What Is the 3-Jar Method?

The 3-Jar Method divides your income into three clear categories:

1️⃣ Needs – everyday living expenses

2️⃣ Future – savings and protection

3️⃣ Enjoyment – guilt-free spending

Each jar has a specific job. When one jar runs low, you immediately know where adjustments need to happen—instead of wondering where the money went.

You can use this method with:

The system works no matter how tech-savvy you are.

This jar covers the essentials—the bills that keep life running:

This is the foundation of your financial life.

Many guidelines suggest spending 50–60% of income on needs, but here’s the important part for adults over 55: If your percentage is higher, that doesn’t mean you’re doing it wrong.

It means you now have clarity. Awareness comes before improvement.

This jar protects you from surprises and stress. It’s where stability lives.

It may include:

Think of this jar as buying yourself options.

Many O55 readers aim for 20–30%, but even small, consistent amounts here matter. According to the Federal Reserve, many older adults struggle with unexpected expenses simply because funds weren’t clearly set aside in advance.

This jar turns “hope” into preparation.

Yes—you are allowed to enjoy your money.

This jar covers:

This jar exists for one important reason: Enjoyment without a plan often turns into guilt. Enjoyment with a plan becomes sustainable.

When you know there’s a set amount for fun, you’re less likely to overspend—and less likely to feel bad when you spend.

Many people find 10–20% works well, but the exact number matters less than having the jar at all.

As income becomes more fixed, financial surprises hurt more. This method helps because it:

Behavioral finance research consistently shows that simple, visual systems improve follow-through—especially when income is limited or predictable.

The 3-Jar Method turns vague worry into concrete control.

Include:

Use net (after-tax) amounts for clarity.

Place each bill into the jar it mostly belongs to. Don’t overthink it—this is about usefulness, not perfection.

Create three accounts or sub-accounts and name them clearly:

Clear labels reduce mistakes and stress.

When money comes in, split it immediately. Automation removes emotion from decisions and helps habits stick.

If the Needs jar keeps running dry, that’s your signal to:

The jars tell you what to fix—no guessing required.

What if my Needs jar is already too big?

That’s very common. Start by reviewing insurance, utilities, phone plans, and subscriptions. Small changes add up.

Can I use this with retirement accounts?

Yes. Think of withdrawals as income flowing into the jars, not separate from them.

What about big, irregular expenses?

Plan for them in the Future jar ahead of time so they don’t derail everything else.

🚫 Mixing jars after the fact

🚫 Forgetting irregular bills

🚫 Being too strict with enjoyment

🚫 Never reviewing

🚫 Letting the Future jar slide

The goal is balance, not punishment.

With care,

Mike Bridges

Founder, The O55 Report