A few years ago, it seemed that it didn’t matter how much I put into our bank account, it was gone at the end of the month and usually a little more. This was a little frustrating and stressful. When it came time to go on holiday in the winter months there never seemed to be quite enough to go on holiday, without going into debt.

A friend invited me to a 3 day course which he had free tickets for. I probably wouldn’t have gone, if I had to pay for it, but it did sound interesting.

One part was about saving money in Jars or Envelopes, the break down went something like this. You have 6 Jars/Envelopes (J/E) to split your income into.

• General Account – 55%:
• Financial Freedom Account – 10%:
• Education Account -10%:
• Long Term Saving for Spending Account – 10%:
• Play Account – 10%
• Give Account – 5%

General Account – The general account was to manage my everyday expenses and bills. This included things like the mortgage, rent, utilities, bills, taxes, food, clothes, etc and anything that we need to live, the necessities of life.

Financial Freedom Account – This was to help me become financial free. The money that I put into this jar was used for investments and building passive income streams.  The only time I was to spend this money was once I became financially free. Even when I became finical free, I was only to spend the interest and not the principal. The reason was that it was easy to keep spending and be back at the beginning with no money and no source of passive income.

Education Account - Money in this jar is meant to further my education and personal growth. Investment in myself is probably the best investment as I am always with myself and can create things in my life if I have the tools. I use this education money to purchase courses, books, CD’s, or anything else that has educational value to me.

Long Term Saving Account - The money in this jar is for the larger purchases, such as a new car or a holiday, maybe the house renovation that you have always wanted.

Play Account - This is a great account. The PLAY money is spent every month on purchases you wouldn’t normally make. No one else gets to tell you what to spend your money on. It may be very frivolous, the idea is to nurture you and not feel guilty for doing so. I’ve used this money to go out to the movies, skiing; I even bought an inner tube to float down a couple of rivers.

Give Account – This is money that you give away. Many people believe that you need to give money, but I don’t necessarily believe that to be true.

The Twist

So here’s my twist on it, I don’t think for most of us that having our month’s pay sitting in J/E on the kitchen counter is wise or advisable, yet it does give you the visual to see what is happening at a glance but it also gives anyone looking through the kitchen window the chance to have a Play account too.

What I did was to setup sub accounts, on our main bank account and every month it automatically deposited the 10% into their respective accounts. It went out each month without us having to do anything about it. We soon adjusted to the amount of money in the general account and learned to live within that budget.

The upside of this was that there was a lot less stress and worry about the bills and by the end of the year we had not really noticed any significant changes to our standard of living, however we had managed to save several thousand dollars that normally had just disappeared on things that we really had no idea what they were and hadn’t missed since we had not been buying them.

As for the 5% giving, there are a lot of people just getting by and giving 5% just puts them back in the hole further when they really could use the money themselves and I really dislike the guilt that is put upon people for not giving. I think giving is a wonderful experience and should not be over looked. However there are many ways to do this, whether it is your time, friendship or money.

If you don’t have the money, give some of your time or old possessions that you no longer need so that you receive the gift of giving and someone receives the gift of receiving.