Please enable JavaScript.
Coggle requires JavaScript to display documents.
03 Money Management Jar System - Coggle Diagram
03 Money Management Jar System
intro
Income = total incoming money (salary, rent etc) - total expenses
Has anyone read the book millionaire next door.
the book can be summed up in one sentence
All the rich people are good at one thing that is money management
So lets learn money management
lets learn the simplest form of money management that I have used for years and this system alone I will attribute to helping me achieve FF and stay focused on the journey to complete abandunce
There is a simple trick here also the one we have talked before - Habbit
Habbit is more important than the amount of money
Lagan Movie Example
innitially all the players were running where the ball went.
Later the coach lady told that each person has a task and an area of work and that they should be focused on that area only. Every one then had a specific task.
Just like this in any sport there are players who are assigned to do a certain tasks, everyone does not do everything.
We have to learn and make our money also to work in this way. Every rupee must have a specific task
Jar 2 NEC 55%
LOCAL TRAVEL
Car repair
car wash
car service
public transport
parking
car petrol
Society Maintenance fee
Home Electricity
FOOD
home food supplies
Home food Delivery
Home repair
gas
internet
maid
home supplies other than food
gardner
house tax
HEALTH
Critical illness cover
health insurance
medicines
PET
pet grooming
pet toys
vets
tv subscription - netflix, hoststar etc
booze
Excess - LTSS and FFA
Jar 5 PLAY 10%
Hobby equipement
Local outing
Spoil yourself - buy what you might not buy otherwise
movie
mall
non essential purchases
amazon non essential purchases
Excess - Try no to carry excess - but it get accumulated - can be used as Vacation fund
Jar 3 EDU 10%
Online Courses
Paid Seminars
Paid Courses
Books
Experiment on your learning
Excess left is saved to EDU fund only and cannot be spent anywhere else
This is your education, not saving for your children's education
If you think education is expensive - try ignorance - thomas edison
My wealth can only grow to the extent I grow
Jar 2 LTSS 10%
Emergency Fund
No salary fund
Retirement Fund
Medical Urgent
Call it contingency Fund
Long term saving for spending
Vacation Fund
Buy something for home
Down payment for your dream home / car
Excess ?? No excess
Things that you want to spend on but keep putting it off coz you never have enough money
You can have multiple sub accounts here
Repaying down your debt is best done through LTSS. Habbit is important otherwise you will get into debt again and again.
Jar 5 GIV 5%
Spend your time for helping other for free if you cannot spend money
Donations
Gifts
Jar 1 FFA 10%
Aim: build passive income = NEC
Rule # 1: Always pay yourself first
This is the mummy Goose
Principal of this fund can never be spend to expenses
Can be spend for
Starting a new business
Buying a passive income creating business
This is not working capital for business
When should you kill the mama goose?
You can write in your "Will" that after you die, only the returns from this money can be distributed and the principal keep on growing. - Nobel prize
If you want to learn more about how to start a business and how to buy a business that is already producing passive income you might be interested in my other program
Outro
Financial Freedom Classroom especially designed for India
Download the pdf for Jars Budget System for both the less salary and the expanded salary
When your salary increases
FFA will increase and the strategy of investment should be defined
Video Plug - See my other video for understanding what strategy I use to invest in mutual funds
LTSS can be more than 1
NEC % comes down dramatically
this can be done by managing your expenses and paying your debt also
as remember income is not the total amount you get in the salary. Income = total incoming money (salary, rent etc) - total expenses
Emergency Funds
Remember to budget for tax
YNAB 4 Rules
https://www.youneedabudget.com/the-four-rules/
I will teach you to be rich story of a women how loved to buy more shoes but traveled by public transport and did not buy a car
You can move move money from one account to another within LTSS
Names for
LTSS long term saving for spending
Cash on Purpose
Save it forward
Spending bites
Goal Plan
Save for tomorrow
Save for it
Cashforward
BudgetingForward
Save for spending
Saving with purpose
I can save this ICST
MAKE A WISH
Financial Freedom Account
Netwealth Account
Fund the freedom
Prosperity account
My freedom Account
Wealth on demand
Growth
Payfirst
Mama Goose
Mother India
Never Work Again
NEC
Feed my self
My everyday wallet
✅My daily budget
Essentials
Jar
Account
Bank
Fund
Vault
Pockets
Wallet
Gullak
Dabba
Tijori
Play
Splurge
Reward
Give
Gifts
give and gift
GAG
I love you