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Planning for life and finances is like having a GPS to guide your way and keep you from losing the way. It helps you in prioritizing things in your life about which one should be done first so that you won’t waste your time and be disappointed in losing the way. Today, ACU PAY will introduce you to the secret of financial planning, which is ‘The Jar of Life’
The Jar of Life or the Pickle Jar Theory is a concept of time management that is limited to maximum efficiency by prioritizing things in life and choosing the most priority through four items: empty jars, large stones, gravel, and sand so that we can picture the importance of our lives more clearly. Each has the following meanings:
As it is known, the Jar of Life can be applied in any context of work to increase efficiency or even as a financial planning tool. The comparisons are as follows:
Putting stones without priorities, such as putting sand in first, will not fill a jar with all gravel and stones which is like we are spending too much money on luxury things for our personal needs till money that should be saved or should be invested is not sufficient such as emergency fund or post-retirement fund in case you are suddenly laid off.
So putting stones in a jar in the right order should start with the largest stone first, which is our life-critical savings, such as emergency funds, post-retirement money, tuition, and then gravel, secondary important money such as buying a house, buying a car, getting married or further studying and sand for happiness spending should be put last.
