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A Single Pot Of Jars Into Many Jars

Ever since I've been using the 'Money Jar' way of accumulating wealth, I found myself changing in the way I think about saving and spending.

This 'Money Jar' method is not new and in fact, many have been using this for a long time to allocate their income into different jars.

How did it work for me?

POSB Expenses Jar
Self-explanatory right? I used the allocated money for daily expenses.

Most will only have this one type of account.

OCBC Emergency Jar 
You're supposed to only touch this money when you are in dire straits and where unexpected events requires you to draw upon this jar as a last resort.

In the past, I did not see the need to lock down part of the savings I had. In fact, I was drawing expenses from the savings I had. It became obvious that I was getting poorer. Today, I am trying to share this important lesson.

I believe you should always have emergency capital before you actually start saving for other goals.

CIMB Investment Jar 
Only invest with money you can afford to lose.The saying is true because you can face capital losses and if you cannot stomach the losses, you should look for low to almost no risks ways to grow your money. But note that inflation is yet another risk you have to contend with.

I put the money to work in an Exchange-Traded Fund(ETF) and allow the cash sitting inside to earn the highest interest among the 2 other jars. I also reinvest the dividends back into this account.

Difficulties 

With the allowance that ah gong(NS) gives me, the percentage for Expenses-Emergency-Investment jars are 49%-27%-24%. 

Now I do not just see all the money lumped together as just savings in one jar and that decreases the temptations to make impulse purchases. You can't make those purchases because it is 'money you do not have'. Easier said than done.  Over the festive new year, I bought some new shoes with money not meant for that purpose.

How did I justify the purchase by using money I have yet to collect from ang-paos(I bought before the lunar new year) into buying new shoes? I still don't know but they are so nice! LOL.


Eventually the Money Jars are as real as you make them out to be. You have to be disciplined. I am probably making a small tweak and adding another jar to save for the future. This also means I need to re-allocate money from the POSB Expenses Jar and CIMB Investment Jar into the new Savings Jar. This means cutting down on the inflow into either one/both jars.

Till next time,
Mr K.

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