Have you heard of the six-jar financial system? This is the money management system designed by Harford Eck, the author of "The Rich Think Differently from You". He once said in class that it is the most simple, easiest, and most effective way to manage money in the world.

According to Thomas Stanley's best-selling book "The Next Rich Man is You", after he visited many rich people with assets of more than 30 million in North America, he came to a conclusion that the common characteristics of the rich are: they are very good at managing the money they earn. And that's where the six-jar Financial Management method came into being.

Harford Eck wants to tell everyone how to manage their earned money in the most simple and easy-to-understand way. In his book "Rich People Think Differently from You" Wealth File #14 mentioned: Rich people are very good at managing their money, poor people are very good at losing their money.

It should be emphasized that the rich and poor here refer to thinking rather than money, and there is no meaning of praise or criticism.

How to use the six-jar financial management method? When your work income comes in, similar to the envelope method, divide your income into 6 parts in different proportions:

Jar No. 1: Financial Freedom Account (10%):

This is an account that allows you to earn passive income. A fixed 10% is allocated to this account every month. You can only use the money in this account when you have a good investment or career that can earn you passive income. It must be noted that you must not withdraw money from this account and spend it.

The money in this account can only be used for things "where passive income can be generated".

Jar No. 2: Education Account (10%):

This part of the money is for you to invest in your brain to learn and grow by yourself. For example, you can allocate the money for buying books every month from this. A fixed allocation of 10% of the money every month is used for study fees, so that you will not have no money to pay tuition fees when you see high-quality courses; or have the ability to enrich yourself and continue to remain competitive in the workplace after get off work.

The importance of the education account among the six accounts is one of two important, because investing in your own learning and growth can increase your income, which is equivalent to increasing the money in other accounts.

Jar No. 3: Essential Accounts (55%):

Controlling your living necessities accounts for up to 55% of your income each month, and this account is used to pay for your "essential" food, clothing, shelter and travel expenses. Such as rent/mortgage fees, water, electricity and natural gas fees, transportation fees, insurance fees, credit card fees, etc.

That is to say, the money you need to spend in order to survive is in this 55%.

Jar No. 4: Play Account (10%):

The money in this account is for your enjoyment, and the reason for it is to give you the motivation to keep your money. If a person climbs a mountain with maximum effort and without rest, one day he will stop and cannot climb any further. The same money is made to have a good life in the future.

But the endless sacrifice of short-term happiness only makes us go slower and slower, and eventually stop. Therefore, this account is for us to enjoy money without pressure, and the money in this account must be spent every month, and the accumulation cannot exceed 3 months at most. This account will be everyone's favorite account!

Jar NO. 5: Long-term savings account for spending (10%):

This account is also known as the Hopeful Savings Account. What can be expected? Arrange to travel abroad, buy a new car, boutique package, 3C products, as long as it takes a while to save for a while, you should buy it through this account.

The condition is that only 10% can be deposited into this account each month, so you can only start spending by selecting the items you want to buy first from the list of items you are looking forward to. If you have plans to pay off your loan early, this is also the place to pay.

Jar No. 6: Giving Account (5%):

This account is meant to help others with joy. Any account that helps people and feels content to it will work. For example, you can also use the money in it to buy gifts for others, or you can rescue someone when they have no change on the bus, but for most of them, charitable donations are more common ways to help others.