My financial education started in earnest with the Millionaire Mind seminar in 2006. I learned a lot and broke through some limiting beliefs I had around money, but the most valuable (and easiest to share) takeaway from that seminar was the JARS system.

I started with actual jars something like this.

I started with actual jars from the dollar store.

You’ve probably heard the advice to pay yourself first. The JARS system from T Harv Ecker, requires that you divide your income, all of it, into categories. The percentages are flexible, but the habit is fixed. You can even alter it as your financial circumstances change like I have. When I am making enough to live comfortably, I use a gross income number, when things are tighter, I use a net income number.

The first category is for NECESSITIES. Generally this is for things like rent, utilities, food, gas and things you need to survive in your world. It was suggested that this be 55% of your income. You can’t live on 55% of your income? The first thing to look at there is reducing your spending. Learn to live below your means.

Again, you can include certain lifestyle items if they are genuinely a necessity for you. For example, when working on a budget for one of my girlfriends, shopping for clothes and makeup was considered a necessity (she’s a makeup artist) where in my budget, it’s more of a play item.

Which brings me to the next category, PLAY. Who doesn’t want a little mad money? Play money (10%) is for things that are treats and bring you great pleasure. This category is important, especially for inherent savers like me. Just like dieting, if you’re too strict with yourself, you’re bound to fall off the wagon. It’s especially fun when you don’t have a lot of money coming in, to find inexpensive and fun treats for yourself. Get creative!

The next category is the classic pay yourself first advice. 10% of your income goes into some sort of interest bearing or investment account. This is your nest egg, your retirement fund, 401k, IRA, what have you. When I started, I bought CDs, and rolled them over, sometimes into each other. When I felt comfortable, I opened an investment account. Do what you can, and learn as much as possible before making the next step.

The next step or category in this case, is EDUCATION. People who are committed to improving their lot in life must be committed to lifelong learning. It doesn’t matter if it’s directly related to an objective, like when I set out to learn more about investing and subscribed to several financial publications. Study what you want and budget 10% of your income for investing in training and educating yourself.

Next is a savings account. Use this for large or unexpected expenditures like vacations or car repairs. I keep the balance in this account funded with 3 to 6 months of living expenses accumulated from the 10% I deposit from my income.

Lastly, is an account for gifting and GIVING. The idea here is to show gratitude, after all you are on your way to financial clarity at the very least! Many people may already be familiar with the idea of tithing, or donating ten percent of your income, usually to the church. Ecker recommends 5%.

What I love about this system, is that it allows me to make decisions easily. Is someone asking for a charitable donation? I have an account for that!

I’d really like to take that course, let me check my education account. Nope, not enough to pay the tuition. I’ll have to pass for now.

Using this system has helped me easily track my finances and net worth. Remember when I said you need to know the score of the game you’re playing? These are the numbers you need to pay attention to. What you focus on expands, so pay attention to and take care of the money you have!

Kiyosaki quote


Again, the system is flexible. Use this as a guideline to create your own. If you have any questions or would like some support, please reach out to me. I’d be honored to help.

If you have any money tips of your own, please share them in the comments below. Be open and let’s start taking the shame out of money talk!