The Six Jars System of Money Management with Jason V. Holmes

NFT Explained – Shiba Cards The Jason V. Holmes Podcast

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Money! This is unarguably a very essential item in our lives. Each day comes with new expenses that we need to match with the money available to us. Of course, this underscores how essential it is to make money. But beyond just getting by each day’s financial needs, it is only natural to want to be financially secure, to have enough money to not only cover expenses but to be able to live the kind of life you wish. For that, you need to look into money management techniques.  

Hello. Welcome to my podcast, The Jason V. Holmes Podcast. My name is Jason and I will be discussing an important topic in this episode of the podcast. Having enough money to meet needs is crucial to everyone. But what most people don’t realize is that you need a system of managing your finances to reach your desired financial state. 

Sticking to a budget can be difficult, so it is not surprising that many people fail at it. The discipline required can be elusive at times. The consequence of this is that it leaves you stuck trying to keep track of your finances and, in the worst case, leaves you in a bad financial state. I can tell you for sure that this is not where you want to be.  

Thankfully, you don’t have to be there. Today, on the podcast, I will be introducing to you the JARS system of money management. This is the secret to building the long-term wealth you have been looking for. I know, I know. You must have come across very tedious methods of managing your money before. But as you will find out, the JARS system is both simple, fun, and most importantly, an effective means of growing your wealth. 

Before I get into the details, let me tell you a bit more about this system. I came across the JARS system of building wealth from a book; yes, a book. Guys, it is always helpful to read books. The title of this book is Secrets of the Millionaire Mind, written by T. Harv Eker. He also teaches this money management system at his Millionaire Mind Intensive course.  

As I said, this system is quite simple. It involves you getting six actual jars, each designated for a particular purpose. Every time you get your income, you divide it into certain percentages and deposit into the appropriate jars immediately. Now, you might think this is overly simple, but I assure you it is very effective. Also, you do not necessarily have to handle cash; you can open six different accounts for this purpose. However, for the rest of this podcast, I will be referring to jars. 

Now, I had said you are to divide your money into particular percentages for depositing. Let us get into them now. 

First Jar: NECESSITIES. Your necessities are as defined by the word. Necessary. Essential. Things you cannot do without. Things you just have to pay for. On a typical day, necessities take the bulk of our spending. In this system, it also does. The percentage of your paycheck you assign to your needs is 55%. Examples of items that can make up this jar include food, clothing, insurance, car payments, rent or mortgages. Yes. I know. This makes up most of our living expenses. And it may be unthinkable to live on only 55% of your income. But the truth is that it will only seem impossible until you do it. 

The next jar I will be explaining is the Financial Freedom Account. This is where you save money that works towards securing your financial freedom. The Financial Freedom Account is also your savings and investment account. Towards the lofty goal of being financially secure, this jar is allocated 10%. Remember, this percentage stays the same, regardless of how much money to earn. One essential fact you should note about this jar is that money allocated to it is spent only when it will lead to greater returns, which you also put back into the jar. I must admit that it is exciting to watch this account grow; it is a testament to your increasing wealth. 

Another jar you will designate using this system is the Long-Term Savings for Spending. For this jar, you will set aside another 10% of your earnings. This is money that you are saving for a near-future expense. This means that money in this jar will go to projects that require a large capital outlay but are not too far in the future. This could be getting a new car, putting a down payment on a house, or planning a vacation. It could also be money set aside for an unplanned medical expense – those don’t typically come cheap. Essentially, this jar caters to things you consider essential in the coming years, and you are saving toward them. 

Fourth jar: the PLAY jar. Yes. This is about financial management and discipline and all that serious stuff. But just as it is essential in life generally to have time to relax and have some fun, it is crucial to put aside money that you will spend. The recommendation for the play jar is another 10% of the income to have all the fun stuff you may want to indulge in. This may be massages, date nights, and weekend getaways with friends. More commonly, we randomly happen on some of these fun activities. If it comes when you are low on cash, it may rob you of the opportunity to engage in the activity. Budgeting for play ensures that you have money to enjoy yourself while also not breaking the bank or mistakenly overspending. 

The fifth jar leans more on our selfless, more compassionate side. This jar allocates 5% of your income to give back. Don’t they say givers never lack? The more you give, the more you receive, even though we don’t give for the sole purpose of receiving. It is vital to give back from what you get. But it is certainly one effective way to do some good in the world and make an impact in someone’s life. There are countless causes or charities you can donate to. Just identify the ones closest to your heart and send them that money. The happiness and satisfaction that come from it are highly motivating. 

And now, we are on the sixth jar. In this one, you are setting aside money for your own development. This jar is designated education. The money you put in the education jar forms your savings for going to school, paying for a beneficial paid online course, or attending training or seminars that will help you become a better version of yourself. You could also dedicate it to buying books that enlighten you. Yes, I know we already have a jar for investment. But what better investment is there than in yourself. You are taking a very safe bet on yourself by saving to educate yourself, which usually pays off later. 

So, guys, we now have a great picture of the jars involved in this financial management system. Now I want to highlight a few reasons why you should start implementing the JARS system. First off, the system applies to everyone. The jars system is practical for everyone on the income spectrum. Regardless of the amount of money you earn, you can always divide up your money based on this formula and be on your way to financial success.  

Also, by setting these amounts of money each week or month, depending on how often you get paid, you are cultivating a habit that puts you in charge of your finances. It brings the idea of managing your money to your mind. Without a doubt, if you are truly serious about doing well with money, you must become serious about managing what you currently have. The better you manage your finances, the more of it you will eventually have.  

Now, you may wonder what to do if, for example, your necessities gulp more than the allocated 55%. Well, this is not an uncommon situation, particularly when you are just starting. What you must realize is that the percentages are recommendations. They are not set in stone, and you may adjust them. They stand as goals to aspire to. What you gain by following this system is a habit, which is more important than the amount of money involved. So, if you cannot immediately abide by the set percentages, define an amount you can manage and go on from there. 

Another commonly asked question about this is what to do if you have existing debt. Well, you can use your long-term savings for a spending jar to save up to pay your debt. Imbibing this habit of managing your money will first help you get out of debt and prevent you from getting into it again.  

So, guys, we have come to the end of this podcast. I hope you are thinking of getting your jars ready so you can start saving and be on your way to financial freedom. I also have a book coming out in 2022 that explains the money management technique in more detail. Subscribe to my podcast at thejasonvholmespodcast.com and keep an eye out for this book. You will be glad you did.  

Until the next time, goodbye.

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