The T. Harv Eker Jars System: Building Financial Freedom

Back in 2007, I attended T. Harv Eker’s “Secrets of the Millionaire Mind Intensive” 3-day seminar, based on his best selling book, Secrets of the Millionaire Mind.

One of the things I learned among a lot of valuable stuff was his “jars” system of organizing your money. At first, it seems too simple of a system to have any serious effect on things.

But once you try it- you’ll see the absolute freedom from worry the system creates!

Even if you are making minimum wage and “can’t afford” anything, this system will work for you, and help to get you out of your situation.

Here are the basics:

Take your income, let’s say it’s a paycheck. You divide it into 7 categories.

1. Necessities (55%). This is your food, clothing, shelter. The basics. This should be 55% of your income. Later, you can work to bring that down, but 55% is a good number to start with.
2. FFA (10%). Financial Freedom Account. This is money that can go towards investments that pay you over and over, or your passive income. 10% goes in this “jar.”
3. Education (10%). This is how you grow, either in business, or in relationships or overall happiness. Courses, books, seminars, etc. Also 10%.
4. LTSS (10%). Long Term Savings for Spending. This is for things you want to have. The “nice to haves”. Vacations, computers, phones, concerts, new furniture, etc. 10%.
5. Contingency fund (5%). “Just in case”. Accidents, car trouble, armageddon.
6. Give (5%). Money to donate- to a charity, or another cause you believe in. 5%
7. Play (5%). Money that MUST be spent on FUN, every month (or at least every quarter). Think massages, car trips, events, a night out. 5%

The way I do this is, every month, I take the net PROFIT from the month before, skim 10% off of it for future taxes (I have an account set up for this), and then divide everything up through the 7 categories (which I have 7 bank accounts for). Right now, as I own real estate, my contingency fund also acts as my “vacancies and repairs” fund for my properties, since this is what typically comes up as unexpected expenses.

Here’s what this does: It takes the stress out of money decisions!

You know what you have. Each account has its purpose and you know the overall system is working for you, to move you forward to help you reach your goals. With this system, there isn’t sacrifice. You want to buy something. You figure out what category it’s in. Do you have the funds? Yes/No. Super simple. No more being cheap and then not seeing the payoff. No more spending more than you have, or spending your savings.

They call it the “jars” system because you can start with 7 plastic jars, and literally put money into them. Even if you only have a dollar, it’s a great exercise to practice dividing it up into the categories.

The percentages aren’t critically important. It’s the act of doing this every month that’s important. However, a good goal is to bring down the necessities percentage and bring up FFA as much as possible.

With the system, you see where you are, where you need to be, and can still enjoy yourself along the way. Pure freedom!

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Kevin Koskella

Kevin is a podcaster and writer on living free, despite the crazy world we live in. Kevin travels full time and explores the world and how to achieve and maximize freedom in life.

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