Finance expert, Dave Ramsey once said, “Living right financially is not complicated; it may be difficult, but it is not complicated.” If this is true, how can we make it easy? Good thing we’ve discovered a new method of personal and family finance management – 6 Budget Jars. This was originally proposed by T. Harv Eker in his book Secrets of the Millionaire’s Mind: Mastering the Inner Game of Wealth.

The jars themselves aren’t actually that important. What’s more important is the money management system behind them. Budget jars can be a set of bank accounts. Whichever your take, literally or metaphorically, you use 6 jars and allocate them for a purpose. 

Jars of money
Jars of money

6 Ways To Budget Your Money Using Jars

Jar 1: Necessity Account (NEC – 55%)

This account is for managing your everyday expenses and bills. This would include things like your rent, mortgage, utilities, bills, taxes, food, clothes, etc. Basically, it includes anything that you need to live, the necessities.

Jar 2: Financial Freedom Account (FFA – 10%)

This is your golden goose. Therefore this jar is your ticket to financial freedom. 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.

Jar 3: Education Account (EDU – 10%)

Money in this jar is meant to further your education and personal growth. Since you are your most valuable asset, an investment in yourself is a great way to use your money. I have used education money to purchase books, CDs, courses, or anything else that has educational value.

6 jars money management
6 jars money management

Jar 4: Long-term Saving for Spending Account (LTSS – 10%)

The money in this jar is for the bigger nice to have purchased. As a result, my wife and I have used the money from this account to go skiing in The Rockies in Whistler, BC. We also used this money last September for our trip to Italy and Switzerland. The only reason we’ve been able to make this happen is that we’ve accumulated a nice sum each month in our LTSS. A small monthly contribution can go a long way.

Jar 5: Play Account (PLAY – 10%)

This is my favorite account. PLAY money is spent every month on purchases you wouldn’t normally make. The purpose of this jar is to nurture yourself. You could purchase an expensive bottle of wine at dinner, get a massage or go on a weekend getaway. Play can be anything your heart desires. My wife and I each receive our own play money, and here’s the best part. We’re not allowed to ask what the other person spends their money on.

Jar 6: Give Account (GIVE – 5%)

Finally, the money in this account is for giving away. You can use the money in this jar to give to family and friends on birthdays, special occasions, and holidays. You can also give away your time as opposed to giving away money. You could house sit for a neighbor, take a friend’s dog for a walk, or volunteer in your community.

6 JMM: 6 Jars Money Management App
6 JMM: 6 Jars Money Management App

Rememeber about 6 Jars

It is okay if you don’t use the exact percentage or expense categories. Try to use this 6 budget jars method as a guide and make adjustments, that will work best for you along the way.

There is an app called 6JMM that recapitulates this 6 jars method, try to experience it and the result will be as desired!

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