Eh? You may ask, why this tip is not really about making more money, or methods on multiplying your money fast?
Alright, maybe this can come at later blogposts. But why most people are richer than the others, is not that they know how to make a lot more money, but they know HOW to manage their money better than others!
You can have a lot of money flowing in, from your job, from your business, from investments, from lucky draw, or whatever. But if it is not managed well, it will still flow out of your hands in no time :D.
First things First, let me tell you the 6 places you should place your money in. We call them your Money Jars. And how much money you should put inside these jars.
1. "Financial Freedom Account" Jar. (FFA) - 10%
Place 10% of your income, monthly salary, profits into this Jar. And money in this Jar must not be spent. It should be used for you to acquire passive income streams. Think of these as the golden goose that keep laying golden eggs. If you spend the money inside, it is like killing the mother goose that gives you golden eggs (your wealth). Start putting it, month by month, and you will see your goose become fatter (more money), and you can acquire more passive income streams to lay more eggs for you (money!).
Strictly speaking, the money in this jar MUST not be spent! In the future when you stop working, you can spend the eggs, but not the goose!
2. Long Term Saving/Spending Jar. (LTSS) - 10%
This jar is used for your long term expenditure, such as your end of year holiday, wedding dinner, house mortgages... etc. As it is 10%, you can also divide this 10% into small percentages, like 5% for holidays, 5% for my car... etc, if you have more expenditures.
3. Education. (EDU) - 10%
Save 10% of your money to learn. Equip yourself with latest knowledge, latest skills. Everybody needs to learn, and the world is changing really too fast. If we aren't learning new things, we are already behind others. And I mean NEW.
Take this money to buy books, audios/videos, attend courses, seminars, go for big events etc. Real education begins after academic education ends.
"Poor people stop learning once they graduate from school. Rich people start learning after they graduate."
4. Necessities (NEC) Jar - 55%
Let 55% of the money cover your necessary daily expenses. Food, transport, phone bills, house rents (if you have any). Many people tend to spend too much on this section, hence, they usually don't have any savings in the end. It's 55%. It may be lower than what you are currently spending.
If it's difficult to maintain at 55%, simplify your life. You don't have to eat at restaurants everyday yea? you don't have to spend so much on branded, or new stuffs so often too yea?
5. Play Jar - 10%
OK!! This is the Jar everybody is happy about. Erm, but it's not everybody also. Why you need the play jar?
There are people who spend too much time at their jobs, that they hardly have the time to play. They save up a lot , a lot, a lot of money, but they never get the chance to use it. Workaholics. This make their life severely unbalanced. This is not life!
On the other hand, this is the Jar that many people broke it on their first day they get their pay. They get their pay, and just spend it! but they still have another 30 days to go before their money come in again. Often or not, they spend more than their income.
So to keep everything in balance, keep 10% of ur income for play, and BLOW (spend) it every month. Spend it at a good restaurant, a short trip, have fun with it, to keep your life in balance. And only use the money in this Jar for your fun. Don't tap into other Jars for money .
6. Giving - 5%
Giving is you have to do, everybody have to do. Giving is a spiritual need for someone to grow.
Save at least 5% to give, give it to charities, give it to help others who are in need. If 5% is not enough, you can tap into your Necessity account for another 5%. So giving account-10%, Nec account- 50%. This is alright.
So this are the 6 Jars.
I've started putting the money I got in Nov into these 6 jars. Yup. So let's start doing it together yea! It's the simplest system to manage your money. Any queries, call me up, leave a message here, or email me.
Next! - The Secret Habits of Millionaire :D
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