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Published May 25, 2016

The money jar system was introduced to me by T Harv Eker’s Book: Secrets of a Millionaire Mind. It a budgeting technique that automatically designates a specific percentage to certain jars or accounts. The recommended percentages are as follows:

10% – financial freedom account
10% – long term savings for spending
10% – play account
10% – education 
10% – give
50% – necessities. 
money jar
money jar

The above percentages are just basic guidelines but can be adjusted according to your situation. But it is important that all of the accounts are allocated as it complies to certain universal laws. The purpose of the above accounts are as follows: 

1. Financial Freedom Account (FFA)
The first priority should always be FFA or your financial freedom account. Every time you receive money, the first chunk should go to your freedom. Why? because what you focus on expands. You want to focus on being financially free first so you can then give your time to what truly matters. Another way to hasten the growth of your FFA is by building a money magnet.

2. Give Account
For believers, we call this as tithing. “Give to God a tenth of what you earn, and He will open the windows of blessings for you.” Or if you don’t believe in tithing then this can be for charities, donations, or gifts to your loved ones. By the law of abundance and giving, what you give will come back to you ten times more. 

3. Long term savings for spending (LTSS)
This is for major expenditures. Like saving for wedding, for a car, major vacation or for a house and lot. You see, everything we want we can achieve as long as we are willing to save for it. Though it may take time, but once you already bought it, it’s already yours. 

4. Play Account
We need to nourish ourselves. Feel the feeling of being wealthy. This satisfies our emotional need to enjoy. Go travel, go buy a bottle of wine, or go on a dinner buffet. You have to blow this fund every single month! Guilt-free! This one of my favorite accounts. 

5. Education Account
This account is dedicated for continuous learning. Following this universal principle, “If we are not growing, we are dying.” Successful people are learners. We need to learn more, to earn more so that we can constantly grow.

6. Necessities Account
This account is for your basic expenses: food, shelter, clothing, transportation and etc. Yes, a lot would then say, “I can’t live on that! 50% of my income? It’s like 99% of my income for expenses.” Then as T Harv would say, “The habit is more important than the amount.” We are all creatures of habit. And we are most likely masters on the habit of spending, that is why we need to replace the habit of spending into a habit of having proper money management skill.

When you think that the money jar system is too much, then think of it as an expanded version or more detailed version of the abundance formula. Where it states:

Abundance Formula: 100 = 10 + 20 + 70

where: 10% for tithes or give, 20% savings and investments. and 70% expenses.

Related Article: 100% Savings Formula To Build Wealth

Relating to the money jar system:
10% give fund is the same.
20% savings and investments are just equal to 10% FFA and 10% LTSS.
70% expenses can still be equated to necessities, fun and learning. Through the money jar we just allocated specific percentages.

But as always, if it doesn’t work for you, find something that does.

This article is also published in: Tiyo Pilo  

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