The Financial Saving System I Wish I Knew In My Early 20s

4 min readFeb 1, 2021

Personal finance is rarely someone’s strong point. It’s not taught in schools and unless you’re fortunate enough to have parents teach it to you then you’re on your own. Recent studies show that collectively there is £72.1 billion worth of credit card debit in Britain with each household owing on average £2592.

Furthermore over 16 million adults in the UK have less than £100 in savings. With all of this it can seem intimidating to try and save. But there is one way to make this easier.

The 6 jars system is attributed to a guy called T Harv Eker and the way it works by dividing your money between 6 different jars.

Necessity — 55%

This is the largest portion. This is meant to cover all of your daily expenses such as rent, utilities, groceries etc.

I’ve heard people say that they can’t get their expenses to 55% of their income, if this is the case, we’ll cover what do it in a second. For this jar you’re most likely to use your checking/current account.

Long Term Savings — 10%

This is money that you put aside for bigger expenses such as going on holiday and is also used as a rainy-day fund.

Financial — 10%

This money you put aside and use to grow your own portfolio. It is meant for investing in stocks and bonds, or for staring a side hustle. (if you’re interested in starting one of those, I’ve written another Medium article on the ’21 Best Side Hustles for 2021’ which you can check out here)

Education — 10%

Use this money on courses, books, mentors etc. Anything that is going to help you further your own education and get you closer to your personal and financial goals.

Give — 5%

This money is for you to donate to causes that you are passionate about.

Fun — 10%

This is the money for you to enjoy yourself with. Meet up with some friends and have a few drinks at a bar or have a meal in a nice restaurant. After all, all work and no play made Johnny a dull, dull boy.

Once you’ve sat down and worked out how much goes into each jar the next thing to do is set it up. The simplest way to I’ve found to do this is to open additional savings accounts with your bank and name each one after the jars.

You can even set it up to have the money transfer over to the account from your checking/current account.

Whenever I explain this system to someone one of the first things they say is ‘there’s no way I could do this! My expenses are way more than 55% of my income.’ The first thing to remember is that the percentages are guidelines not rules.

If you need more than 55% to pay for necessities, then move around the percentages. Put only 5% into the fun & education accounts and make up your necessities account to 65%.

Some also ask about credit card debit. If you owe on your card, then take a portion money out of the long-term savings account and use that to pay down your credit card.

The real beauty of the 6 jars system is that it works no matter how much you’re earning. Whether you make £100,000 or only £10,000 you can use this method to your advantage.

Perhaps one of the best and most famous examples of this is the story of Michelle Burr. She was a student of T Harv Eker who at the time only had $1 to work with and following the system put her money into the various pots.

At the very beginning all she had in her fun jar was 10 cents. With this money she used to go down to the store, buy a pack of bubble gum and read the comic strip that was on the inside of the wrapper.

Over time she started to increase the amount of money she was saving, going up to $2 and so on. Now she is a self-made multimillionaire.*

If there’s one thing to take away from this, it’s that being able to manage your money is the fastest way to financial freedom and one of the simplest ways you can do that is with the 6 jars system. Nothing is set in stone with this system and you can adapt it as you see fit as your income grows.