Money Management System Forces Couple to Go on Vacation

Nov. 9, 2010 - PRLog -- By Drew Fraser

We have all read about money management systems that reduce spending, increase your savings and create goals for investing.  But have you every heard of a financial plan that includes vacationing to blow your ‘PLAY’ money before?  

A couple in Waterloo, Ontario completed a T. Harv Eker Millionaire Mind Intensive event in November, 2009.  Within that 3-day course, their financial blueprints were reset for an abundant future and a focus on financial freedom.  Immediately following the event, the couple began organizing their bank accounts following what was called the “Jar System”.  They created the different accounts for financial freedom, education, long-term savings for spending, everyday necessities, charitable giving and guilt-free play.  With each paycheck the money was divided into the different accounts and only to be used as required for each account.

Within the money management system, the financial freedom account is meant for building your “golden goose” and the play account is meant to be used for guilt-free frivolous spending.  The main rules for these two accounts are that the financial freedom account is spent only for investing and re-investing the gains to create wealth, while the play account must be spent each and every month in a way that makes the person feel worthy of and as though they have achieved wealth.  The play account spending is also to prevent the subconscious mind from undermining the focus on building wealth.  This is where it all went wrong for our young couple.

True to their commitment to the “Jar System”, the couple began paying bills from the money allocated to the necessities account and made plans for home improvements using the long-term saving for spending account.  They even started enjoying evenings out at high end restaurants, testing the finest local wines and indulging in French Champagne with their play account money.  The first few months seemed like a dream, bills were being paid, food was on the table, plans for a new backyard deck were in the works, they were having fun spending money on themselves and their nest egg was growing.  

By the start of the fifth month, the play account had accumulated close to $3,000.  So, either the couple was just not that much fun or they were not entirely playing by the rules outlined in this money management system.  So a decision had to be made, either stick with the program and spend it big-time or fall back on the old approach of just socking it away for a rainy day.  By this point the young couple was totally ashamed of themselves for not being able to spend all of the play account.  And with their next paychecks they performed a sort of punishment, a lesson not to be forgotten and booked a 4-day getaway vacation to sunny Jamaica!

In early May, 2010, the torture began.  The guilty feelings of not living up to their commitments and being a failure in their own eyes got to be too much.  As a result, the money had been spent; the non-refundable flights and beachfront 5-star all-inclusive resort package were booked and all the “what if’s” were running through the young couples minds.  Like “what if we really need this money later?” or “what if we come back and the plant is shutdown?”  Well not really, the questions were more like, “how can this be happening…?” and “what are we doing…?”  These were the questions asked when the drinks on the beach became empty and the bartenders brought fresh refills.  “No problem, mon” was the theme for those four days as the couple laid on the beach and splashed in the warm waters of Montego Bay.  The guilt of not living life to the fullest and spending the play account was almost unbearable if it had not been for the pain of a few sun burnt areas.  

Now our happy couple is committed to reaching a point where the play account is large enough each month itself for a trip to their favorite island.  And financial freedom is only a few “Jars” away.

A little background on the money management system mentioned above.  The system is simple in principle; create the different accounts for financial freedom, education, long-term savings for spending, necessities, giving and of course play.  With each paycheck, the money gets divided into the different accounts and only to be used as required for each account.  Meaning only money set aside for necessities can be spent on necessities so you have to decide early on what is a “can’t survive without” and a “nice to have”.  The largest percentage is divided into the necessities account (55%) with most others receiving 10% each except for the give account which was only 5%.  You can tailor the percentage to your specific situation, but what is most important is to start the system of managing your money with whatever money you can.  Because if you cannot manage a small amount of money, then how does more money solve your problems?  Or how could you possibly manage more and more money?  The principles of the wealth generating “Jar System” is outlined in the book, “Secrets of the Millionaire Mind” written by T. Harv Eker.

If you are serious about gaining control over your financial situation and implementing your own money management system, please start by visiting Applying Wealth Education at http://www.applyingwealtheducation.com . Our goal is to share knowledge for building wealth.  

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http://www.applyingwealtheducation.com/2010/09/01/learn-t...

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