Managing Money – The JARS System

“Rich people manage their money well. Poor people mismanage their money well.” ~ Thomas Stanley, author of The Millionaire Next Door

The first time I picked up T. Harv Eker’s Secret’s of the Millionaire Mind, I read the quote above and caught myself saying, “I know that!” Trouble was I didn’t really know that. I just thought I did. I had been managing my money for years but not in the way that Harv explains in his book. The money management system that Harv teaches is called the money JARS system. Trisha and I have been using the JARS for over a year now.

Why People Don’t Manage Money

It has been my experience that people believe managing money will take away their freedom. They believe that managing their money will not allow them to be free and enjoy life to the fullest. I’ve been using the JARS for over a year and can honestly say that I feel I’m in a better position now to achieve financial freedom than I have been in years. In my opinion, this is true freedom.

I’ve even had friends say, “I will start managing my money when I have enough money” which is like saying I’ll start planning for my retirement when I’m ready to retire. I hate to say it, but if you aren’t planning for your retirement right now then you might not have a retirement fund to retire to. The same applies to managing money. If you aren’t managing your money now then you may not have any money to manage in the future.

What Are the JARS?

There are 6 jars to distribute your monthly income. The jars are:

  1. Necessity Account (NEC)
  2. Financial Freedom Account (FFA)
  3. Education Account (EDU)
  4. Long Term Saving for Spending Account (LTSS)
  5. Play Account (PLAY)
  6. Give Account (GIVE)

Here is a snapshot of the jars on my office desk at home.

The Impact

This system has had a massive impact on my life and I’m truly fortunate to have attracted it into my life. It’s purely simple, easy to set up and it works. I remember when Trisha and I first started using the jars in October of 2006. We had been using the system for about 2 months and I was calculating our net worth. It was a good way to track our progress and I was floored when I saw the result. I even had to double check my calculations because I couldn’t believe my eyes. At the time we had been using the jars for two months and had effectively increased our net worth by an astounding $4,000. Now I don’t know about you but $4,000 isn’t small change. It definitely got my attention.

After the third month of using this system, I asked Trisha to calculate our net worth. I wanted to see her reaction. She went through the numbers and then looked at me and said, “I can’t believe it. It’s working!”

Initially, we both had our doubts but after seeing the results first hand we have both become true believers in this money management system. We’ve consistently used the jars every month to manage our money. Without any significant change in our income and all expenses being treated equally our net worth has increased by a surprising 45% in the past 12 months. Once we learned how to apply this system we realized it was very simple and it didn’t require a lot of our time. Here is a list of the benefits that we’ve been fortunate to experience from using the jars:

  1. Our net worth has increased by 45% over the past 12 months.
  2. Created $800/month in passive income.
  3. We’re going on a ski trip to Whistler, BC that I had only dreamed about 1 year ago.
  4. We’ve earned $200 in interest from our all four accounts. We use ING Direct Savings accounts, currently at 3.5% Interest.
  5. We’re in a great position to manage any new money that we attract into our life.
  6. Created more peace in our relationship by resolving money issues.
  7. I don’t feel guilty about spending my own play money.
  8. We spend less time managing our money because we have a system in place.

Although there are many other types of money management systems out there, I’m biased to Harv’s system. The main reason I choose this system over others is that,

  1. It’s simple to set up and it works.
  2. Harv covers the jars system in more depth in his book, The Secret’s of the Millionaire Mind and his seminar, The Millionaire Mind Intensive.
  3. I have friends who are using this system. This makes it easy to ask questions and learn more.

For the rest of this article, see:  How to Use the Money JARS System


  • Janet

    Reply Reply November 13, 2007

    My husband used to use an “envelope system” which I sluffed off as an old-school relic of our parents putting money under the mattress. I’ll have to show him this and eat my words.. :-)

  • Steve

    Reply Reply November 13, 2007

    Hey Janet – that’s funny. The JARS are a little old school but now we’ve got them setup electronically. More on this in my next post.

    good to hear from you,


  • Brian

    Reply Reply November 14, 2007

    That’s fantastic. People don’t understand the the power of systems like these until they use them. When I read about it, it really resonated with me.

  • Steve

    Reply Reply November 14, 2007

    Very cuel… yeah Harv does a pretty good job. His seminar is worth checking out too!

    thanks for your thoughts.

  • mywealthkingdom

    Reply Reply November 14, 2007

    I am really glad that the JARS system works for you. But whatever system we use we must have discipline. We must be able to start and finish. A simple concept no doubt, but some people cannot even manage that.

  • Steve

    Reply Reply November 14, 2007

    No doubt – discipline is something earned not learned…. good point and thanks for your comment.

  • Jennifer

    Reply Reply February 12, 2008

    Have you seen this site? It uses the same idea.

  • Steve

    Reply Reply February 12, 2008

    No. Thanks Jennifer. I’ll explore this site further.

  • Roman

    Reply Reply July 21, 2008

    I like envolopes idea, and JARS method is something new (visually). I used to use MS Money to manage my finances, but the newest version is soo tricky to use that I am going to look for something different. And I need just 3 functions: deposit, withdraw, simulate cashflow. Especially the last one is great to have.

  • Jon

    Reply Reply January 21, 2009

    Mevlopes looks quite good, unfortunately not available for us over in the UK. I bought 3 jars, now I should probably buy the rest!

  • ty

    Reply Reply March 13, 2009

    I have just recently learned about both the jars system and the envelope system. It is simple, but I am making it difficult!!! I am currently trying to work multiple systems and getting frustrated. I have 6 accounts set up online for the jars system and have envelopes with those same accounts on them. I am trying to learn how to get the hang of Quicken. I already have an automatic withdraw set up for bills like :phone, car insurance,gym membership and rrsp s. Some simple advice for a simple guy PLEASE!thank you

  • Steve

    Reply Reply March 14, 2009

    Hi ty,

    You’re going to have to be more specific.

    What is your specific question about the JARS?

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