How To Manage Your Money Wisely with the Jars System


Chinese New Year reminds people very well of how rich they are. One of the best traits of Chinese people is their ability to save and accumulate wealth from small pennies. Do you want to try something new to save up?

The jar system of saving has been tested by many. If you want to make a difference in your money management skill, then you need to try this jar system. This method was popularized here in the Philippines through an interview of a local beauty queen. She gave an advice by sharing how she personally manages her finances and how she can still save for the future. This beauty queen is no other than Miriam Quiambao:

The 6-jar money management system was originally published in T. Hary Eker’s book, entitled Secrets of the Millionaire Mind. The following is the condensed version of how to save with this jar system:

To start, you have to divide your income according to different purposes as soon as you receive this income (from any source). Then, place each share into different jars. You can use mason jars, empty water bottles, or some old tumblers. Any container will do!

Please note that you should start with the amount of your income with all the taxes removed. However, ensure that no expense has been deducted yet.

JAR 1: The Necessity Account Jar

The first jar serves as the necessity jar. It covers all your basic expenses, such as rent, bills, food, and transportation. All the expenses that you need for the activities of daily living should be accounted here. According to the jar system, you should allocate 55% of your earnings to this jar.

JAR 2: The Play Account Jar

The second jar may become your favorite because this jar covers the play expenses, that is, the purchases that you do not usually make. Examples of the purchases covered under this account are spa treatment, movie night out, dining out, or anything that you enjoy. The main purpose of this jar is to give you joy in this stressful life. Note that you should allocate only 10% of your income on this jar. You need to spend it wisely and moderately.

JAR 3: The Financial Freedom Account

This jar is named as The Financial Freedom Account because it is your ticket for such freedom. The money that you will allocate in this jar should never be spent because you will use this money to invest, so that you will have passive income streams. You should allocate 10% of your earnings on this jar. The only time that you will spend the money from this account is when you have become financially free. Spend only the returns of your investment and not the principal itself. Financial freedom is your main goal before you hit your retirement. The earlier you attain this freedom, the better.

JAR 4: The Education Account

The fourth jar is meant for your personal growth through education. Money that will be placed in this jar should be used to purchase CDs and books and to attend seminars or anything that has an educational value that gives you additional knowledge. The examples for such are not limited to having postgraduate degrees. You can always learn a musical instrument, take cooking lessons, learn jujitsu, and the list goes on. Always remember that you are the most valuable asset that you have. There is no other great way to use your money but to use it for the betterment of yourself. Note that you should allocate only 10% of your income on this jar.

JAR 5: The Long-Term Savings for Spending Account

The money in this fifth jar is meant for large purchases in the future. You need to allocate 10% of your earnings for this jar. You can use the money on this jar for vacations abroad, to buy real estate, for your contingency fund, or for your children’s education. Anything planned for the future falls under this category. You may have more than one long-term savings for spending account, but you should divide the allocated 10% for this jar to the number of jars that will fall under this category.

JAR 6: The Give Account

The last but not the least is the jar that contains the money that you will give to others. Some call this as the charity jar because they allocate the money in this jar for their chosen charity. The money kept in this jar is used for giving your family or friends some presents on birthdays, holidays, or any other special occasion. You can also share the contents of this jar to those who are less fortunate. You should allocate 5% of your earnings for this account.


To wrap it up, the jar system is a guide to help you allocate and set your priorities straight. This will help you to be systematic and will prevent you from overspending. Through the JAR system, you will gradually see the importance of planning, saving, and investing. This will eventually help you out to attain your main goal, which is to attain financial freedom, and to enjoy life more in the future without hesitations.

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