Money Jar System
by Jay The Analyst | Dec 9, 2013 | Personal Finance | 6 commentsI know I talk about entrepreneurship a lot. I always talk about taking action and making things happen. I wanted to get back to the basics. I understand that managing your money is very critical especially if you want to be rich. I just got finished reading T. Harv Eker’s “Secrets of the Millionaire Mind” book and I learned about his money jar system which is designed to create financial abundance and financial freedom. Here, I give the breakdown and how to setup T. Harv Eker’s Money Jar System. This will help you break through and be on the path to financial freedom.
“Rich people manage their money well. Poor people mismanage their money well.” – T. Harv Eker from Secrets of the Millionaire Mind
What is the money jar system?
In a nutshell, the money jar system is a money management system that focuses on building wealth and personal growth. This system is also designed to create a habit so building wealth becomes easy. With this system, you place your money into 6 jars (or accounts). Here’s a few images on how the system can be set up:Here’s how the money is divided:Financial Freedom Account (FFA – 10%) - This is your wealth building account. Also know as your “golden goose” This follows the “pay yourself first” financial principle. 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.
Long Term Savings For Spending (LTSS – 10%) - This is the money that you put aside for big purchases like cars, vacations, etc. This account can also be used as an emergency fund.
Education (EDUC – 10%) - This is basically your personal development account. This money is used to buy books, CDs, attend seminars and events. When you grow, your money grows!
Necessities (NEC – 50%) - This is for your everyday expenses like gas, rent, utilities, etc. This is the money that you use to “survive” on.
Play (10%) – This is the money that you have fun with. In the book, T. Harv Eker recommends that you spend this money on luxurious things. This is designed to bring balance to you finances so you will be increasing your wealth and having fun at the same time. You can go shopping or even eat at a nice restaurant. It is highly recommended that you spend this money every month!
Give (10%) - This money is for giving to others, tithing and donations. Giving is a critical financial principle to your success.
How to setup and implement T. Harv Eker’s Money Jar System
There’s two different ways that you can setup the money jar system.
1. Buy 6 jars and label them accordingly
This is the basic and old school method of saving. Just get some jars and label them. Once your money comes in, just distribute it accordingly.
Here is a sample image:
2. Setup 6 bank accounts
This is the modern method. You can setup 6 accounts with a bank. This is great because you can name each account. I do recommend that your Necessities account be your checking account since it is the account that you most likely will pay your bills from. The other 5 accounts can be just standard savings accounts.
I hope you find this helpful.
Good luck!
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STOPHi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:
http://jaytheanalyst.com/personal-budgeting-tips-how-to-set-up-and-implement-t-harv-ekers-millionaire-mind-intensive-money-jar-system/