Paano ba mag-ipon? The Money Jars Concept

I was thinking of something to blog today when someone asked me this question "Paano ba Mag-ipon?" at sakto lang na may alam akong solution sa kanyang problema. 

Marahil akala ng iba ay marami akong pera kaya madalas ay lumalapit sila para mangutang. Sa totoo lang, hindi naman ako mayaman. Kumikita ako ngunit hindi pa ito sapat upang tumbasan ang lahat ng mga pangarap ko sa buhay.Hindi naman sa pagdadamot kaya bihira ako magpa-utang. Madalas ko sinasabi na hindi ko kaya magpahiram ng pera dahil hindi ito ang solusyon sa ating financial problem. Eto lang ang kaya ko gawin, (kung willing ka matuto) ay turuan ka ng LONG TERM SOLUTION for a SHORT TERM FINANCIAL PROBLEM. 

PAANO MO BA I-MANAGE ANG PERA MO?

It was way back in 2008 when I attended a course by T. Harv Eker, ang Millionaire Mind Intensive. in Makati.

It was a seminar attended by one of my early mentors in the Finance Industry and as far as I can remember, it costs Php 60,000 per head just to attend the seminar in Singapore. But because my mentor's vision is to spread Financial Literacy here in the Philippines, we started learning the course for FREE and eventually sharing it to the public for FREE.

This seminar (aside from Robert Kiyosaki's Rich Dad, Poor Dad book) opened me to the world of Investing. I have poor money management habits before but because I was open to learn and willing to develop the habit of managing my finances, I found the long term solution. 

One of my biggest take-away is the concept of the MONEY JARS. 

This is nothing new. Matagal na ang concept na ito. Nung bata ka pa, alam ko sinabihan ka ng nanay o lola mo na ipunin ang pera mo sa ALKANSYA, PIGGY BANK, o BOTE na palagi mo naman sinusungkit tuwing gusto mo bumili ng ice cream o candy kaya wala ka naiipon tama ba??? Gawain ko din yan noon at lately ko lang nalaman na importante pala na madevelop ang habit na ito.

PAY YOURSELF FIRST! 

This is the first rule in managing your money. This simply means, before you pay others (utang, meralco bill, water bill, cable, postpaid, rent, other expenses), YOU SHOULD PAY YOURSELF FIRST.

HOW?

You need to set aside a portion of your income FIRST, before spending it. This is the simplest formula:

SALARY/INCOME - SAVINGS = EXPENSES

It sounds simple but it is HARD to enforce. Dito na natin ipapasok ang consepto ng money jars. 

Again. Eto ang pinakasimpleng paraan kung paano ka makakaipon. The purpose of the money jars is to develop the HABIT of managing your money. :) Paying yourself first is a CHOICE that creates FREEDOM.

So what's with the MONEY JARS?

According to T. Harv Eker, to develop the habit of managing your money, you must have six (6) money jars intended for the following purposes:

10% Give 

Syempre, pag may blessing dapat we learn to share dba? That's why may GIVE account ka dapat. 

The sole purpose of this jar is for you to form the habit of TITHING. This is a biblical concept of giving and surrendering to God your financial obligations.

It is written in the bible, from Malachi 3:10

"Bring all the tithes into the storehouse so there will be enough food in my Temple. If you do," says the Lord of Heaven's armies, "I will open the windows of heaven for you. I will pour out a blessing so great you won't have enough room to take it in! Try it! Put me to the test!"

Tithing is bringing the first 10% of your income back to God through the local church. When we bring back a percentage of our income in the tithe, we thank God, and we show Him that we trust Him to provide for us and we fight Greed because we put him first in our finances.  

10% FFA( Financial Freedom Account) 

The idea behind this is to create your GOLDEN GOOSE. Balik tayo ulit sa GOLDEN RULE: Pay yourself first. Your Financial Freedom account should exceed your desired income and allow you to be able to live the lifestyle you want.You will use this money to put into investment vehicles that will yield Passive Income (Stocks, VUL, UITF, Mutual Funds, Business, etc). Therefore, BAWAL ITO GASTUSIN because your Passive Income should Exceed your Active Income. When you stop working, you get to spend the eggs but never the goose. Do not Kill the Golden Goose that will lay Golden Eggs for you. 

10% LTSS (Long term savings and spendings account)

This will be the fund that you will use to buy expensive items such as Car, House, Vacations or expenses that will take 6 months to one year paying period. You may also us this fund whenever opportunities arise, kunwari may naisip kang business or franchise, or may magandang investment. 

10% Educ ( Education account) 

This is for your personal growth. Eto ang gagamitin mo to buy books, attend seminars, or take up masteral, etc. Use this to improve yourself. Basta the main purpose of having this account is for you to have CONTINUOUS LEARNING because Learning is a lifetime process. When you stop learning, you stop growing, when you stop growing, you start dying.

10% EMER (Emergency Fund)

This was not included in the seminar but I'm including it because it is important to have an emergency fund in times of emergency. Sabi nga sa lumang kasabihan "Kapag may isinuksok, may madudukot!"

BUILD YOUR EMERGENCY FUND. Build it para hindi mo kailangan galawin ang savings mo in times of emergency. The value of your emergency fund should be equal to 3-6 months worth of your monthly expenses.

10% Play (Play account) 

You read it right, PLAY!. 

Syempre minsan minsan ay kailangan din natin i-reward ang ating mga sarili for all our hard work. This is the purpose of the PLAY jar. You burn the money that you put in it in order to fund for your LUHO or doodads as coined by Robert Kiyosaki. You get to consume it on anything that will give you instant gratification.

In summary,

GIVE = 10%
FFA = 10%
LTSS = 10%
EDUC = 10%
PLAY = 10%
EMERGENCY = 10%

TOTAL = 60%

When you receive any amount of money (salary, paycheck, business, bonuses, etc) divide mo agad, WITHOUT HESITATION into these funds. 

But wait, there's more! 

After paying yourself, there will be a remaining 40%. 

What about the remaining 40%?

40% Nec (Necessity account)

Basically, this is for your basic necessities or daily expense! This is for your everyday IMPORTANT expenses like transportation, food. bills, and other living expenses. Wag mo na asahan na mapupuno ito because this jar is intended to be used to fund for your daily needs.

EH PANO YAN, KULANG YUNG 40% na pang araw araw na gastos!

Track your daily expenses using an excel file or a spending tracker app so you can see what you need to cut-off from your expense list and also look for cheaper alternatives. Remember to Spend within your means not above your means! 

So I did this system and since then, I have achieved many of my short-term financial goals. 

Since I've been doing this method, it became part of my mental system. Every payday, automatic transfer agad, automatic 10% agad for tithes, automatic every morning input agad ng expenses from the previous day to track my daily expenses.

You can keep your money into these separate jars or open different bank and investment accounts. 

Once you get the hang of it, it will become a part of your daily routine. It will serve its sole purpose of developing your HABIT of managing your finances.

Remember, the universal principle of management is, "Until you show them you can handle what you've got, you won't get anymore."

Like what T. Harv Eker said, It is not when you have plenty of money that you will begin to manage it. It is when you begin to manage it that you'll have plenty and the HABIT of managing your money is more important than the amount. 

START TODAY. 

Are you a Good Money Manager?



I really like this biblical story about the bags of gold that were entrusted by the master to his servants. Watch this video:

The Parable of the Talents (Matthew 25:14-30)

¹⁴ “For it will be like a man going on a journey, who called his servants^[a] and entrusted to them his property. ¹⁵ To one he gave five talents,^[b] to another two, to another one, to each according to his ability. Then he went away. ¹⁶ He who had received the five talents went at once and traded with them, and he made five talents more. ¹⁷ So also he who had the two talents made two talents more. ¹⁸ But he who had received the one talent went and dug in the ground and hid his master's money. ¹⁹ Now after a long time the master of those servants came and settled accounts with them. ²⁰ And he who had received the five talents came forward, bringing five talents more, saying, ‘Master, you delivered to me five talents; here I have made five talents more.’ ²¹ His master said to him, ‘Well done, good and faithful servant.^[c] You have been faithful over a little; I will set you over much. Enter into the joy of your master.’ ²² And he also who had the two talents came forward, saying, ‘Master, you delivered to me two talents; here I have made two talents more.’ ²³ His master said to him, ‘Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master.’ ²⁴ He also who had received the one talent came forward, saying, ‘Master, I knew you to be a hard man, reaping where you did not sow, and gathering where you scattered no seed, ²⁵ so I was afraid, and I went and hid your talent in the ground. Here you have what is yours.’ ²⁶ But his master answered him, ‘You wicked and slothful servant! You knew that I reap where I have not sown and gather where I scattered no seed? ²⁷ Then you ought to have invested my money with the bankers, and at my coming I should have received what was my own with interest. ²⁸ So take the talent from him and give it to him who has the ten talents. ²⁹ For to everyone who has will more be given, and he will have an abundance. But from the one who has not, even what he has will be taken away. ³⁰ And cast the worthless servant into the outer darkness. In that place there will be weeping and gnashing of teeth.’

What have you learned after watching the video? :)

Have you ever experienced a point in your life where you've lost a huge amount of money, say, getting bankrupt? Being in a bad debt? Losing all your savings? Being robbed? Failed in business? Scammed? Do you like to spend too much on unnecessary things?

During that time that you've lost your money from any of those circumstances, what did you feel? Angry? Lost? Regretful? Did you blame anyone for the money you've lost?

Was there also a time in your life that you've had so much money and you felt like you never wanted to lose it? What did you do with it?

In my previous blog about my financial journey, I've shared that I've lost almost half a million of hard earned money when I started a business and failed. I've always been "kuripot" especially to myself, I rarely buy stuffs because I like borrowing from my sister (hehehe :D) so I thought I was a good money steward for being thrifty. But it was also a time when I badly wanted to become financially free, I spent so much time doing business. To succeed in my career and finances had been my priority so when that happened, I came to a point in my life asking God, "WHY? "Why did I have to lose that hard earned money?" 

I felt so down, I felt like a complete failure, I felt ashamed for taking too much control of my life that I forgot about the one who had given me all the blessings in life. 

But you know, during those times, this is one of the most important lesson that God taught me, He told me, "Feona, I have to strip you away of everything so that you'll know what it feels like to have nothing. So that when you have nothing, you will have me."

God stripped me of the sense of "Entitlement."


Because every thing we have belongs to God. And our God is a JEALOUS God. :) 

When we worked hard for something, we feel the sense of "OWNERSHIP" over it, be it for a paycheck, a commission, whatever result of hard work, we always think"THIS IS MINE because I worked hard for it!" But the truth is, we don't own anything in this world. Everything belongs to God -- even our material possessions, you car, your house, and even your life insurance! 

See what Jesus did in Matthew 25? He tells us the story of a master who gave money to the three servants. One servant did a bad job in managing the money that he has been given so God took away his money and gave it to the other servant who has been diligent in taking care of his finances.

Whatever we own in this earth is God's blessing, therefore, what we do with it is important to Him. Our money belongs to God and he trusts us to manage what we are given because we are stewards of His blessings. We can prove ourselves to be trustworthy when we properly manage our finances, and when we do, He will trust us with more.

If God were to take a look at your finances today, would He see you as a faithful money manager? :)