So, Gray, how’s your attempt to kickstart money management?
I’m glad you asked.
The first time around I tried using the Jar System virtually – even used a particular budgeting app called Lumen Trails to track the spending. Total failure. Not only was there not enough room for fluctuating expenses in my “necessities” budget, the rest just seemed to get mish-mashed together.
That’s why I contacted the folks over at Land of Oos and acquired seven actual jars, labeled cleverly to make use of some old press-on letters I had laying around for correspondence. Here’s what it looks like:
I decided to take a baby step, and divide up $20 according to the jar system using actual cash. Here’s what it looked like:
- NEC: Necessities, 55%=$11
- pi: Passive Income, 10%=$2
- Edu: Education, 10%=$2
- LtSs: Long-Term Savings for Spending, 10%=$2
- JIC: Just In Case, 5%=$1
- g: Giving, 5%=$1
- P: Play, 5%=$1
I’ve had the money up there for about a week now. As you can see, there’s a problem.
The $2 Passive Income
As you can see, the NEC jar is empty. We had laundry to do today, and so that was no problem to put the $11 towards.
The rest of them, though, I’m having a hard time working out. Just In Case: that can stay there. Likewise the Long-Term Savings for Spending; Natasha and I have decided it’s long past time to get a new couch, and that’s a big goal.
“Give” is easy, too: The next time I’m going for a walk, I can put the $1 into my pocket for anyone on the street who asks for it. I can probably pretty easily find a $2 book on Amazon that will give me some insight or worthwhile ideas (or audiobook; this one on Morning Routines is in my queue to review). And Play? Well, to be honest, that one also is troublesome, just because I’m not sure what counts as “play”. But maybe it means a comic book or something similar. A 99¢ movie rental.
That PI, though. Passive Income. What can you do with $2 that contributes to “Passive Income”? According to 6Jars.com:
The money that you put into this jar is used for investments and building your passive income streams. You never spend this money. The only time you would spend this money is once you become financially free. Even then you would only spend the returns on your investment. Never spend the principal.
There’s a whole lot of things that don’t make sense to me there. It seems like it means to put it into savings (or a CD or something with a higher return rate). Other sites have mentioned Real Estate. At first I thought it meant invest in my own business, but that You never spend this money part rules that out.
What do you think? Is it possible to spend only $2 on something that is clearly passive income? What I’ve ended up doing is putting it into a mutual funds account I have (via the lovely Acorns app). It has a variable rate of return, but it’s been better than just plain savings, and it’s actually kind of fun to see the graphs that I don’t really understand.
Incidentally, I’m aware that physical money sitting in jars is wasting potential. That’s why I’m only using $20 this first time round – this is not a daily living, this is an exercise to re-route some neural pathways that have long been going pretty weirdly. Stay tuned for another “thinking about money” experiment that Natasha and I are putting into practice tomorrow!
I do something similar with sub-accts at my credit union, but also long time believer in change jars. My mother didn’t have a lot of money, and when i moved out to Wisconsin, i remember her using the change from her ‘jar’ which was a 5 gallon plastic carboy to buy the suitcase i used, and that made anthat impression on me. I kept a change jar for a long time, and used to cash it out once or twice a year for spending cash when i went on trips, it wasnt budgeted so that was fun money.
Now the change goes into my daughter’s piggy banks, the Acorn app looks interesting, will definitely check it out!