Seen.By.Ice.Queen: coming to my senses

I'm certain I am not the only person to have attended T Harv Eker's Millionaire Mindset seminars/workshops and so I shall not bore you with the details. This entry is really to get to the gist of the theory and also as a reminder to myself on how to do the financial management.

I am lifting this whole passage from Guest Blogger, Laura Poole on this blog so for the full blog, click here:

If you just need to kickstart, here's a quick guide:

For every dollar you earn after taxes, you sort it in the following six “jars” (or bank accounts), labeled as follows:

NEC (Necessary): 55% of each dollar. This is for all your fixed and necessary expenses: house payment or rent, car payments, utilities, necessary clothing and haircuts, gas, food, medical, and so on.

FFA (Financial Freedom Account): 10%. This is your nest egg. You never spend this, you only invest it, and keep it growing. Eventually, the goal is to have the nest egg large enough that you can pay for all your fixed expenses from the interest, thus creating your financial freedom.

LTSS (Long-Term Savings for Spending): 10%. This is your long-term savings for big-ticket items like new cars, fancy vacations, big TVs, or any large purchases coming up. You do spend this from time to time, not just hoard it.

EDU (Education): 10%. Always keep growing. Learn constantly. Invest in yourself and it will never be wasted. Educational opportunities can come near and far–from financial seminars to cooking classes to college degrees and sewing lessons!

PLAY: 10%. My favorite jar! The Play jar must be spent every month! Splurge–spend it on things you normally wouldn’t, like a dinner at a four-star restaurant or a spa treatment. At most, save it for 3 months before spending it on something fun.

GIVE (Charity): 5%. Always give back, and give time as well as money.

You can make adjustments to the percentages, such as taking your Necessary funds down to 35% of your income (if you’re able to cover your necessary expenses with that amount) and then redistributing the extra 20% to other funds. It takes discipline. You will definitely see results if you start with dollars in jars.