Money Management 101: How To Manage Your Money For Financial Freedom

I am here to show you how to manage your money for financial freedom. Being financially free isn't just about making a lot of money.

Instead, it's about learning how to be smart with your money, and using it in a way that ensures that you can live the life that you desire, both now and in your future.

A lot of people struggle with basic money management skills, and end up learning the hard way, in the form of a mountain of debt and financial stress.

Money management is the one skill that every successful person has mastered. Are you ready to learn how to manage your money for financial freedom? In the words of David Ramsey, “You've got to tell your money what to do or it will leave.”

Watch the video below:

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Before you can even think about investing, you need to learn how to manage the money that you already have.

If you possess a scarcity mindset and don’t do the work to change your habits, it’s almost a guarantee that you will end up in the exact same place you were in before – drowning in debt.

When it comes to managing your money, there is a simple formula that I learned from T. Harv Eker. In his book, Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth, he teaches a very effective money management method, called the JARS System. This method is designed to teach you how to manage your money for financial freedom.

He suggests that you break down the money that you make and your expenses into six jars.

1. Necessities (55% of your income)

These are things like your rent, phone bill, Internet, car payments, etc. A lot of people get this part wrong, in that they spend 90-100% of the money that they make on these necessities. These types of people are living paycheck to paycheck.

2. Long-term Savings (10% of your income)

This is your “emergency fund” money. When it comes to saving your money, you want to make sure that you have at least 6 months worth of your income or expenses put aside in a savings account.

The reason why this is important is because you never know what is going to happen in life, whether that be a natural disaster, an injury, a job loss, a recession in the economy, etc. You need to be prepared in advance.

3. Financial Freedom Account (10% of your income)

This is money that you are going to put aside for investing in your future. The more money that you can invest here, the farther you will go.

I would say that 80% of my income goes towards financial freedom. Even though I enjoy a great life, I've been very hesitant to upgrade my lifestyle in order to match the money that I make. Why? Because I'm always thinking about the life that I want to create in the long-term.

4. Education (10% of your income)

The best investment that you are ever going to make in your life is an investment in yourself. This could be in the form of books, seminars, courses, coaching, etc.

Investing in myself has been one of the most important things that I’ve done that have contributed to my success in life. When you commit to investing in your personal growth and development, you are creating a better and brighter future for yourself.

5. Fun (10% of your income)

This money is for leisurely activities that you enjoy, whether that be travel, movies, entertainment, etc. It’s so easy to get caught up in the responsibilities of life, that we forget to let loose sometimes and have fun.

Make time to do things that bring joy to your life. Yes, it’s important to stay focused and follow your dreams, but don’t forget to enjoy yourself along the way.

6. Giving (5% of your income)

Giving a portion of your earnings towards a cause or charity that you are passionate about will bring a sense of meaning to your life. Moreover, it will train your mind to operate from a place of abundance.

This is how to manage your money for financial freedom. I hope this 6-step money management system helps you create the financial abundance that you desire.

Financial freedom isn’t just about having money. Rather, it’s having the freedom to design the life of your dreams – to do what you want and be who you want. Trust me when I say that it’s worth the hard work that it takes to get there.