Easy Money Management System that Works for Everyone

Easy Money Management System that Works for Everyone

Rich people manage their money well. Poor people mismanage their money well. T. Harv Eker

I’ve seen so many people that are stuck living paycheck to paycheck with huge debts that seem to only grow bigger. Some of these people work at the same jobs their whole lives, never finding time and money for vacations. In the end, they finish their hard working careers with nothing saved!

Unfortunately this is a story of too many people and can easily be avoided with just a little bit more thinking and planning.

Everyone wants to have more money, but to get more you need to learn how to handle what you already have first!

Many people have financial issues not because of the lack of money but lack of knowledge to manage money which already comes to their lives.

One of the most important habits for financial success is to track where your money goes and to know exactly how much you’ve spent.

Luckily, money management can be easy if you make it simple. There are many ways you can manage your money. I will show you one system that is proven to work well and you can start using it immediately, no matter how small your income is. The most important thing is to develop the habit of managing your money regularly!

T. Harv Eker’s Money Jar System

Few months ago, I attended “Millionaire Mind Intensive” – T. Harv Eker’s seminar in London. T. Harv Eker is the author of the #1 NY Times bestselling book, Secrets Of The Millionaire Mind: Think rich to get rich.

During this seminar we went deeply in understanding our relationship with money, our money personality, our money blueprint (subconscious belief about money that determines our financial life) and we learnt many wealth principles and habits of a wealthy people.

One thing that almost all millionaires have in common is that they are good at managing their money!

The main reason why many people end up in debt is because they don’t have control over their money. With the right knowledge and habits, anyone can become a good money manager. The only problem is that nobody ever showed us how we should manage it.

There is no perfect solution that would be applicable for everyone, but I will share with you a simple money management system that I’ve learnt from T. Harv Eker and that has worked well for thousands of people.

The idea of this system is to separate your income into 6 different accounts for specific purposes (instead of using different accounts you can use 6 physical container jars which you will label differently).

There is a reason why each of six jars is important and although you might want to eliminate some of them, you should keep them all!

Here is how you divide your money:

10% of your income goes into the 1st jar, named Financial Freedom Account (FFA). The money that you put into this jar can only be used for investments (in something that will bring you profit). This jar is used for building wealth and to ensure you financial freedom. You NEVER spend this money!

10% of your income goes into the 2nd jar which is called Long Term Savings for Spending (LTSS). The purpose of this jar is to save money for future expenses (e.g. a new car, a big TV screen, vacation, furniture). You can take money from this jar to pay out debts or for buying gifts, but you may never take money from the 1st jar!

10% of your income goes into the 3rd jar – Education (EDUC). The more you learn the more you earn! Poor people never spend money on education and that’s why they never learn how to get rich! If you have no idea where to invest the money from the 1st jar, then this is an indicator that you need to learn more about investments. The best book that I’ve read about financial success is Robert Kiyosaki’s Rich Dad Poor Dad.

The money from the EDUC jar is extremely important because you should never stop learning and educating yourself.

As T. Harv Eker says:

You can always be more, have more and do more because you can always learn more.

The best way to use money from this jar is for the personal or professional development (books, courses, seminars, events, etc.). The more knowledge and skills you have, the more likely you will earn more money. For some people 10% can seem a lot to invest in education. Poor people always think short term, while wealthy people think long term. Money “spent” on education is actually investment in your better future!

You can use money from this jar to learn new skills, new language or whatever you think can help you in life.

55% of your income goes into the 4th jar – Necessities (NEC).

This money should be spend only for real necessities like food, mortgage payments, bills, gas, oil, insurance, etc.

If you think that you need more than 55% for your necessities, then you need to do one of these things:

  1. Simplify your life – figure out how you can spend less
  2. Earn more – figure out how you can earn more

Both options are doable. The best would be that you realize both!

10% of your income goes into the 5th jar – Play.

The majority of people are either savers or spenders. No matter if you are saver or spender this jar will bring balance to your life. It will force spenders to spend less than they usually spend on luxuries, while it will force savers to finally treat themselves better and enjoy life more.

You must spent this money each month or at least every few months. Allow yourself some extra luxury, massage, nice dinner in a fancy restaurant, buy a new piece of clothes or a new gadget. You don’t have to feel guilty as this budget is planned specifically for this purpose. One good idea is to combine the play and education money into one excursion (e.g. spend one month in another country learning new language or learning about new cultures).

5% of your income goes into the 6th jar which is Give jar.

The purpose of this money is for charitable contribution, for helping people outside of your inner circle (kids allowance or gifts for friends are not charitable contribution). This is for people who need help. One of the reason why many people want to get rich is to be able to help others. Harv believes that if we have the ability to get rich, we also have a duty to give. It’s an amazing feeling knowing that you are helping others. It will make you proud. Not only that it will give you self-image of a better person but you will also subconsciously develop mentality of a rich person. In your mind if someone has enough money to give, that means he is rich, right? In this case, that person is you.

As you see, each jar has its own purpose and reason, that’s why you need to use all of them. You might need to adjust a little bit percentages, especially in the beginning of implementing this system or if you already have big debts. All in all, your goal is to stick to the system as much as possible as you will see that by using it regularly is impossible to get broke!

How to implement this system?

First of all, you need to know your percentages. I created this simple Excel file (Money Management System) where you just need to enter you monthly income and the amount of money you need to put in each of the 6 jars will be calculated automatically. I also added another sheet where you can track how much money you spend daily and what was the purpose (FFA, LTSS, EDUC, NEC, PLAY or GIVE). Analyzing your spending habits is crucial for improving your financial situation!

Some people implemented this system by creating 6 separate bank accounts or they just use 6 physical container jars – it’s important that you label them. Here is an example:



Instead of money jars, I created envelopes:


For example I don’t like to have FFA or LTSS money in jars (or envelopes), that’s why I’ve created a separate eSaving bank account which I named LTSS and I use FFA money for direct investments (property, online business, investments funds, etc). So for me, the best solution is to have two jars where I will put the paper bank statements (FFA & LTSS) and have 4 more jars with real money (EDUC, NEC, Play and Give) – this money is to be spent each month anyway. Physical jars are good because physical is memorable so why not use your everyday environment to remind you that your financial situation is completely under your control!

You need to figure out what way of implementing will work best for you. If you are unsure, you can start by using this Money Management System spreadsheet to track your monthly expenses for one month and in meantime you can decide the best way for you.

As T. Harv Eker says:

Money doesn’t buy happiness, but it can buy FREEDOM: freedom of choice, to be able to do what you enjoy doing and not be forced to do things just because you need ’the money.’

By implementing this system you will become a good money manager and you will save yourself a lot of stress, worries and even relationship problems caused by arguments over financial issues.


Eva Lu

Written by Eva Lu

Eva Lu is an ex engineer who decided to give up her successful career and dedicate her life to inspire and motivate others to find the best in themselves. She founded the “Mind of a Winner” website because she strongly believes that success is a skill developed by persistent people and her passion is to motivate others to become persistent enough. Her inspiration and her mentors are self-made millionaires who helped thousands of people to change their lives and who managed to build careers with their passion and vision towards doing something what they love. She also helps young entrepreneurs with business advices and encourages them not to give up on their dreams. She teaches them how to turn dreams into clear visions and ideas, and ideas into actions and results.
All posts by Eva Lu →