Managing money doesn’t restrict freedom. It creates freedom.
So this weekend I went to the Millionaire Mind Intensive Seminar by T. Harv Eker. It was the best seminar I’ve ever attended in my life and it changed a lot of limiting beliefs I had around money. For that I am grateful. Here’s a link to the program . I can also get some free tickets for next year which I’ll most likely be attending. If you want some. Just message me to see if they’re still available.
In the seminar, they mapped out a great system for managing your money so you can one day be financially free. Ignorance is costly and even if you become rich the habit of managing your money starts now. What happens to many lottery winners? 70 percent go broke within 5 years because they can’t manage their money. Their stuck with the old habits they used to have so the amount doesn’t matter. Don’t be one of those people. Learn how to manage your money you can’t be living paycheck to paycheck if you want to be rich.
Whats jars? You may ask. They are just plastic jars that signify how you are going to allocate your income. In reality, you will use your accounts.
You split your monthly income into six different accounts.
Necessities account (NEC) 55 percent of your income goes towards this. (Rent, food, gas, bills etc..)
For managing your mandatory expenses and bills. Anything that you need to live. Most people live beyond their means and spend 80-100% of their income on this which is crazy. Everyone and I mean everyone can cut back on certain things and simplify their lifestyle. No excuses. How do you expect to be financially free one day if you’re never saving or investing any of it?
Long Term Savings account – (LTS) 10 percent of your income goes towards this. ( This is for bigger purchases e.g. a new house, television, holidays etc. )
It’s great to be able to go on a weekend getaway with your loved one or buy that new television that you’ve wanted for a while without dipping into credit cards or overdrafts. Make sure you’re saving at least 10 percent of your income for something that will really add value to your life.
Financial Freedom Account (FFA) – 10 percent of your income goes towards this. (Investments like real estate, stocks, mutual funds, businesses etc..)
My favourite account. The account that will let you be financially free. This is how you create passive income so you don’t have to work. If you’re not putting any of your income towards this account then you are doing yourself a big disservice. Research and read as much as you can. Investing doesn’t have to be difficult especially if you’re in it for the long term.
Education account (EDU) – 10 percent of your income goes towards this (Books, seminars, courses, training, coaches etc..)
Education is super important on your journey in personal development and financial freedom. The knowledge that people possess who are where you want to be will accelerate your growth dramatically and most of the time you will have to pay for it. Save for this so you can invest in yourself. You are your most valuable asset.
Play Account (PLAY) – 10 percent of your income goes towards this. (Enjoying life and giving yourself pleasure)
Blow all of this every month. That’s right you savers 10 percent of whatever you earn monthly must go to this. I am a natural saver and find it difficult to spend sometimes. You need to learn how to enjoy the fruits of your labour. I mean what use is your money when you’re in the graveyard. The more money you make your quality of life should increase accordingly.
Give account (GIVE) – 5 percent of your income goes towards this (Charities, foundations, making a difference, relationships, etc…)
A very important account. I have adapted this to 10 percent as per the law of tithing which is giving away one tenth of your income. Many millionaires and billionaires tithed like John D Rockafeller, Warren Buffet and Bill Gates. Giving away my money has helped me become an active giver in other areas of my life too which has brought me more joy. It also keeps you in an abundant mindset which you should always have.
Notice how these are percentages of your current income. You don’t have to be a millionaire to start doing this. You could literally start with £1.00 and make use of these jars. After a year you’ll be surprised at how much better your finances are.
If your thinking six accounts may be too much for you in the seminar they stated that you can divide the system into 3 accounts. Your current account for necessities, number two an account for financial freedom , long-term savings and education and a final account for your play and give money.
Before learning how to manage my money using books like Rich Dad Poor Dad and The Richest Man in Babylon. My spending was random. I was always a good saver but I didn’t make the most of the money I earnt. This is the system I personally use as it is detailed in all the areas you’ll be spending your money on and is simple at the same time. If you want to go more in depth on this I would highly recommend the book by the author of the system T Harv Eker called Secrets of the Millionaire Mind (affiliate link). Start building the habit of managing your money now and you’ll be light years ahead in terms of your financial situation compared to the people that don’t.
I hope you found some value in this post. If you did please share / leave a comment with your thoughts below!