![](https://newsdailyarticles.com/wp-content/uploads/2021/01/6-financial-jars-Effective-personal-financial-management.jpg)
What are 6 financial jars?
Have you ever had a hard time managing your money and balance your expenses?
Have you ever felt that trying to save money becomes pressure on your everyday life?
If you feel like that, immediately learn the 6-bottle recipe – a famous worldwide money management secret, introduced by T.Harv Eker, businessman – speaker – author of best book seller “Millionaire Mindset Secret”.
Effective personal financial management is one of the most important steps in getting rich. It not only helps you to have a peaceful life but also helps you to have a happy old age. This is also one of the most meaningful lessons for millionaires – who are also pursuing a life of financial freedom.
In order to successfully manage money and move towards financial freedom, the first thing to do is to plan how to use it properly. When applying the 6-bottle rule, the amount of each person will be divided into 6 financial funds, so you can better control your finances.
Anyone can use the 6-bottle method to manage money, even if you think you don’t have much money to manage. It is important that you develop it into a habit. Even with 100 thousand dong, you can still start this method.
Successful people apply it to their lives and achieve the best results. They also pass on this special personal finance management method to educate millionaire thinking for the next generation. If you follow this formula, your financial future will definitely grow.
Rule of 6 financial jars included
LOT 1: Essential Needs – NEC: 55%
Essential Expenditure Fund (NEC) helps you ensure the essentials, daily living of life. This NEC fund is also used for meals, subsistence, bill payments, entertainment, entertainment and essential shopping. This is the jar with the highest percentage of your income.
If you are using more than 80% of your income for essential expenses, you need to increase your total income or make changes in your lifestyle, cut down on spending.
The effect of this account is to let you know your spending limit, and then change your lifestyle accordingly.
POINT 2: Long-term savings – LTS: 10%
You use this long-term savings (LTS) for long-term, big-term goals such as buying a car, buying a house, giving birth to a baby, fulfilling your dreams … Having LTS funds will help you see your purpose. aim at, and have a gradual savings incentive for that.
It is important to make savings as soon as you receive your income, thereby avoiding spending this money. One of the easiest and most effective ways to save is to use online deposit savings products. See also the article The boundless power of compounding interest and Easy Saving installment savings.
This fund is to save money for when things go wrong.
The effect of this account is for you to clearly see the purpose you aim for, and gradually save money for it.
NUMBER 3: Education – EDUC: 10%
You need to deduct 10% of your income for tutoring, improve your best friend’s knowledge. You can use this educational fund (EDU) to buy books, attend courses, train, and share meetings from successful people.
The effect of this account is to force you to continuously invest in yourself, because the more you invest in knowledge, the more profitable you will be, never afraid of losses.
NUMBER 4: Enjoy – PLAY: 10%
This is the amount of money you spend on enjoying, buying luxury, taking care of yourself, doing new things, enhancing your experience … The PLAY Fund helps motivate you to do well. than.
PLAY funds should be used continuously. If you do not use up your PLAY funds, you may be losing your life balance and not taking care of yourself enough.
The effect of this account is for you to reward yourself, thereby motivated to work more.
Each month, on the last day of the month, you must spend all the money in this fund.
NUMBER 5: Financial Freedom Fund – FFA: 10%
Financial freedom (FFA) is when you live the life you want without working or being financially dependent on others. FFA is the amount you use to participate in passive income generating activities such as savings, investment, business capital contribution. In this way, you have created a golden “goose” that you can use when you are no longer working.
FFA FFA Financial Freedom Fund, you can never spend money in this fund, just use it to invest in generating passive income.
Please note: never spend money in this fund.
NUMBER 6: Give – GIVE: 5%
This is the money you use to do charity, help the community, relatives, friends. If you have more to pay, lower the percentage, but always take an amount to help others.
How to practice the JARS method?
Take the time to sit back and recalculate your personal money
First, write down how much money you will have each month, then divide it equally by the above ratio.
It doesn’t matter how much money you transfer, it’s a daily routine.
Habit is more important than money.
Even 1,000 VND a day is fine. If you don’t have any coins in your hand, you must also comply with the above principle. When you don’t have money to divide you will feel suffering and you will be motivated to make more money.
Principle of application
The problem of putting money in these jars needs to be done every day, I say EVERY DAY. If you work every day but the amount only increases at the end of each month, you are only working, paying. Look for other sources of passive income to supplement your income every day.
Strictly adhere to spending limit on the amount of money in the jars you have planned, if you need to change to suit you can flexibly change the number of% in the right jars.
Do not use money from one fund to spend in the other. If you lack any funds, save them for the month after you have enough money (not because other funds are too much, but take it out to make up).
You should try these 6 “recipes” right away and often. If applied correctly, you not only have enough money to pay for living, save for the future, but also always find motivation in life!