One of the best and simplest money management systems I know was developed by author and entrepreneur T. Harv Eker of Peak Potentials Training Program. His book, The Secrets of the Millionaire Mind, was on the best-sellers list for months. I've received many hours of business training directly from Eker and he is a master communicator and marketer. To my knowledge, Harv hasn't yet discovered Jesus. I continue to pray for that revelation for him. However, he has developed one of the best budgeting systems I've ever come across.

We've integrated this plan into our Lack Attack Budgeting System. Harv instructs consumers to budget according to "buckets." I call them "pots." Each pot is assigned a specific portion of your income and you spend accordingly. Lack Attack Members work through a process to plug their expenses into this system You can learn more about it by clicking on the link at the right under Debt Management Tools. 

Here is how the system works, with the Lack Attack philosophy infused:

Total Income - You take 100 percent of your after-tax income. This means ALL income. If you get an inheritance or a bonus, add the money to your Total Income Pot. The same goes with a raise or tax refund. It all goes through the same process. Next, every month you divide the total income into six pots (or categories):

1.    Tithe 10% - The top 10 percent goes to your tithe. You can read about how to select "good soil" for seed planting in "Plant the Seed in Good Soil" which is available on the Lack Attack site.

2.    Household 50% - This is where you budget for your standard living expenses including food, utilities, mortgage, car payments, debt reduction, clothing, personal expenses, etc.

3.    Fun Account 10% - Most budget plans for people trying to get out of debt fail because they create a spending plan that is too tight for comfort. That's why Harv recommends a 10% fun account. The "rule" is that it cannot accumulate for more than 90 days! In other words, you must spend it! You must have some fun!

4.    Saving for Spending 10% - Perhaps the house need painting or you need to replace the car. Keep this income in a savings account and plan how you will spend it. You might save for a car for several years or a down payment on a house. This is money that you set aside while it mounts up for those larger expenditures. This is also where large annual payments can be logged.

5.    Education & Growth 10% - People who are considered the most successful invest in themselves. They are constantly learning and growing. They read, attend conferences, take classes, listen to teaching tapes, etc. This category is to serve that goal. Have you always wanted to go to a big Believers' Convention? This pot will hold the funds to make that possible.

6.    Investment 10% - Most financial planners will call this "savings." But in this plan, your long-term savings should be invested and NEVER used. It's the Golden Goose theory. You might want to spend the golden eggs which are laid by the Golden Goose, but you NEVER want to kill the Goose! Let's say you have a Mutual Fund that pays dividends of $500 each month. Unless you want to reinvest all of the $500, go ahead and add it to your Total Income Bucket and then let it flow through your spending process along with your other income.

To learn more about this process, click on the Lack Attack Budgeting System link to the right.