I believe the COVID time was the best time to learn money management skills.
‘There is a saying regarding money management “it doesn’t matter how much you make what does matter is how much you keep.”
Two years ago, I was reading a book called “The Secret of the Millionaire Mind ” by T Harv Eker. I was fascinated by the concept of money management in the book.
It was a matter of serendipity that the next week, I saw a Facebook post that said a two-day long T Harv Eker signature program, “The Millionaire Mind Intensive,” was happening in Hyderabad. Immediately, I booked the seminar ticket, hotel room, and flight ticket, and next week, I was in Hyderabad.
The learning in the seminar was huge. In two days long seminar they conducted many exercises to make sure the key ideas get inculcated in our mind.
The best thing I learn in the seminar is use the Jar system to develop a money management mindset. The idea here is get 3 Jars(I started immediately this exercise with Kitchen Jars 🙂 Label each jar as Jar#1. Financial freedom account, Jar #2. Charity account, Jar #3. The Fun account.
Every single day start putting some cash in all three jars. You can start with as low as as Rs.1 coin, in each jar but the key is every day.
Regarding money mangement “It is not the amount that counts, it is the habit that counts” becasue we are the creature of habit.
So why 3 Jars? Not just one, because each jar has a different purpose and rules:
Jar #1. Financial freedom account: The rule here is that you never ever spend money from this count. This account is for saving and investment purposes only. The Financial freedom jar will give a sense of feeling that no matter how hard is your current financial situation,you still have the money. Remember where focus grows energy flows.
Jar2#Charity account: The greatest satisfaction comes from helping others. Charity account help us not only just feel better but also motivate and encourage us to do better in life so that we can contribute more.
Actually charity is an investment for your emotional well-being.
Jar 3# The fun account: This is my favourite account. The rule here is that every month you must have to blow this money for fun-related activities: Go for a trip, visit a high-end restaurant, or buy something for yourself. Go wild, do something for fun.
Why this account is so important…because you would be excited and motivated to save moeny becasue you know that by the end of the month you are going to have fun.
Tony Robbins said there are only two reasons to do anything ”To avoid pain or to gain pleasure”
When in our mind the pain of doing something is higher than the pleasure of doing it we don’t take action.
We don’t save money because somehow the pain of saving money is higher than the pleasure of not saving it. The fun account will help you to change your mindset because it helps your mind to associate pleasure with saving money.
Once the habit got developed you can open a separate Financial Freedom bank account and by the end of every month deposit the money in your Financial Freedom account.
You can also open one charity account to donate the money every month or you can simply put this charity transaction on auto pilot mode hence every month money will get deducted from your account and you don’t have to think about it.
Apart from 3 jars, you might have two more jars. Jar #4 would be for a personal development account – This money would be spent only on self-improvement things- Like seminars, conferences, books, audio and video courses, training etc.
Jar#5 would be for Long term accounts – Here the savings would be for long-term spending – Like big purchases, unexpected emergencies, Vacations etc.