There are myriad kinds of budgets in life to help us realize what is worth spending on and ensure our expenses are less than our income. However, realizing and keeping that good habit is not the same. Being a good money manager is never easy, not until you know about the 6 Jars System. And if you’re curious about the biggest secret, it lies at the end of this article!

The 6 Jars of a Millionaire Money Management

The 6 jars were developed in the well-known “Secrets of the millionaire mind” by T. Harv Eker, which is a relatively simple system to understand and is suitable for everyone. Basically, according to the concept, you divide your money into six different accounts, or jars, in which you put a certain percentage of your money. Each one contains a specific purpose gear towards reaching financial freedom.

Let me specify how the system is set up and the names of that 6 separate jars:

1. Necessity Account (NEC – 55%)

This jar is for all of your necessary expenses and bills including things like your rent, mortgage, car payment, food, clothing, insurance, taxes, etc. This account contains 55% of your money and only lives on that amount. If you need more than 55%, it is time you cut down on your spending.

2. Financial Freedom Account (FFA – 10%)

This jar is the ticket to your freedom. These funds should be allocated for investments and building your passive income streams. Every time you receive your money, put 10% of it into this account and never spend it, regardless of how much you make. Think stocks, mutual funds, real estate, and other long-term investments. You may decide to redirect your returns into other jars, but you should never spend your principal amount.

3. Long-term saving for spending Account (LTS – 10%)

The purpose of this jar is for future and larger expenses, which saves 10% of your income. Money from this account will go towards more luxury things such as vacations, a new car, a new house, and contingency fund, etc. You may have more than one LTS jar, then divide this 10% according to your priorities. Keep in mind, these items usually require more time to save, but a small monthly contribution can go a long way. This jar is also very important when your retirement time comes so do not bother, save now and spend later.

4. Education Account (EDU – 10%)

Money in here is meant to further personal education. You are the most valuable asset, so an investment in yourself is never expensive so always remember to spend 10% of your finance on this jar. You will keep moving forwards and never lose when investing in better knowledge and skills. If you stick to the system you’ll find you’re going to have more freedom and wealth.

5. Play Account (PLY – 10%)

Every month, PLAY money is spent on purchases you would not ordinarily make. The goal of this jar is to help you take care of yourself. You might go on a weekend vacation, have a massage, or buy a nice bottle of wine for dinner. Play may be whatever you want it to be. You and your spouse may both get their own play money, and you don’t even have to inquire what the other person does with it!

6. Give Account (GIV – 5%)

This final jar is for giving away. Many of us often forget the name of this account, however, it is relatively essential. You are better at managing your finance than give away your time and money to help others. Donate to support those in need, or just buy a present for your friends or parents on a special occasion. Giving encourages others to give, and you are making the world a better place.

What if your situation is different?

The percentages above are just recommendations based on research and real-life people, it can be the ultimate goal, but not the definitive rule. Building a habit of managing your money is the main point here, regardless of the exact amounts. You should do what works for you!

Besides, many are skeptical of methods that give proportions for people to follow. It’s understandable as everyone’s financial situation and values are different. As a result, you should adjust your percentages according to what you value.

If you wish to have an application recapitulating the 6 jars system

You have several different options when it comes to micro-investing platforms and other savings tools that leverage technology to build toward savings goals. For your best advantage, we suggest the app 6 Jars Money Management because of its updated and smart utilities and easy-to-use specifications, and other outstanding features.

It is an excellent resource to help you track your income, set spending budgets, and identify trends in your spending behavior. You’re likely operating on a small, fixed income, but these tools will make it easy for you to make savings contributions, even with limited expendable income.

27 thoughts on “6 Jars System: Mastery the Inner Game of Wealth

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