For the majority of individuals, maintaining a budget is difficult. It isn’t always a lack of information and awareness that prevents you from saving and lowering your costs; it’s often a lack of discipline.
I will show you a simple and amusing method for generating long-term, secure wealth. Our current financial system does not have to be dull and time-consuming; however, the technique I’m about to demonstrate might surprise you with how easy and efficient it is to handle your money. It’s known as the JARS method.
I didn’t invent the method, but T. Harv Eker’s “Secrets of the Millionaire Mind” presented it to me. It’s a simple money management technique in which you fill six real jars with percentages of your earnings as they come in. You will put varying amounts into each jar when you get paid.
I was doubtful that six distinct jars would be difficult to handle for one pay. However, when I heard about it, I was already working on strategies and coming home with a lot of dollar bills (sometimes none), and I divided the money up. This helped me to understand the system and establish a habit of dividing my funds. It became quite interesting to me to see my money break down into separate accounts. I couldn’t wait till payday so that I might keep an eye on multiple accounts developed.
Let me show you how the system is put together and what the six unique jars are called:
This jar is for any bills or expenses you may have, such as your rent/mortgage, automobile payments, food, insurance, clothing, and anything else you consider necessary. “Just live on 55% of my income?” I know what you’re thinking.
Financial Freedom (10%)
Your savings and investment account. 10% of all the money you make is contributed to your Financial Freedom account, whether it’s $10,000 a month or $20 a month. This is the retirement account that will help you achieve financial independence. The only time you’ll use this cash is when it generates more income, which you’ll have to repay. This is the most interesting account to watch develop as it grows.
Long Term Savings for Spending (10%)
You’ll save an additional 10% of your money, but you’ll spend it in the next year or two. Money in this jar will be used for something down the road, such as a home down payment, a car, a holiday, or anything else you believe will be vital in the future years. “You want me to save 20% of my money?” I understand what you’re thinking. Yes, quite frankly… How serious are you about creating long-term wealth?
Let me tell you before you think I’m some crazed frugal saver, that I’ve got some breathing room and relaxation for you. 10% of your income will be spent on having as much fun as you want. Date nights, massages, and weekend getaways are on the menu. You’re not just budgeting to save money; rather than that, you’re budgeting to have fun. What’s the purpose of doing this? It ensures that you have funds available to go out and have a good time without breaking the bank (or the Jar).
There must always be opposition in all things. You must work hard to save as well as play if you want to preserve money. I am a saver, so I frequently observe this account growing. I then gently tell myself that it’s time to spend the money in my account. nWhat financial counsellor would advocate for you to spend all of your money in your current account?
Tithing or Give (10%)
I feel it is critical to give back or pay a tithe. Each month, I contribute 10% of my income to my church. This may be difficult for some people, but paying a full tithing has shown me that I can’t afford to pay my tithing. I don’t have to worry about money because God has blessed me with so much money. 10 per cent of everything I earn is not significant when compared to the amount God has given me.
If you’re in college, use this cash to pay down part of your student loan debt. Invest in yourself by learning about non-traditional methods to enhance your personal life, business, marriage, or health if you are not attending college. Knowledge is power, and you should never stop learning.
The issue I’ve gotten when people learn about this method is, “this sounds great, but how am I supposed to make do with half of my salary?” It might be tough at first, but you’re creating a future where you’ll be in a better position than most other individuals financially speaking.
I’ve given you a technique that will almost certainly result in long-term wealth if you follow it. So go to the shop or your pantry, get some jars, and start accumulating money. You may create named bank accounts and keep them online if you adhere to the method.