Managing Money - The JARS System

Rich people mange their money well. Poor people mismanage their money well. ~ Thomas Stanley, author of The Millionaire Next Door The first time I picked up T. Harv Eker’s ‘The Secret’s of the Millionaire Mind‘, I read the quote above and caught myself saying, “I know that!” Trouble was I didn’t really know that. I just thought I did. I had been managing my money for years but not in the way that Harv explains in his book. The money management system that Harv teaches is called the JARS system. Trisha and I have been using the JARS for over a year now.nnWhy People Don’t Manage Money It has been my experience that people believe managing money will take away their freedom. They believe that managing their money will not allow them to be free and enjoy life to the fullest. I’ve been using the JARS for over a year and can honestly say that I feel I’m in a better position now to achieve financial freedom tha I have been in years. In my opinion this is true freedom. I’ve even had friends say, “I will start managing my money when I have enough money” which is like saying I’ll start planning for my retirement when I’m ready to retire. I hate to say it, but if you aren’t planning for your retirement right now then you might not have a retirement fund to retire to. The same applies to managing money. If you aren’t managing your money now then you may not have any money to manage in the future. What Are the JARS? There are 6 jars to distribute your monthly income. The jars are: 1) Necessity Account (NEC) 2) Financial Freedom Account (FFA) 3) Education Account (EDU) 4) Long Term Saving for Spending Account (LTSS) 5) Play Account (PLAY) 6) Give Account (GIVE)nnThe Impact This system has had a massive impact on my life and I’m truly fortunate to have attracted it into my life. It’s purely simple, easy to setup and it works. I remember when Trisha and I first started using the jars in October of 2006. We had been using the system for about 2 months and I was calculating our net worth. It was a good way to track our progress and I was floored when I saw the result. I even had to double check my calculations because I couldn’t believe my eyes. At the time we had been using the jars for two months and had effectively increased our net worth by an astounding $4,000. Now I don’t know about you but $4,000 isn’t small change. It definitely got my attention. After the third month of using this system I asked Trisha to calculate our net worth. I wanted to see her reaction. She went through the numbers and then looked at me and said, “I can’t believe it. It’s working!” Initially, we both had our doubts but after seeing the results first hand we have both become true believers in this money management system. We’ve consistently used the jars every month to manage our money. Without any significant change in our income and all expenses being treated equal our net worth has increased by a surprising 45% in the past 12 months. Once we learned how to apply this system we realized it was very simple and it didn’t require a lot of our time. Here is a list of the benefits that we’ve been fortunate to experience from using the jars: Our net worth has increased by 45% over the past 12 months. - Created more peace in our relationship by resolving money issues. - I don’t feel guilty spending my own play money. I can spend it on whatever I choose. - We’re going on a ski trip to Whistler, BC that I had only dreamed about 1 year ago. - We spend less time managing our money because we have a system in place. - We’ve earned $200 in interest from our all four accounts. We use ING Direct Savings accounts, currently at 3.5% Interest. - We’re in a great position to manage any new money that we attract into our life. Although there are many other types of money management systems out there, I’m biased to Harv’s system. The main reaso I choose this system over others is because, nn- It’s simple to setup and it works. - Harv covers the jars system in more depth in his book, The Secret’s of the Millionaire Mind and his seminar, The Millionaire Mind Intensive. - I have friends who are using this system. This makes it easy to ask questions and learn more. For more information on the JARS, see How the JARS System Works.