World's Easiest & Most Effective Money Management System

T. Harv Eker taught a simple money management system at the Millionaire Mind Intensive seminar.  The basic idea is to create multiple accounts to hold your money and the money in each account is used only for a specific purpose.  The first account would be your Income account where you would have your pay check(s) deposited. Then you would take that money and split it into the following six accounts using these percentages:

Income Account (Pay checks are deposited here and then split between the following accounts):

1.  Financial Freedom Account (10%)
2.  Long Term Savings (10%)
3.  Education (10%)
4.  Necessities (50%)
5.  Spending (10%)
6.  Charity (10%)

The Financial Freedom account is the money you put into investments such as real estate, stocks, bonds, commodities, business income streams, etc.  This is your passive income account.  You never take money out of this account but money such as interest that you earn from this account can be put into your Income account or kept in the Financial Freedom Account to be reinvested.

The Long Term Savings account is used for things such as saving money to buy a car, go on a vacation, save money for college for the kids, make a down payment on a house, etc.

The Education account is not an account to save money for your kids to go to college (that is the Long Term Savings account).  This account should be used to further educate you in your life and your business.  Examples of this would include paying for your own college education, continuing education after college, seminars, books, CDs, personal or business coaches, etc.  This account should be actively used to improve yourself.

The Necessities account would be used to pay your mortgage or rent, buy food and clothes, transportation expenses such as gas and maintenance of your car, bills such as electric, water, and gas.  This account pays for the basic necessities of life.

The Spending account is meant for exactly that - you have to spend it!  This account must be depleted each and every month on fun activities and purchasing frivolous things!  This is very important because if you do not  reward yourself for all your hard work life will become a burden instead of a celebration.  Live life to the fullest now, not after you retire in 40 years!

The Charity account is very important.  Always give 10% of your income to your church or favorite charity.  If you believe in tithing then this would be the account you would pay tithing out of each month.  It is very important to give back a portion of what we receive to show our gratitude for that which we have been given. The more grateful you are the more likely it is that you will receive more of what you are grateful for in the future.

I would encourage everyone to implement this simple money management system in your life.  Even if you aren't able to do so exactly as described above with all the various percentages just start with what you have and work toward the ideal above.