My goal is to have financial freedom. Step 1 is to learn the proper way of managing money and make it a habit. I think it’s easy. I just have to be very disciplined and to always keep in mind the goal. Implementation of this knew knowledge is my next step.
I learned this from Wealth Course, Module 1 (for more information please visit: http://www.ca2020.net).
I thought of sharing this with as many people as I could because I truly believe that this would help. I also mentioned this to my brothers because I want them to learn proper handling of money as early as now.
What you need are six jars or piggy banks. Each would be labeled as follows:
Jar #1: FFA or Financial Freedom Account (10% of your money at hand) The money in this jar is your capital. It should only be used for investments, so you should never spend it. Investing and spending are two different things.
Jar #2: LTSS Account or Long Term Savings Spending (10%) This is the money you can spend for buying a car or for travel expenses, and the like. This is also your contingency money, something like a back-up money in case you might need to spend on something urgent.
Jar #3: Educ Account (10%) This is the money you use for continuous learning. You can spend this for attending seminars or buying books about business and financial freedom. This would help you continue your growth and financial maturity.
Jar #4: NEC or Necessity Account (50% - 55%) This is the money you use for your everyday needs. Money for necessary expenditures.
Jar #5: Play Account (10%) Of course, we also want to have good times and relaxation. So this is the money you can use for spa treatments, movies, etc. This is your reward to yourself. You have to take care of yourself because “health is wealth”.
Jar #6: Give Account (10%) This is the money you can spend for charity or this could be your lending money.
I have already tried dividing my money to these jars, and I think it is really more organized now.
It doesn’t matter how big or small your money is. Just do the proper math, and divide it to these jars. It makes a big difference. Make it a habit. I hope you would try it.
