6 Jars Money Management System: Overview

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3 years ago

I have been tracking my finances ever since I started working, this probably roots down to the fact that I’m an accountant. It is innate within us and we’re probably wired to know where our money goes. I’m not alone in this aspect though, my friends and I, we’re a group of accountants, have different budgeting systems but we all have a system in tracking our money.

At first, I just maintained an excel file which just shows me where my money goes, no foundation or analysis, just a list of things I spent on and how much I have. 

I tracked every expense that I made and I figured, it does help me in terms of knowing where my money goes but it doesn’t really help me in terms of budgeting. 

Because of that I decided to hop on the 50-30-20 rule, which is a bit broad for me because it’s not as easy to know what you need and what you want. I can’t seem to draw a line so I end up with a messy system. 

After days of research, I came across T Harv Eker’s 6 Jars Money Management from his book called “Secrets of a Millionaire Mind” which I’ll be honest, I haven’t read but is in my to-read list. 

Basically, using this system, you split your money up into six different accounts, and you have percentages of your money to put into each account. 

Source

In the old age, we would’ve used jars, but due to the digital age, bank accounts are more convenient. It’s just a system where every time you receive an income or any money that you would like to manage, you will split it into 6 jars, of course jars being metaphors, 6 bank accounts.

This is only just a guide and overview of what you might include in each jar but of course, it still should be in your judgement what expenses would you include in each jar.

Jar #1 Necessities (55%)

This would include the “needs” , it’s the expenses that are needed for us to survive our daily lives. It would always be the biggest chunk as we need this to continue making more income. This would include rent, bills, electricity, food and anything you deem necessary. 

Jar #2 Long-term savings for spending (10%)

This jar is mainly for emergencies, whether be it medical or like what happened in the first few months of pandemic where people are panic-buying, you can get the funds here and if you didn’t use it you can also use it for vacations, big purchases but remember to still keep a portion of it in the case that there would be emergencies.

Jar #3 Play (10%)

My personal favorite, hehe. I just like the concept of having a separate play jar which I can literally spend on anything. There are days where I just want to buy something nonsense and would really be guilty of buying it because again most budget systems don't really clear the line here, so I end not buying because of the fact that I always have to outweigh the benefit. 

With the play jar, it’s literally your mind is your limit. If you want to throw away your money go ahead. If you want to buy random stickers and a new toy just because you feel like it, this is where you get that money from. 

Jar #4 Education (10%)

This is also an interesting one because it makes you focus on yourself and your growth. This is the jar where you’ll get the money for your books, courses, webinars, mentoring and coaching. This jar really pushes you to get further education and you don’t have to worry about feeling that you’re spending too much on education because you have a separate fund for it. 

Jar #5 Financial Freedom (10%) 

This is the jar that focuses on getting passive income streams so that as many of us would say “we can retire early”. This can be invested in a lot of things like stock, crypto, bonds and even business ventures. You can also purchase real estate from it just as long as it’s an investment and it would generate income. It doesn’t have to be grand, just start small. 

Jar #6 Give (5%) 

The universe is built on abundance and once you give to the world it will return to you 10 folds, we must always remember to give back. Whether it be a friend, charity, local church, NGOs and the likes, this is the jar that you can use to give back.


This is just an overview, I might turn this into a 4 part series and in the next I would discuss the benefits of using it. I’m still learning this and I will probably start in the month of July. 

Next I would write about the benefits and comparison from other money management systems, then I would show you how I apply it on my own. 

If you have any questions, I’d love to go through them with you. 

See you around!

Source: https://www.harveker.com/blog/6-step-money-managing-system/

Lead image: Photo by Napendra Singh on Uns

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I just realized that I only have one jar. I guess I have to reconstruct my budgeting.

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3 years ago

I only had 3. HAHAHAHAHAAHHAHA. But yeah, this is your sign! Go for it!

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3 years ago