The three jars, a simple way to manage your money.
At PEMS Life, we believe small changes in how we manage our money can make a big difference to our future.
I advise my students to divide their money into three jars (or bank accounts):
Jar 1: Savings
When you get paid or are given some money put aside a percentage of everything you earn, ideally, up to 10%, if you can afford it. This is before you spend anything. The aim isn’t simply to save for something you want to buy. It’s to invest in ways that could generate more money, so your money can help build your future.
Jar 2: Needs
You need to consider the hierarchy of needs, prioritise the essentials: a roof over your head, security and nutritious food. These are the foundations of a stable life. You cannot make money or live your life if you are worried about your security, where you will sleep tonight and are hungry all the time, when we think about food this should be simple things, potatoes, rice, pasta, bread, water, meat, fruit and veg, not eating out, not processed food, not frozen dinners, just simple plain things.
Jar 3: Wants
This is for everything else, holidays, meals out, new furniture and the things that make life enjoyable. Spend what you have in this jar without taking away from your priorities.
Here’s the key: put your needs and future first, then spend what’s left on your wants.
Many people do the opposite. They spend on what they want first, cover their needs, and save only if anything remains. That can make it much harder to build a better future.
Change the order. Change your habits. Change your future.
PEMS Life — Real Support. Lasting Change. 💚
