My Own Jar System

I actually came across the Jar System before I was even interested in finances... when I was in college... where my only financial problem was how to play DOTA in the internet cafe... where I was also flat out broke. College life without income to summarize it. What was I talking about? Oh yes, Jar System.

Jar system is a money management system that allocates your money on certain things. This was invented by T. Harv Eker and has been adopted by some local personalities like Miriam Quiambao and Bo Sanchez.

At first, the allocation of percentage seems to be off to me since it has a high percentage on the Wants and doesn't really include an Emergency Fund. So I decided to tweak it a bit that would emphasize more on attaining my financial freedom and also renamed it to The Seven Wealth Chest (because I love playing Role Playing Games and needed something that sounds cool and jars are just one sword swing away from breaking).

The Seven Wealth Chest

The Wealth Chest of Expenses (70% or less) - I actually just spend 50% or even less than my expenses in the house since I divide it with my sister (lucky me). The percentage will really depend on your lifestyle. If it exceeds 70%, I recommend to re-evaluate your expenses and live within or below your means. I'm not suggesting you live the lifestyle of a hobo but just take away what is unnecessary. Yes, softdrinks, eating in restaurants like 10 times a month, burning money are unnecessary. Lower some of your expenses like saving electricity for your electricity bill or take away your ice cream fund (do people have this or is it just me?)

The Wealth Chest of Financial Freedom (20%) - I recommend 20% (or more, if you can) since this will be allocated for your financial freedom which eliminates the burden of financial problems in the future and attaining your dreams like owning a mansion and a year supply of ice cream... or a mansion made out of a year's supply of ice cream. Better put these on Mutual Funds or in Stocks which the rate of return is high and you're also taking advantage of the power of compounding interest as years go by. You can also use this for a long term healthcare insurance which has an investment component for your healthcare needs when you retire.

The Wealth Chest of Emergency (5% or more)- this is allocated only for emergencies and in case you got fired from your work, you can pay off your expenses while unemployed and not worrying about praying for money to grow on trees. I recommend you save 3-6 months worth of your monthly salary. Put it in your savings account since it's quite liquid, meaning you can easily get it in case of emergencies.

The Wealth Chest of God (10% or more) - this is allocated for your tithes and charity (not your neighbor Charity...unless she really needs the help). Your tithes is a way of recognizing that whatever you have earned is because of God and you are just returning what belongs to Him. If you don't believe in any of it, then it's best you donate to some foundations, orphanages, or any humanitarian organization that you know of. It will make you feel really good inside. Like eating ice cream.

The Wealth Chest of Knowledge (5%) - this is allocated for your education to improve yourself and better equip you with knowledge usable for your everyday life. You can use this for books, seminars, getting a degree, or anything that provides you with the right education to what you want.

The Wealth Chest of Recreation (5%) - basically this is allocated for your enjoyment like watching movies, eating out with friends, go bowling, going to the beach, anything that your heart desires and relieves stress from work.

The Wealth Chest of Items and Travels (5%) -  this is especially allocated for the things you want. Like gadgets that you would want to buy like that new smartphone that you'll just probably use for playing Candy Crush, or a new sofa to sleep on in case you had a fight with your wife. You can also use this for the places you like to travel inside and outside the country.

You can set your own percentage or allocations for your money. The important thing here is that you are managing your money. I do recommend to strictly follow the percentage for the first four and lessen the percentage for the bottom three in case the needs dominate the wants. I hope this helps you.