The JARS Money Management System

Hey, it's Jesse Eckert, managing director for Harvacker International. And I'm excited for you to watch this video right now because it is going to be a game changer for many of you. Now, when I was young, my dad, T. Harv Eker, taught me this really important lesson, which was the biggest difference between successful people and unsuccessful people, rich people versus broke people, is simply how they manage their money. And with that, my dad came up with the six jar system, which is a money management system that is super famous and has worked wonders for thousands upon thousands upon thousands of people to not only get more in control of their finances, but also help them be actually become financially free. Now, we've created this worksheet for you that you can download at any time. All you need to do is click the icon or button below this video. It's going to open up a PDF automatically. You can fill it in online or you can print it out and it's going to actually take you through the six jar system so that you can personalize it for yourself and see how it works. Now, the jar system is just a money management system, which is six different jars and each jar and the jars are a metaphor, okay? So, you know, we like to use jars because you can actually see them. You can see the money pile up. But now that you know, online baking is so big and there's lots of different advancements, you can always open different bank accounts, and that's what I personally have. So the Jars are just six different accounts that when you make your money, 100% of your money, you divvy up into the different accounts. And what that does is it helps you manage your money for different situations. So you have your necessities, you have your things that you need to survive. You have your savings, your long term savings account, you have a play account, things that you just want to blow money on. All right? You have a give account, which is where you are giving back to charity and contributing. You have an education where you can pay for investing in yourself and educating yourself to a higher level. You have your financial freedom account, which is so important because this account is geared to help you become financially free. You have these different accounts that you use all the time, and when you get the money, you then divvy it up through the different jars. All right? Now in Harv's system, he has specific percentages that you put into each jar. Now, one of the most common questions that we get is, you know, I can barely afford to pay for my lifestyle. Right now, how am I supposed to manage my money? And to that, what I need to at least express to you is it's not about the percentage that you put in each jar, it's about the habit of managing your money. See, once you get in the habit of managing your money, once you start making more of it, you continue to stay in that habit. So there's a really great example of someone named Michelle. Michelle came to millionaire mind when she was dead broke. She had like basically no money. And so she learned the jar system and what she decided to do was she decided to manage $1. So, so she took $1 and she split it up into the different jars. Then the next week she took $2, then the following week she did $5, then the following month she did $10. Then the following week she did $20. And it continued to escalate and she did month or week, but she kept doubling it. And by the end of the year she was managing $1,000, right? And now guess what, she's a multi, multi, multi millionaire because she was able to not only manage her money, but she was able to invest her money really, really well the ways that we taught her. And she continued to make a lot of money. So the managing your money is where you start to get control of your finance to build that habit of managing that money. Because then you don't run out of money. Then everything that you do has a designated place for it. Holidays come up, you have a designated place where that money is stored. You want to buy something for yourself. Well, is it something that's impulsive? Use your play account, you know, rents coming up or your mortgage coming up, you have money set aside for that. You never have to dig into any other area. So this is where you want to go with your manager money. I gotta say, when I finished college and started to self fund myself, when my dad cut me off and said, you know, it's time for you to get a job and time for you to, you know, make your own income and stuff like that. I said, okay, that's, that's totally cool, I'm ready to get going. That's when I started heavily managing my money. And I can't tell you how much of a blessing it is to have that money managed. It's not only a control thing where I feel so much more secure with our finances, but it feels good to know that I could go on a 21 day vacation and I have that money already set aside and it doesn't affect anything else in my life. And that's because we manage our money and we have done extremely well with our finances because we've managed our money. So for the last couple years, about eight years, we've been taking almost 35% of our income and investing that money into different income streams and different investments. And last year we looked at our net worth and was over a million dollars. And that's because we managed our money. If we didn't take that money, if we didn't take that percentage, then we would not be able to have that net worth. That money could be gone, it could be blown, different areas. So managing your money is so, so important and is really the biggest difference between successful and unsuccessful people. So right now I want to encourage you to download the six jar worksheet to fill in your own personal jar system and create it for yourself. And right now I'm going to answer a couple quick common questions that we get and hopefully help you through some of your questions that you have. So, so the first question that we get all the time is what if I don't have? So the, one of the guidelines for the necessities is 55% of your income should go to your necessities. Now what if 95% of your income goes through necessities, which is very common by the way. So don't feel bad, especially when you're starting this. The goal of the percentages that we teach in the jar system is, is a place where you want to get to. It doesn't mean that you need to start there. So I really want you to really understand that the habit is more important than the amount. I'd rather you manage $1 than stress about the percentages. So the percentages are there as a guideline for you to look at and for you to work towards, but doesn't mean that you can't manage your money without starting that right. So think of it, the habit is more important than the amount and you can get there as well. Now another common one is debt. So what if you have a ton of debt? Again, it's managing your money is the habit more than the amount. So if you have debt, what I would do is you take one of the jars, which is your long term savings, and I would probably split that up into two different jars. One goes for your debt and one goes for your actual savings. So instead of putting, you know, $50 into your long term savings, you're putting $25 towards your debt and $25 towards your savings. Now why not pay off your debt first before you manage Your money. Right. Well, that is a mistake, because what happens when you pay it off? Well, you're not in the habit of managing your money, but, Jesse, I will manage your money. Yeah, right. How is it working so far? Have you done it up to this point? Managing your money is probably not new to you. Maybe the system is, but you're probably not new to managing your money. So what I say is, get in the habit first, pay off your debt a little bit later. Who cares? At least you're in the habit. Then when you've paid off your debt, you're in the habit of managing your money in a very structured, systemized way. It's going to help you in future. Another question that we get all the time is how do I manage my money with the jar system through my business? And the answer is, you don't. You don't manage your money with your business with the jar system. You manage your personal finances with the jar system. So in business, you pay yourself a salary or you pay yourself a profit distribution. However you do it, whatever you're paying yourself is how you split up in the jars system. Okay? So the business is very different than what you do in the jar system. All right? So personal finance is different than your business. Another one that we get all the time is how do I do it with relationships? How do I. How do I make it work? Now, every relationship is different. Every person is different. But here's how me and my wife Jen do it. So we share our money, and some people don't, which is totally fine, but we share our money. So our main jars are all together. So we have all of our main jars. The one jar that we have different is called the play jar. And that play jar is basically where we have our own jars to play with. So if Jen decides that she wants to go buy, let's just say, a purse, and it's ridiculous in price. In my perspective, I can't say anything about it because that's her own play money. If I decide to go buy myself a nice watch because I want to blow that or I want to, you know, take a trip on a private plane if I really wanted to do something crazy like that, she can't say anything because that's my play money. What that does is it gives flexibility. It doesn't give any judgment. And it's fun, right? It's like you can use that play money for yourself and there's no judgment together. Now you can also set up a play account with your family as well for you guys to do together. But I really strongly recommend that you at least set up two different play accounts so that you guys can not have any judgment on what each other are spending. Another one is what should I do about credit cards? So how do I do that? The way that we do it is we put everything on our credit card because we have great money management. If you don't have good management, money management, I wouldn't start with credit cards. But if you have good money management and you're disciplined, what we do is we put everything on one credit card that we get a ton of points with. So we use the credit card to our advantage to get the points. Now, every couple weeks we go through the credit card statements and we write next to the statement what jar it comes out of. So is it necessities? Is it a long term saving? Is it one of our plays? We write it down, we tally it up and then we go ahead and take it out of that jar system. And we do that on a consistent basis. We never have any balance on our credit card left, so it's always zero for us. Okay, now one other question that we get is the financial freedom account. So if you want to start a business, where does that money come out of? Well, it kind of, kind of can go to your own discretion and it could come out of long term savings or it actually could come out of financial freedom because the business is going to actually help you become free. Right. I want to just clear something up that there's no strict rules to what goes in each jar. These are guidelines that you can follow. So if you're having trouble figuring it out, just put it in a jar, put it under there, whatever feels good for you. As long as you know that you're managing your money, you're not taking advantage of and not trying to shortcut the system. Right? So just be flexible with it, don't be so rigid with it. If you're not really sure, pick one, you're not going to get it wrong. The goal again is the habit of managing your money, which then helps you when you're making more money to then invest your money and become financially free. Another question we get is your financial freedom account. We encourage you through our Freedom first wealth coaching program to invest in passive income vehicles. Vehicles that are going to pay you on a consistent basis without you actually needing to spend time working in those vehicles or those investments. So what do you do with that money? Do you pay for your lifestyle or what happens with it? Well, until you become financially free, our recommendation is put it back into Financial freedom account, compound that money get. If you want to become financially free quicker then you want to invest your money quicker. Like I said, we over the last seven plus years we've been putting 30, 35% of our income into investments and we now have a net worth of over a million dollars because we continue to do it over and over again. We don't use that money ever. We use our business to make our money and we use our investments to invest our money. We keep it and enrolling and that's how you grow your wealth and how you continue to be become free quicker. So I recommend to at least put it back in there, compound, let it grow, become financially free and then make that decision. All right, so all of this is coming from our Freedom first wealth coaching program which is an eight week group coaching program that is very unique into helping you get on the fastest track to creating financial freedom. See, there's four really strong pillars to becoming free. First. First your mindset. You need a freedom mindset. The second is saving your money and managing your money. The third is making more money. How do you make more money so you can actually invest your money? Which is the fourth pillar in those pillars? There's lots of different elements. There's multiple different elements that we work on within that program and right now that program is available for you to enroll it. And we're actually going to be taking our next group of students and in the next week or so through this eight week coaching program. Now this coaching program is only open two times a year. It's probably the most comprehensive program to becoming financially free. And by the end of it you will be closer to reaching your financial freedom than you ever have ever in your whole life. We are going to be working on all the different elements that you need that are crucial to becoming financially free. And we've had thousands of students go through this program and absolutely love it. We so if you are interested in that program then go ahead and there's going to be a link below the worksheet as well. So there's going to be probably a button below the worksheet and that is going to give you more information about the Freedom First Wealth Coaching program. Managing your money is one of the eight elements. There's seven more that we work on with our students and by the end of this program you will be on the fast track to freedom. Thanks for watching this video. I hope you enjoyed it. I hope it cleared up some information about the JAR system. But the most important thing is to start doing the jars now. You're never too early. You're never too late. I started my first one when I was basically born. I ended up stopping it when I was in college, when I was, you know, not really making any money. And I didn't really follow the system because I was too cool, but really quickly learned, again that I needed to do the system. We have lots of kids who, you know, parents who started for their kids at a young age. We have lots of people in their 70s who started, you know, right then there. And the goal is to make sure that you become financially free by managing your money, because all the different ways of the system works to help you expedite that freedom. So thanks again for watching this. Hope you enjoyed it, and have a great rest of your day. Sam.