Jars Money Management System: How to Manage Your Money Wisely

If you are always wondering how you can learn to manage your money and you don’t know where to start, today I want to talk to you about the Jars money management system, invented by Canadian millionaire T. Harv Eker.

You can find a brief explanation of the method in his book Secrets of the Millionaire Mind and in his website Harv Eker Online

Manage your money like a millionaire

In this post, I will try to go into as much detail as possible so that you can implement it immediately!

How to Manage Your Money Like a Millionaire

I want to start from this point because it’s of fundamental importance: 

If you don’t know how to manage a little money, like that of a common salary, you will never be able to manage large sums of money.

If you ever get them, you would be in a sea of trouble – and waste -: the first thing to do if you aim to become a millionaire, or in any case be very well economically, is to become a perfect money manager, and know how much money you have, how you spend it, how much you invest, how much you save, how much you donate to charity and so on. 

As Uncle Ben said to Peter Parker “With great power comes great responsibility”, so you have to learn to be disciplined!

I assure you that the millionaire people I know personally know EXACTLY where every penny goes. 

That is also why they are millionaires, btw.

The 6 Jars Money Management System Explained

Money Jar

The system is really as simple as it sounds: all you need are 6 containers (checking accounts, jars, envelopes, whatever works best for you) and the money to put in them.

When I refer to money, I ALWAYS talk about the NET that actually goes into your pocket, net of taxes, and various withholdings.

T. Harv Eker's 6 Jars System

Each amount you receive as a salary, payment for a service, etc… must be divided within the 6 jars according to the following divisions (let’s say you earn $1100.00 per month) 

  • NECESSITIES: everything that is of fundamental importance to you to live, such as bills, food, rent/mortgage, 55% of your income ( in my example $605.00).

     

  • LONG-TERM: Savings for long-term expenses such as home repairs, medical bills, vacations, 10% of your income ($ 110.00).

     

  • PLAY: the money to have fun! Dinners out, beautician, the stadium, concerts… 10% of your income ($110.00).

     

  • EDUCATION: you must never stop studying and training! Coaching, mentoring, books, courses to which you can dedicate 10% of your income ($110.00).
  • FINANCIAL FREEDOM: the money you use for long-term investments like stocks, real estate, various businesses you participate in, 10% of your income ($ 110.00)
  • CHARITY: everything you donate to charities, foundations, people in need is the remaining 5% of your income ($55.00)

Every expense you make will have to come out of its corresponding jar.

For example, if you put the gas on your car to go to work, you will take that money out of necessity, but if you’re going out for dinner with friends, that gas must be paid from the play jar.

Another very important thing to keep in mind is that needs are really meant as things you can’t do without

If you have to buy a new pair of jeans because you only have one, that is now over-repaired and ready to be thrown away, that’s a necessity.

But if you buy the $300.00 jeans to make yourself look “good” in front of others, that money is for entertainment, not a necessity, and must be picked from the play jar. 

If you have to have dinner and buy a pizza from Gennarino under your house, it’s a necessity.

But if you go to the pizzeria 20 km away that makes double-dough pizza with Neapolitan buffalo mozzarella, where will you get the money? From the play jar!

How Rigid is the Jars Money Management System?

The percentages of the method are slightly flexible and can be adapted to the age of those who follow it: those indicated are the ideal ones to reach and maintain.

The key thing is to ALWAYS allocate 10% for long-term savings that should never be touched

Financial Freedom

That money must be invested and left to grow: if you don’t know how to do it yourself, you can contact independent financial consultants who will be able to advise you in the best possible way based on your economic situation.

Furthermore, this is the only jar on which the system is exempted because everything that comes as a profit from the investments of this jar falls within this jar, it is not divided.

An investment can also be buying a phone and reselling it a few months later and making a profit: in this case, you will pay for it with the money from the Financial Freedom jar and the money obtained will all go back into the jar.

As for the other items, if in your case it’s necessary, you can bring the needs to 60% and reduce play or study to 5%, but do not make it a habit and never keep any items at 0.

The purpose of the method is in fact to stimulate your rich mentality, so you always have to make a few small donations (even a dollar counts!) and enjoy the well-deserved leisure time, or read a book like the ones I recommend here at The Tenth Part.

What If I Run Out of Money?

Now we come to the difficult part of the method!

Out of Money

If one month you run out of money allocated for a specific thing, for example, entertainment … you don’t have any more until the following income!
No dinners out, aperitifs, concerts, football games (unless they are offered to you)! 

The reason is that you have to learn how to manage your money, and if your salary is limited you cannot expect to have unlimited money every month.

The same thing goes for the holidays: let’s say your friends organize a vacation that would cost you $300.00, but you only have $200.00 available: either you give up on the vacation, which is too expensive for you, or you find an alternative method to earn another $1000.00 so to have the $100.00 you are missing (10%) in time to leave.

In fact, remember that EVERY amount you receive must be divided into the 6 jars, so to have $100.00 to dedicate to the holiday you must earn $1000.00.

Why is Money Management Important?

Learning to manage your money will allow you to have more and spend it better.

With the money management jar system, you will also learn how to use lack as a stimulus to seek out new sources of income, such as affiliate marketing, for example.

For any questions or curiosities do not hesitate to leave me a comment, I will be more than happy to help you!

And let me know how you feel about the Jars Money Management System!


As a gift I leave you to download a spreadsheet that I have already set up with all the formulas, you just have to enter the figures of your income and expenses and the calculations will be automatic!

Just insert your name and email and it will be immediately available, you will see the link to the download named “Money Management Sheet”.

[email-download download_id=”613” contact_form_id=”586”]

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8 thoughts on “Jars Money Management System: How to Manage Your Money Wisely”

  1. Most of us have no education in money administration. But we are never too old to start learning. This illustration of the six jars is easy to remember and covers all the bases. I will start to implement it digitally. Thank you very much for sharing this type of knowledge with us!

    Reply
    • I fully agree, Paolo, we can always learn!

      The digital system is my favorite, once you have set up with the figures and the monthly recurrence you can’t think about it and you are safe from emotionality and “crazy expenses”.

      Let me know how you feel about the method!

      Reply
  2. Hi. I’m a believer in money management. Some methods can be more preferred over others. I’ve put coins in jars but I’ve never heard of the Jars Money Management System. It’s an interesting system. Seeing the breakdown, I can understand how this can help with creating budgets.

    I think this is a very good method to use because it can help make things more organized. Everyone takes in a different amount of income and this method has tremendous relevance. I’m in affiliate marketing and it really can boost a person’s amount of income.

    Affiliate marketing can provide more financial advantages when it comes to money management. Even though the potential to increase streams of income, there’s still no excuse for squandering or carelessness. This system has important value. Thank you for sharing this. It’s a great learning tool.  

    Reply
    • Hi Tyre,

      since I manage money better, I don’t lack it anymore as before when I didn’t know where the money had gone!

      Now I always have them for everything and it is something that makes you feel much more peaceful!

      For many people, it is difficult to know how to keep money in their pockets and even more to allocate it for different expenses, and methods like this are able to re-educate their financial management.

      Also in network marketing, it is very important to know how to manage your money, to allow your team to grow and get the fruits of your work!

      Glad you found it useful!

      Reply
  3. Hey Miriam,
    As an avid reader of your website, I was really keen to learn from your about the Jars Money Management System. I hadn’t really heard of it or understood it, but I had learned about Barefoot Investor here in Australia and I can see clearly where he gets his ideas from. He refers to “Smile Bucket” to cover the LONG-TERM, EDUCATION and FINANCIAL FREEDOM Jars. Also he refers to “Splurge Bucket” to be the same as the PLAY Jar. I think the CHARITY Jar is also from “Splurge Bucket”.
    I’m just translating or reconciling it here for any Australian readers.

    I prefer the Jars Money Management system as it is much clearer and doesn’t mix the jars at all.

    I also like how you take the emotion out of it, with the common problem of “what if I run out of money” from one of my jars. “You don’t have any more until the following income” Brilliant! It’s that simple.
    Also great that you suggest other side hustles such as affiliate marketing to grow your income beyond that of just your job. By doing this we can put more into our jars!

    Reply
    • Hi John and thank you, it’s always nice to read your comments!
      I don’t know Barefoot Investor, but from what you say I understand who he studied from!
      Harv has created the jars system in the most linear way possible precisely because learning how to manage your money serves to be able to manage a lot of it in the future.
      I created the downloadable worksheet because for me the Italian version helped a lot to keep track of everything, after a while it becomes automatic!
      Plus, having more than one income helps you achieve financial freedom, and I’m here to teach just that!

      Reply
      • Thank you Miriam,
        Yes I can see “Barefoot” learned from Harv.
        I love your downloadable worksheet with the 6 jars. I’m teaching my young daughter the jars too. Yes its exciting what we can achieve with more than 1 income AND the jars method as part of our daily lives. Your articles are very inspiring!
        Thanks so much

        Reply
        • John, I’m glad you enjoyed the spreadsheet!
          It is very nice that you teach your daughter financial management and planning from an early age, this will allow her to avoid many problems and give her the right mentality to become economically independent when she grows up!
          Thanks to you!

          Reply

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