Personal growth

What is JARS?

Have you ever heard of the JARS system? When I found out about this system, I was blown away. It is such a simple and elegant, yet effective way to make sure your money goes where it’s supposed to.

Today I will go through this elegant money management model and we will also translate it into a planning system as well.

The JARS system: How it works

So the system is organized in 6 categories, or JARS, as Harv Eker calls them. picture them literally as jars where you put your money every month.

This is how it works:

  1. Necessities 55% of income. (Rent, food, electricity etc.)
  2. Financial freedom account 10% of income.
  3. Long term savings 10% of income. (Big purchases, “rainy day fund” etc.)
  4. Play 10% of income. (spoiling yourself and your family)
  5. Education 10% of income. (books, courses, coaching, mentoring etc.)
  6. Give 5% of income. (charitable donations)

The idea is that before you do anything with your money, you immediately place the right amount in your JARS. One big mistake that many people make according to T Harv Eker and many others, is that they pay their expenses first, before they pay themselves.

This way you build a habit of paying yourself before you pay your rent for example. You might say: “That’s easy to say if you have money. But what if you don’t? Then what? You can always choose to manage a part of your money this way.

Can we use the JARS system in our daily planning as well?

I think that you actually can apply this system into your daily planning as well. According to Eker (and many of his followers who have tried out this system), something happens when you put your awareness on something. If you manage your money intentionally and consciously, the money will do its job better.

Maybe we can adapt this model to our planners as well? As a “planning addict” I always try to find ways and models to fit into my calendar and planning style, so I was intrigued. Could I fit this model into my planning system? I decided to find out.

So this is how I “translated” the JARS into calendar events that might work for me. I took a 40 hour work week as an example and translated the percentage into hours per week:

  1. Necessities 22 hours/ week (work on things that pay the rent and puts food on the table: blogging, writing, courses, marketing etc.)
  2. Financial freedom 4 hours/ week (work that makes money in the long term. Example: write a book)
  3. Long term savings = long term planning. 4 hours/ week. (Planning and visualizing for the future. What are my long term goals?)
  4. Play 4 hours/ week. Don’t skip out on this one! Even if it can be tempting to skip this in order to gain 4 hours doing something else, playtime is extremely important. Do something that evokes your highest joy and excitement during these 4 hours, and your planning will spark with creativity.
  5. Education 4 hours/ week. Read books, enroll in courses, attend seminars, watch educational Youtube videos!
  6. Give 2 hours/ week. Make use of this time every week to really dive into and plan out how you can best contribute back to society and the collective. Plan both short term and long term.

So to sum this up:

JARS is originally a money management system, but as you have discovered in this article you can use it for time management and planning your week as well.

The JARS system contains of 6 “jars”, or bank accounts, where you place a designated percentage of the money you earn every month.

You can start with as little as ONE DOLLAR. The amount of money that you have isn’t important, and is certainly not an excuse for you to keep up with a sloppy money management habit. Start today and you will see your money grow in your bank account.

See T. Harv Eker’s own explanation of the JARS system

Related article: Convert your creative flow into cashflow

Related article: Happy Money

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