Give yourself some (of your own) money.

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We go through life a lot of times being caught up in the other aspects of life; the bills, the wants, the needs, that many times we forget to pay ourselves both for savings and spending.  Typically when you hear about giving yourself some of your own money you hear them mention “pay yourself first” but always in the context of investing.  You should be paying yourself first to save and invest, but you also need to pay yourself in regards to play money, and saving for larger purchases.

If you ever just throw all your money in your checking account and every paycheck you’re surprised how much you’ve spent, hopefully, you can make some changes in your budget for yourself and have a clearer idea of where your money goes.

BUDGET – The “B” word

Let’s talk about the “B” word that no one wants to say, Budget.  Why have we made the simple budget something to disdain?  Though there are many different types of budgets to track what you earn and spend, instead of tracking expenses we’re going to focus on splitting our income into the 6 basic sections: Basic Necessities, Financial Freedom (Savings/Investing), Long-Term Savings for Spending, Education, Giving and Play money.  You should be able to allocate everything you spending into at least one of those sections, sometimes more than one.  How balanced are you as you use your money?

Consider the following monthly breakdown suggested from T Harv Eker (Multi-millionaire):

10% – Financial Freedom (Savings/Investing)

10%  – Long Term Savings for Spending

5% – Giving

10% – Education

10%  – Play

55% – Necessities


There is a good reason for the order here.  Though this is the initial layout, as you work through the budget and make adjustments you should be moving more of the money up to the top and lowering your necessities.  For those focusing on becoming Financially Independent, they will tell you that while you can start with 10%, if you want to accelerate your financial Independence you need to put as much into that category as possible.

Grab some cash – Prep work

Why on earth would we say to grab some cash?  Because cash is known as the medium for transactions.  Most likely your mind already associates cash with money and it’s value.  Having cash in your hands will give you a tangible association with money and cash.  You’ll see how it will work in a second.

All cash represents is a transfer of value.  You work and that work is transferred as the value in cash, and then from there you spend it on your needs and wants and everything else that you give value to.

With so many ways of transferring money digitally (credit card, Venmo, ACH) you can begin to see money as nothing you actually handle, just a bunch of digits on your screen.  By having cash physically on hand you can tangibly handle the money and it will create a stronger bond with money and how you transfer it.

Try it small first

While you may not be ready to identify everything that you spend and save, let’s try it on a small scale first.  As you transition from investing to spending your money you’ll always need to become an amazing money manager since you will always have an income that will need to be managed wisely.

The goal of this experiment is to see how good a money manager you are.  To begin, grab some envelopes or I prefer clear glass jars.  These will be known as your money jars, once you get the hang of using the jars you can move on to savings accounts or use a hybrid of both.  You will need at least 4 jars: Financial Freedom, Long Term Savings, Education, and Play.  You can add a 5th jar if you currently are not Giving and feel it will help.

Pay yourself, I found it easier to start with a weekly breakout than a monthly one because it was harder to wait for an entire month if I blew my play money.  Pick an amount that you can pay yourself weekly and break it into the 4 jars.  For example, since we have 4 jars, we could choose to split just $4 or $200, but let’s say we will split $40 a week, that will be about $160 a month.  It may seem like a lot at first but stay with me.  To start let’s put $10 in each jar; play, education, long-term savings, financial freedom.  After a week you have $10 in each jar and after a month you can have $40 in each jar.

The point isn’t how much you split up, but the act of actually splitting it up.  This helps you develop the skills and habits that will allow you to split up larger amounts later.  There are clients who have started with as little as $1 and others who build it larger each month, that it why it’s up to you.  But typically I’ve noticed most people can start with $20-$60 a week, depending on how much they spend each week.  It can seem restrictive at first but you’re working towards a habit, and hopefully breaking bad spending habits.


Playing the game

The rules can now be modified to adjust the base amounts.  I would recommend leaving at least $1 in each jar at all times (so you can’t claim you “have no money”).  You can pay less in some jars and more in others as the need arises but try to resist ‘stealing’ from one jar to the other, instead allocate more/less at the beginning of the week when you pay yourself.

For your play money, you will put that directly into your wallet for spending that week (leaving at least $1).  This may be hard at first if you are used to eating out often so you may need to increase this before you can dial it down.  Typically this is used within the week/month to be spent and not saved up.  As you use the money if you receive change (Thank You Sales Tax!), put that change directly into the FFA jar to help you ‘save your change’.  Similar to those apps that round up any payments and put it in a savings or investment account you are doing the same thing with the change from your cash.

The other three jars can mirror multiple savings accounts.  I have multiple savings accounts as well as jars since my wife and I often have different ideas for how we use our money for Education, Long-Term Savings, and Financial Freedom.

For your Education money, you save it up and spend it when you see fit to strengthen yourself.  Through books, seminars, audiobooks, mentoring, etc. This is used to make your life better by self-improvement.  Some examples we’ve used it for are books, certification training, seminars, sessions with alternative health practitioners.

For Long-Term Savings, I use the jar for the smaller items and the Savings account for the larger (longer time to save items).  Remember this is for your own personal decisions.  A few examples I’ve used my jar for is a new toilet, a new tablet, new sink and faucet, as well as larger purchases such as appliances and new carpet.  The point is anything that you are saving for (don’t need immediately) and will take you more than a month to save up for it.  It is ok to have multiple goals to save up for just identify the most important ones first.

For Financial Freedom, this is money that will not be touched to be used for anything besides supporting your lifestyle when your passive income can maintain your desired lifestyle.  You don’t need to be rich to be considered Financially Free, you need to have a passive income greater than your expenses.  There are many rich people who have expenses that match their income and they can’t ever get ahead.  You can use this to invest: in an IRA (Roth if possible), Real Estate, stock market, gold and silver coins, or private company stock.  This is outside of the typical savings that you already have setup for your 401k or automated investment, this is just extra money that you can consider new places to invest.  Have fun with it finding secure and high returns.

The Spousal Three-way Split

If you are married consider splitting 3 ways,  you each have your own personal jars (no questions asked how it’s spent/used), and you have a communal joint savings accounts for the larger items and items you agree on sharing the cost.  This is key, there are numerous arguments in marriages over spending money (often times just a small amount), this can help avoid those.  Now after a few months, if you come home with something you’ve saved up for, she won’t be able to blame you for spending money on it.  Likewise, if she comes home after spending on things she likes you don’t need to ask if she had the money for it because she had been saving up for it.

An alternative is you could get away with just the Play money split and Long-Term Savings since those are the two that get spent the quickest.  Usually, the education isn’t used that much and financial freedom typically can be pooled into a mutual account and investments are chosen together, but if you want separate options then keep with the multiple jars.

What I’ve come to learn

Over the course of the past few years, we’ve modified ours to include a number of savings accounts (paying high yield rates) as well as cash on hand.  Automated transfers are made to specific accounts on or the day after each paycheck, including a transfer to a Cash swap account.  This is used as a buffer for transfers into a specific account or withdrawn as cash.

For example, if I had $50 in the cash swap account and I had $40 in my Financial Freedom jar, I could put that $40 cash back into my main cash bank and transfer $40 from my cash swap savings account to my Financial Freedom savings account.  This process makes it easier since most online transfers and transactions don’t happen with cash but instead are transferred electronically via ACH.  So now funding your investment can happen from your cash jar to your savings account and into your investment account instead of actually depositing your cash to make the transfer.

Our bank of cash takes up a shelf in our closet, we use it to pay ourselves each week, it gets replenished either from a withdrawal of the cash swap account or through various cash transactions (selling old items on the classifieds, or from freelance work).  It all goes into the pool and a portion of it can be given as a bonus, though it still needs to be split out.

Keep track of your windfalls and allocated them accordingly, whether it be a tax refund, a bonus from work, some freelance work or anything else, know where that ‘extra money goes’.  I keep a different spreadsheet tab to adjust how I want to split up the money,  I don’t focus on the same breakdown as my regular payments,  maybe I want to put 40% to Financial Freedom, or maybe I have debt to pay and want to make a power-payment (identified as long-term saving), it doesn’t matter how you break it up as long as you prepare for it and immediately make the transfers to correspond.  Too many times people receive a windfall and a week or so later they ask themselves “what happened to all of that money I received”.

We’re all bad at actually tracking our expenses but if we can at least limit our expenses to what we have allocated in our accounts/jars then we can approve and make that transaction.

I know there are a number of apps and programs out there at either limit your spending or help you identify where your expenses are going, but it’s not about your expenses, you don’t get paid in expenses, you get paid in income and need to track your income where it goes.  I’ll be updating those programs as I get around to understanding the benefits.  Once you have made the habit to manage your money and at least understand where it is going, then you are on your way to reaching your goals.  And although you will still have some small immediate expenses you now have the skills to identify which category they belong to, make the transfer and move forward with your goals of becoming financially free.

What are some ways you have budgeted money for your different goals?  Have you used any good programs (free or low fee) that helped you more than you could on your own?

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  1. Very good and comprehensive post on the art of money management and creating a suitable plan that works for you. This sounds like a fun little experiment that I will enjoy trying out for myself. I have never been great at managing my money and need a trick to work for myself.

    All the best,

    Ben Kuriger

  2. Marc, I just want to say THANK YOU. I’ve already bookmarked this article for future reference, as it is 100% relevant to my goals and current situation. 

    I really like your old school method of using money jars to split up expenses, it’s a very hands-on way to familiarize yourself with controlling your own cash flow and get used to a physical budget. I too feel it important to reconnect with the value of your money, and your idea of using physical cash to do it is genius. 

    I have the all too common habit of using my cards with no regard to what I have in the accounts, pretty much saying to myself, “there’s money in there, no worries”, then wondering later where all the money went as I look at my balances. Then the “robbing Peter to pay Paul” process begins, just to make sure my actual necessities are covered. 

    My fiancee laughed at me when I told her about this article, saying she’s been trying to teach me how to budget for like 3 years, and I’m like, “but where are the money jars?” 

    Thanks again man, this is a valuable resource for me, I appreciate you taking the time to share!


    • Sometimes we make things too complicated and they have your place but you can’t just start with the hard stuff you need to start simple and see what works for you and what doesn’t before you can add to it. 

      Good Luck Brother

  3. This is an extremely important topic of discussion. This is a very great tool for mastering fanances. because i have never really had any financial training, a lot of what you shared here on your article are quite new to me. Financial freedom could well be dependent on this fundamentals.

    But how would you address the issue of spouse who don’t really get along in their finances? some of the problems come from the fact that one thinks he/she earns most of the income in the house.

    Thanks for sharing this article. As i was reading, i thought to myself… There a whole lot more to learn.

    • Yes, I may not be able to give an adequate answer in this response but there should be more written about it.  When sharing finances you both need to be on the same page and both need to feel appreciated and have some say in the finances.  

      Whether that’s having a joint pooled account for most everyday needs (rent, food, gas, utilities), and separate individual accounts to allow each one to ‘play’ with (similar to an allowance).  Or having specific jars for different categories.  The main idea is to find something that works for you.  

      Do some research on different ways to approach sharing finances and create some limits (i.e. if spend over $50 need consent of the other, if it’s not coming from your own personal ‘play’ jar).  Or the #1 change most people need to make is allowing each some sort of buffer or wiggle room.  When things get tense people can feel so restricted that they burst out, find an amount that works to allow them that wiggle room to use to go out to eat or pamper themselves with no questions asked.  

      Allow them a little freedom and they’ll start to self-manage themselves and their spending habits if they know they only have a specific amount to use on their own.  

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