How to NOT end up in Squid Games

Introduction

You may be familiar with the Netflix series ‘Squid Game’. It has been such a huge success.

Just about everyone you talk to has either watched it, finished it or watching it again.

While Squid Games is certainly very entertaining and gruesome, it also has a very powerful message behind it: the power of debt.

Every contestant was chosen because of their crippling debt, and why they were willing to participate in the competition: to potentially eliminate their debt (and keep their organs).

Now although Squid Game may not be real, severe debt unfortunately is.

According to Financial Capability UK:

“Over 20 million of us can’t manage our money, 11.5 million have less than £100 in savings, and nearly 9 million of us are in serious debt [in the UK].”

In this blog, I want to talk about how I stay out of debt: by managing my money.

In doing so, I hope you too can apply these same principles to stay out of debt, and out of the Squid Game!

Manage your Money or your Money will Manage you

The money management system I use is one that I came across by T. Harv Eker, known as the ‘Jars Money Management System’.

I have been using this money management system for a few years now, with my own modifications, and I haven’t found anything out there that’s better.

So what’s so special about this “Jars” system. There are plenty of other money management techniques out there.

That’s true there are plenty. For example: There is the “50/30/20” system.

What this means is that you take your monthly income and divide it as follows:

• 50% of your income goes towards essential spending i.e. rent/mortgage, food, bills, etc.
• 30% of your income goes towards your saving goals i.e. holidays, house/car deposit, etc.
• 20% of your income goes towards fun activities i.e. eating out, cinema, sports games, etc.

While this is good, it didn’t really meet all my needs.

For example, I wanted to not only do all of the above but also have money for personal development, investing and donation.

Jars Money Management System

So how does this money management system work?

Basically, you take your monthly income, and divide it into 6 different bank accounts as follows:

• 50% = Necessities
• 10% = Play
• 10% = Save
• 10% = Education
• 10% = Invest
• 10% = Give

Assuming your main current account is your ‘Necessities’ account, the other accounts you open up can be all additional current accounts or savings accounts, whatever you prefer.

The only difference is whether you want a debit card for each account or not.

Let’s take an example: Say you make £2000 net income per month i.e. this is actually how much comes into your account after tax. Therefore, you would divide your income as follows:

• 50% = £1000 = Necessities
• 10% = £200 = Play
• 10% = £200 = Save
• 10% = £200 = Educate
• 10% = £200 = Invest
• 10% = £200 = Give

This for me ticks all the boxes. Every month this means that I have a budget dedicated to not only essential spending, but also money specifically for having fun, saving for big expenses, money for spending on personal development, money for investing, and money for giving. Now let’s dive into more detail on each category to understand them a bit more.

Necessities (50%)

This budget is for essential monthly living.

You would use this budget to pay your rent/mortgage, council tax (if living in the UK), gas/electricity, water, internet, phone bills, etc.

With the remaining money, you would then use this for other essential spending such as food shopping, fuel for your car, paying for transport to get to work, etc. for the rest of the month.

It helps if you have a specific debit card for this.

This is not the budget that you would use for eating out at restaurants and take-aways.

For that you would use your “Play” account.

Play (10%)

Simply put, this budget is for having fun with!

It is guilt-free money that you can use for ‘spontaneous’ purchases.

It’s the perfect budget for people that don’t spend any money on treating themselves and for those who spend too much on treating themselves.

It’s important to treat yourself and your family every month, to feel like your ‘wealthy’.

If you want to go to that concert or musical, you can do that without it digging into your precious ‘savings’ account.

Savings (10%)

The savings account is an interesting account.

Many people think that your savings account is for adding to but not touching ever.

I disagree. Your savings account is for saving up towards a specific goal!

Whether that’s saving up for a holiday next summer or for a house/car deposit, the purpose of this account is to specifically save up towards something you want.

Then, once you have saved your required amount, you can spend it!

You then repeat the process again, working towards your next big expense.

I see so many people saving without a goal, with the money just sitting there doing nothing. This is not your ‘pension’ account, but your ‘long term savings for spending’ account.

Educate (10%)

This is a very important habit that you should adopt into your monthly budget: money for personal development and further education, in any field that you’re interested in.

This could be in the form of books, courses, coaching, conferences, etc.

For example, if you need help getting in shape, this would be the account you use to pay for a personal trainer, without feeling guilty.

Or if you want to buy that new course that teaches you how to play the guitar, this would be where the money comes from.

Whatever you are into, it’s important to have a budget allocated to developing your hobbies and interests.

Invest (10%)

Have you ever wanted to invest in property, invest in the stock market or start a business?

That’s right, this is the account for all that.

This account is specifically dedicated to not spending your money, but GROWING your money.

The best part about this account is that it is specifically different to your savings account.

So that, if for whatever reason your investments do go according to plan, it won’t affect your savings.

What to invest in you may ask? We’ll leave that for another blog!

Give (10%)

Last but certainly not least is your ‘giving’ account.

This is money that’s only purpose is to be used for donating i.e. giving it away, without the expectation of anything in return.

Whether that means giving to charity, paying tithes at church, or helping a friend in need, it’s entirely up to you.

The idea is that you donate 10% of your income every month.

You may be thinking that’s a lot of money?!

However, let me tell you, there is nothing better than donating your money and expecting nothing in return. The feeling that you get is worth every penny. Try it for yourself!

Conclusion

And there you have it: the easiest and most effective way to stay out of the Squid Game!

There’s a quote that says:

“Being prepared isn’t half the battle, it IS the battle.”

The most important thing after following the above is to stick to it i.e. once your play account is depleted for the month, don’t go dipping into your other accounts!

More importantly, don’t be tempted to ‘put it on your credit card’ – that’s how real debt starts.

Just leave it to the following month: if it’s really that important, it can wait.

The most important thing is to not spend money that you don’t have.

And that’s my money management system! The money management system I use to keep me out of debt.

It has worked wonders for me, and I hope it does the same for you too.

Let me know what you think of this money management system.

Do you have another system that you use?

Let me know!