Friday, January 6, 2012

Mari Mengurus Kewangan Kita!! *K-Ching $$$*

Just read entry from Jie's blog. Quite intresting entry on financial management. Since, 2012 resolutions banyak bersangkut paut pasal saving, expenses and budget control, this system is really good to be applied. But through enough, duit boleh mengalir lagik laju daripada air. Kalau kita tak manage betul2, memang sampai sudahlah tak buat saving gamaknye. Tapi, as my director said this morning, saving banyak2 pun, sampai control semua nye, tak elok jugak. Bukan boleh buat mati pun duit tuh. So, berpada2. Plan some for saving, manage neccesities properly and wisely plan for desire thingy. But, what ever it is, I'm still thinking of side income to generate. *Keep on thinking my future bussiness plan hahahahaha!!*

Anyway, have your time to read. Mana yang sesuai boleh dipakai, yang perlu adjust kita adjust sesuai dengan keadaan kita, kn??

Good start for 2012 aight!! ;)

T. Harv Eker’s JARS Money Management System By Achiever on Dec 1, 2007 in Financial Success, Millionaire Mind Intensive, Millionaire Mindset, T. Harv Eker

During the 1st Millionaire Mind Intensive seminar in Singapore, Harv Eker introduced to people from all over Asia about the world’s simplest, easiest and most effective money management system.
Harv suggested that everyone can use the JARS system to better manage one’s money. The key between rich and poor or middle class people is their ability to manage their money. Rich people are excellent money managers and poor or middle class people are less-savvy when it comes to managing their money. And of course, there are many other distinctions that set the rich, poor and middle class people apart. I will go into that on my later blog post as I intend to discuss more about the JARS money management system in this post.

The most important part of money managing is separating your income into different accounts for specific purposes. I will outline the various accounts for the JARS system as well as their % breakdown of how one should divide their money to manage below:
  • Financial Freedom Account (FFA) = 10%
  • Long Term Savings For Spending (LTSS) = 10%
  • Education (EDUC) = 10%
  • Necessities (NEC) =55%
  • Play = 10%
  • Give = 5%
Anyone can start using this JARS method of managing their money even though if you think you do not have a lot of money to manage. The key is to develop a habit of managing your money, but not how much money you have available for you to manage. One must get into the habit of managing their own money, and you can start with as low as $1 to begin using this system.

Here are how the JARS system works:

Financial Freedom Account (10%):

Put 10% into your FFA whenever you receive money, such as your salary. You must NEVER, NEVER spend the money that you put inside your FFA account. Any money inside the FFA account can only be used to purchase or acquire passive income streams to grow your money. You may spend the interest acquired from the FFA if you choose to, although it is recommended that you do not. Keep the interest inside the FFA to grow your capital and interest faster. Think of your FFA as the golden mother goose that lays you golden eggs, if you spend the money inside the FFA, it is akin to killing your mother goose that will bring you golden eggs (your riches). Instead, keep the baby geese (FFA’s interest) that the mother goose is giving you, and you can grow more baby geese (your wealth) even faster. As you may already get it, the idea is to create a golden goose! You may prefer to think of the FFA as a legacy that you can leave behind for your future generations. If you are one who believes in the law of attraction, this FFA is actually your money magnet. Keep putting more money into your FFA and attract more $$$ into your life! Put $$$ into your FFA account everyday if you can, even if it is just a penny.

In summary, the time to spend your FFA capital is NEVER! When you stop working, you get to spend the eggs but never the goose!

Long Term Savings For Spending (10%):

Put 10% into your LTSS whenever you receive money, such as your salary. The money inside LTSS can be used for major expenditure such as savings for your children’s education, buying a house for yourself, keeping aside contingency funds.

Education (10%):

Put 10% into your EDUC whenever you receive money, such as your salary. You can use the EDUC funds for your self-education, for examples, books, seminars and events etc. Everyone needs to learn, especially in this changing world. Grow your comfort zone through learning and doing. If you are not growing, you are dying!

Take this quote from Ben Franklin: “If you think education is expensive, try ignorance!”

Necessities (55%):

Put 55% into your NEC whenever you receive money, such as your salary. You should use the funds inside your Necessities account to settle all your essential bills such as phone bills, electricity, clothings, eating, driving, travelling, hair etc. If you cannot survive on 55%, simplify your lifestyle. Instead of driving a car, perhaps you can take public transport, or drive a Honda instead of a BMW. Buy Converse jeans instead of Armani. There are people who cannot live on 55% NEC when they started the JARS system but over time, these same group of people are able to simplify their lives and live on 50% or lesser!

When your usual needs for instant gratification kicks in, think this: “Wealthy people think Long term. Poor people think Short term.”

Play (10%):

Put 10% into your Play account whenever you receive money, such as your salary. You are supposed to spend this money every month to pamper yourself. The key is to BLOW this Play money away every month so that you will feel good about having money and spending it! You should feel guilt-free when you spend this money every single month. Maybe you go for massages once every month, now you can use this money to really pamper yourself by going twice, thrice or as much as you want. Or you can try ordering champagne during dinner at a restaurant if you do not usually do. Or buy yourself a new gadget. Anything outrageous that you can do to pamper yourself and makes you feel really good. You are recommended to BLOW this money every month. However, if you need to save up for things such as short trips getaways that require a little more money, you can accumulate them up to a few months, say a quarter, before you use them.

Give (5%):

Put 5% into your Give account whenever you receive money, such as your salary. You can use the money for donations to charities, use it to help someone in need. Giving is important. If you choose to give 10%, take the extra 5% from your NEC and change the % allocated for NEC from 55% to 50%.
In my opinion, this is really a great Money Management System as it covers most aspects, if not all, on how one usually spend their money. It is so amazing simple, yet profound, method of better managing your money, regardless of how much money you already have! It can work for people who never save their $, or for people who needs to give to feel a sense of contribution to others/society, for those that need to learn and grow through learning, for anyone who just needs a little more help in managing their money.


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