There’s a Money Management System that one of the richest communities in the world teaches their children...
The Jews teach the “5 Jars System” to their children to instil the right money management habits…
👉🏼 You bifurcate your money into 5 Jars, each for different kind of spends.
👉🏼 The first jar is for your necessities like rent, food and safety - this spend should not exceed 50% of your income
👉🏼 The second jar takes 10% that goes towards long term savings such as a big purchase (e.g. house), a savings pool for your child’s higher education...
👉🏼 The third jar takes another 10% for you to spend on pleasures - for clothes, a new gadget, a vacation...
👉🏼 The fourth jar takes another 10% - which goes into investments - mutual funds, stocks, gold, real estate, fixed deposits - this is what you leave for long term compounding to play its magic on
👉🏼 And the final, fifth jar, is for 10% that goes into tithe... It’s money that you give away to the unfortunate, for the upliftment of society - to know that all that you have is not for you to keep alone, but you’re an instrument for betterment of others in society... you’re blessed that God is making you capable enough to contribute... it’s for gratitude, to keep your ego in check
No wonder they’re one of the wealthiest communities in the world.
Because money management is not about optimizing the return on your investment with a given amount of risk - it’s about building the right habits from a time when your income is barely enough to cover all your expenses.
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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.
Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of '17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23 years.
