advice

On the road to financial freedom

12:00:00 AM

Last February, I attended a seminar about personal finance. It was a tad too high-energy for my taste, but I did learn a lot. One of my most important takeaways from the seminar is a budgeting tool that I now absolutely swear by: the Money Jars. Here's the breakdown:

10% - Financial Freedom Account (FFA)
55% - Necessities (NEC)
10% - Long-Term Savings for Spending (LTSS)
10% - Education
10% - Play
5% - Give
JARS
Your FFA is the money you will never spend. You're only allowed to use it as capital to create passive income streams. LTSS, on the other hand, is money you can use for major expenditures that you're preparing for - like buying a house. It's also your contingency fund. Education is for self-improvement - something we often take for granted. This goes to books, seminars, and other learning opportunities.

Necessities is obvious, and if 55% isn't enough, you either have to cut back on expenses, or grow your income to match your lifestyle. Both options are okay - you just have to decide and commit. The Give Jar is important, too - it's a good reminder that money is a tool that you can use for the greater good.

Regardless of the amount of money you make, you have to follow this budget scheme religiously. You have to build the habit! Remember, it's our habits that set us up for success or failure.

You may want to give this a try. :)

isawisay

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Hello, reader! Thank you for wasting your time reading my blog. I do hope you enjoyed whatever you stumbled upon. :)