Money management is the core value of any independent life. If you don’t master this skill, you won’t be able to deliver your solutions, spread your message or create impact as well as gain financial freedom. One amazing way of controlling cash flow that a successful businessman must know is the 6 Money Jars Method.
What makes the 6 Money Jars Method so Valuable?
This concept comes from the famous book “Secrets of Millionaire Mind” by T Harv Eker, which is relatively a simple and effective system that works for everyone. Basically, the 6 Money Jars Method requires you to split your money into 6 different accounts or jars, each of which reveals distinct purposes and contains different proportions of your earnings. In fact, you can use a bank account or actual jars.
Jar 1: The Necessaries Account (NEC – 55%)
You’ll put 55% of your income into these first jars, and this will be used for everyday essentials. The money in this will cover all your expenses of rent, bills, groceries, taxes, and transport, etc. If you’re parents now, you properly find those spendings familiar, right? No matter how much you earn monthly, just simply put 55% of it into this account. Don’t take any money for other purposes from this jar. It may sometimes be hard to maintain your life within this percentage but you have to follow the rule strictly, start working on strategies to reduce spending and you won’t regret the result.
Jar 2: Financial Freedom Account (FFA – 10%)
Financial freedom basically means “the ability to live and maintain your lifestyle which you desire without having to work or relying on anyone for money”. Hence, the financial freedom jar is created to be the corpus taking care of your family and your needs in the near future. The FFA takes up 10% of your total income, the idea here is to grow this amount of money so that it becomes a golden goose that lays golden eggs called Passive Income. It is your ticker to financial independence, so make sure that you will follow the rule and save up this money. You can also invest the amount of FFA jar into stocks, mutual funds, portfolio management services, fixed deposits, debt funds, or real estate to create passive income sources.
Jar 3: Long-term Saving Account (LTSS – 10%)
This jar is the cornerstone of your financial independence, which is another 10% of your income. As the name implies, it’s a jar where you save for any essential spending which is needed in the near term. It is meant to be accumulated so that you can spend it later on more luxurious things like electronic items, new cars, and vacations, or medical emergencies and contingency funds. You can also use money in this jar for a child’s education and marriage’s expense or any other life goal. Remind yourself that “A small monthly contribution can go a long way”. As parents, you can use this jar to teach kids the importance of saving for a spontaneous class trip.
One tip to get you started: The 6 Jars Money Management App. This jar is crucial, and while it won’t make you rich overnight, you’ll be amazed at how fast your savings accumulate. And knowing you have a “safety net” in case things go tough can keep you calmer.
Jar 4: Education Account (EDU – 10%)
You may ask yourself this question frequently “How much time and money have you invested in yourself these days?”. This is why this education account is important. This self-explanatory jar takes another 10% of your income.
Ben Franklin said, “If you think education is expensive, try ignorance.”; And T Harv Eker said, “If you are not growing, you’re dying!”
Invest in your own growth and knowledge, and you will enjoy the benefits of a more enlightened mind. Whether it’s a higher pay in your present job or learning a new skill set, the financial benefits for improving yourself are obvious.
If you are satisfied with your current level of education – use this jar for your children’s university. If you’re looking for a way to spend without breaking the bank, you can come to 6 Jars Money Management App.
Jar 5: Play Account (10%)
Play jars are the jar most people enjoy which makes up for another 10% of your money. It comes in handy for both the savers and the spenders, which allows both types of people to have fun and indulge themselves to the right limit. This is also an important jar as it also has a role in satisfying mental health so that people will have the energy to work. You can go to some expensive restaurants or go out for a weekend break to a beautiful resort or merely buy something you want to eat. You should enjoy the fruits of your hard work after all in this way.
Jar 6: Give Account (5%)
It can be considered the social responsibility jar where you donate what you have to the needy. So obviously the money in this account is for giving away, accounting for only 5% of your earnings. Remember the amount is not important, it is the act that counts. Giving is for taking. When you’re giving your money to charity, you also take back feelings of happiness and joy. Besides, you may receive back more than you thought!
Depending on the effective 6 Jars System, you can easily control their money flows. You may need help from our 6JMM app to keep track of your money tighter.
6JMM App: Shortest Way To Financial Independence Of Every Age
Maybe you as the parents still struggling with money management, then you definitely take a look at the 6 Jars Money Management App, which has been witnessed to be helpful and effective to millions of users. With friendly design and some other unique features, the app brings back advantageous benefits in reaching financial freedom and having a stable wealth in the long term.
This amazing app also works well with teenagers who are growing up with such a variety of expenses to make. Gen Z would appreciate it much due to its efficiency as well as its easy-to-understand organization.
It even works well with kids. If you let your children access digital devices soon, you should advise them to try this 6 Jars Money Management too!
Have a nice experience and thank me later!