I came accross an interesting article on a concept that was trending a few years back. The concept of the Jar system.
This was develop by someone trying to simplify money management for an ordinary person who would not understand the technical jargons of finance.
The system is built on the division of your money into catergories and ensuring that you keep refilling each jar each month. The jars are as follows:
Jar 1: this is the bank account where you keep money for your day to day expenses. The idea is, if your living expenses are above 55% of your net pay, then its probably an indication that you are living beyond your means. You should re-asses what is pushing your life style up which could be a fancy apartment or a car with a high monthly payment. What can you reduce in this catergory?
Jar 2: This is the future , build on the famous concept of paying yourself first. This is your savings that will enable you to invest in stock market, start a business as well as real estate. 10% is the minimun you should be putting in. This in addition to your pension contribution as retirement and financial freedom do not neccesarily mean the same thing.
#my chicken farm business falls in this jar#
Jar 3: Savings. This is your call account or 32 day account that you need to keep money for emergency as well as for the dream car you been wanting to drive.
#my Jeep came from this Jar#
Jar 4 : Education. You should never stop investing in yourself. This is the account that you save to go do that master degree , to go attend that finance seminar , to go on that short course you been wanting to. You can also keep this money in your 32 day account.
#the relationship seminar at Rock Lodge came from this Jar#
Jar 5. Playing Jar. This is the money you keep aside to have fun. Have you ever thought that you are soo busy saving such that you have even forgotten how to do road trips. In this fund, you travel and have the holiday of your dreams, have dinner out with your mate somewhere and enjoy the fruit of your sound financial system
#holiday with bestie came from this jar#
Jar 6: Donation. Money came from a latin word that means “to flow”. For you to receive money, you must give money. Learn to freely give to others without expectation. God will bless and return to you abudantly.
#The stationery drive this season came from this Jar#
May you look at what is in each of your jar and implement a few things to ensure come 2020, your jars will be fuller than 2019.
The % used are a guidance of how much each Jar should take up. You can however tailor them to suits you needs.