485: How to Manage Your Money in a Recession

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Manage your money

If you’ve ever dealt with financial challenges and the resulting feelings of fear, stress, and overwhelm, you’re not alone. I’ve been in similar shoes.

During the 2008 “Great Recession” I went from making $60,000 a year to losing over half of my income, going deep into debt, ruining my credit, having my house foreclosed on, and ultimately feeling powerless and without hope.  

Today, I’ll share with you the money-management system that helped me to transform my financial situation and how I doubled my income at the height of that recession.

I’ll introduce you to a unique strategy that allows you to enjoy your money while it grows. By the end of the episode, I hope that you can put an end to a lot of the stress you experience when it comes to money.

We’re talking about shifting your mindset from scarcity to abundance and taking meaningful actions, no matter how small.


  • In order to make changes in your life, you have to raise your standards.
  • Your income can only grow to the extent you do.
  • The quality of your thoughts determines the quality of your outcomes.
  • Intentions are worthless if you don’t turn them into unwavering commitments.
  • Two actionable steps to get unstuck and gain clarity on your goals.
  • Tactics for becoming a good steward of your money, regardless of how much you make.


“To achieve the levels of success that I want in every area of my life, I have to dedicate time to my personal development each day so that I can become the person that I need to be who has the ability of creating and sustaining the levels of success that I want in my life.”

“If you don’t start managing your money effectively, there’s a chance it’s not going to grow the way you want it to, and you’ll never get to the place where you have an excess to spend on things that you really want.”



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Hal Elrod: Hello, listeners of the Achieve Your Goals podcast. This is your host, Hal Elrod, and I am excited for today’s episode. It feels really good. I just finished recording it. And this episode is the simplest money management strategy that I’ve ever learned. But let me be clear, it’s not simple, like it’s only for when you’re starting out. No, I learned this strategy six years ago. And I still implement it to this day. In fact, my entire company now applied this strategy to our business, to our company, the Miracle Morning. And now, we implement the strategy as a company.


So, what I’m going to share with you today, though, is how to do it as an individual. And I’m going to break this down into very actionable steps where you’re going to set up six very specific bank accounts with a very specific purpose for each account that I’m going to share with you the benefits of doing that, not only the benefits financially and how you were able to be able to manage your money and grow your income as I did, which I will lay out for you how I did that in the middle of the 2008 recession. I started this money management system in 2007 when I was earning a decent income, not enough where I had excess, but it was enough to pay my bills. I had financial security, but not abundance. I didn’t have extra. I applied the strategy. We’re using a very– you’ll hear the whole– I’m not going to go too far into it.


But anyway, so you’re going to be able to apply this to your financial situation, no matter where you’re at, if you’re broke and in debt, which I became very quickly. When this strategy was implemented in 2007, in 2008, the economy crashed. I lost over half of my income. You probably know that whole story. But I’m going to tell you today how I got out of that, how I was able to double my income in a recession using this money management strategy in combination with the Miracle Morning and how you can do the same. I’m excited because I think this episode turned out really, really good. Oh, man, I set myself up. I better deliver. Hopefully, you enjoy it.


All right, before I dive into the episode, let me take just a minute to thank our two sponsors, actually, probably two minutes, that bring you this show. Number one is Organifi, making the highest quality organic whole food supplements. If you want to boost your energy, if you want to improve your health, your immunity, your mental clarity, if you want to sleep better, go to Organifi.com/Hal for the highest quality organic whole food supplements in powder form that you can put into a glass of water, a cup of juice, your smoothie, whatever you want. That’s Organifi.com, O-R-G-A-N-I-F-I, two I’s, Organifi with two I’s, Organifi.com/Hal, and use the discount code H-A-L, my name at checkout for 20% off your entire order as a listener of the podcast.


Last but not least, our newest sponsor, but they’re not new anymore. We got them for about a year because I use their products every day, CURED Nutrition. Go to CuredNutrition.com/Hal and you will find my favorite product is their Night Caps which they have in two formats, night caps or capsules and nighttime oil is an oil you put under your tongue before bed. Both of which have CBD oil and CBN oil to help you fall asleep and stay asleep longer. They have products though, for the morning. I take Rise every morning. It’s a nootropic for mental clarity and focus, and then products for your gut health, you name it. Head over to CuredNutrition.com/Hal and use the same discount code H-A-L for 20% off your entire order. Between Organifi and CURED Nutrition, it’s kind of my one-two punch for daily supplementation from companies that I trust that use high quality ingredients, organic whole food ingredients to be specific in their supplements. That’s it.


All right, goal achievers, let’s talk about the simplest money management strategy that will help you improve your financial situation as fast as possible. Enjoy.




Hal Elrod: Welcome to the Achieve Your Goals podcast. This is your host, Hal Elrod. And today, we are talking about managing your money but managing it for the purpose of growing it, for the purpose of creating financial security and financial abundance, financial freedom beyond security. I’ll tell you, this is the system that I learned in 2007. So, what are we at? 16 years ago.


And when I learned the system, I was earning about $60,000 a year. I had launched a coaching business a year prior and I had grown it to $60,000 a year and I had dreams of earning far more income. My dream was actually to earn a million dollars a year in income. That was my pie in the sky dream. And eventually, I did achieve that.


But what I’m teaching you today is where I got started. In fact, this all began, I read a book called Secrets of the Millionaire Mind by T. Harv Eker. And that is essentially where I learned the system, if you will. And just now, I was on my exercise bike and I was trying to think, what do I want to talk about today? And then I went, it doesn’t matter what I want to talk about today. What do people need to hear today? And I just got really quiet and I opened myself up. And for whatever reason, this is what came through me is the simplest method for money management.


And I’m looking at these notes. So, I went and found this book off the shelf. I’m like, well, I learned this system from when I read that book, Secrets of the Millionaire Mind by T. Harv Eker. And so, I pulled it off the shelf, and oh my gosh, this thing is so dog-eared and highlighted, and I got pieces of paper falling out where I took notes.


And here, I’m going to start with some of my notes. And then just so you know, we’re going to get into a very tactical money management system today where I’m actually going to invite you to open up six new bank accounts. Yeah, well, I’ll explain what that is all about. So, here are some notes that I wrote.


I wrote down, my current money blueprint is set to $60,000 to $70,000 per year. I must change my internal blueprint to raise my income to $200,000 plus. I must raise my standards and turn my money shoulds into absolute musts. And then I wrote down, thoughts create feelings, feelings create actions, actions produce results. Therefore, I must think, feel, and then act like a wealthy person. And then I wrote down, be willing to let go of being right, doing things my way hasn’t gotten me where I want to be in terms of income. So, consider that for yourself. And then last but not least, I wrote down, I must be committed to doing whatever it takes to create wealth for me and my family for as long as it takes starting today. So, those are some of the notes that I wrote down.


And I love this quote from Secrets of the Millionaire Mind. It’s very in alignment with the foundational quote from Jim Rohn that I talked about in the Miracle Morning, which is Jim Rohn says, “Your level of success will seldom exceed your level of personal development,” which is why I created the Miracle Morning, because when I heard that, I realized, in order to achieve the levels of success that I want in every area of my life, I have to dedicate time to my personal development each day so that I can become the person that I need to be who has the ability of creating and sustaining the levels of success that I want in my life.


So, Jim Rohn says, “Your level of success will seldom exceed your level of personal development.” T. Harv Eker says, “Your income can grow only to the extent that you do.” So, very much, very aligned philosophies. The second is just applied specific to your finances. So, it starts, right? All of this starts, and it’s what I just read you in my notes, thoughts create feelings, feelings create actions, actions produce results. Therefore, I must think, feel, then act like a wealthy person.


Well, all right, it all begins in your mind. And for me, personally, putting things in writing is a much more effective way than trying to remember them. And I don’t think that’s just me, right? That’s all of us. We think something along the lines of 60,000 thoughts a day, give or take. I don’t know who actually was the researcher that counted that. Is that interesting, right? What researcher was able to count 60,000? They were like, okay, they had a bunch of tests, so I’m just imagining, right? They have a bunch of test subjects. They’re like, okay, every time you have a thought, I want you to raise your pinky finger and then I’m going to tally it, right? And then the person raises their finger 60,000 times. One day, it’s 58,000. The next day, it’s 62,000. And the researcher’s like, well, we’re averaging about 60,000 thoughts a day. I have no idea how they got that number. But it’s very popular, there’s a lot of studies. You see it quoted.


Here’s the thing. Regardless of the number of thoughts, I don’t care if it’s 6,000 or 60,000, we all know that we think a lot of thoughts throughout the day. And most of them are the same thoughts we thought the day before. We become programmed. They become ingrained in our subconscious. They manifest in our conscious mind. We often either think them or we speak them.


And the problem with that is it’s very difficult to improve yourself, to grow, to evolve to the next level when you’re thinking the same thoughts. Because as T. Harv Eker said, “The thought is where it all begins.” Your thoughts, if you think thoughts about how you suck and how you’re broke and how you’re poor and you can never get ahead and you tell yourself things like it’s always going to be this way, think about the feelings that those thoughts are going to generate. They’re definitely not going to generate feelings that are going to move you into actions that are going to improve your situation, whether it’s your financial situation or any other. You keep thinking the same thoughts. You’re going to produce the same feelings and take the same actions and you’re going to stay the same.


So, improving your financial situation, it begins by improving your thoughts. And I believe, and I would say we can all agree that doing that in writing is infinitely more effective than counting on your thoughts to change in your subconscious mind, right? It’s like a computer program. You have to get new software inserted into the computer, upgrade the software, insert it. That’s funny, we don’t insert software anymore. It’s over the Internet, right? I showed my age there when I used to insert a floppy disk or a CD-ROM to upgrade the software. Now, it’s all virtual.


But anyway, to improve your software, upgrade your software, it’s doing it in writing. It’s using the effective, proven method of affirmations. Affirmation is simply written statements that articulate what you aspire to, not who you were in the past, but who you’re committed to being now and moving forward. Not what you’ve done in the past or not done in the past, but what you’re committed to doing moving forward. Not the results you got in the past, but optimistically envisioning the results that you really want and that you’re committed to.


You probably know my affirmations, The Miracle Morning affirmations formula. Step one, what are you committed to? Step two, why is it a must for you? In other words, what are the deeply meaningful reasons why you’re committed to step one, whatever that is? And then step three, which specific actions will you take and when? Those three steps, those are my affirmations formula, but those are the three. You can call them whatever you want. Those are the three steps to get really clear on what you are committed to in your life and fuel that commitment with the whys behind it, the reasons behind it, and then clarify the actions you’re going to take and when you’re going to take them.


And it could be as simple, by the way, when you begin a journey, whether it’s improving your finances or starting a business, when you improve your journey, you very often don’t know what to do initially. It starts with a Google search, right? Like, how do I make more money? How do I improve my finances? How do I upgrade my mindset around money? How do I start a business? How do I write a book? How do I create a second stream of income? How do I get a promotion? So, it starts with a Google search. That’s how you clarify. You figure out what you need to do to get there.


And so, very often, when I start, when I set a goal, my commitment as to which actions I’m going to take and when, they’re often actions related to figuring it out, actions related to researching or reading a book on a topic so that I can learn what specific things I need to do to create the specific results. But the initial commitment is I’m going to spend an hour a day working on this thing.


So, what you focus on expands, what you put your attention into expands. So, meaning, if you sit here and you go, “Man, I don’t even know where to start to improve my finances. I’m stuck in a dead-end job that doesn’t pay me what I need to pay,” or I’m in debt, or I’ve got spending issues or whatever, then it starts with going, okay, well, whatever you’re going to put your attention to is going to expand and improve. So, your commitment would be dedicating a specific time period, either an hour a day, 30 minutes a day, four hours on a Saturday morning, every Saturday, whatever works with your schedule.


And by the way, if you do the Miracle Morning, your miracle morning can be the solution for this. It can be the time that you dedicate. And in case you’ve never heard me talk about what I call the Miracle Morning 2.0., the Miracle Morning 1.0 is a general practice to improve yourself to become the best version of yourself so that your life improves. That’s 1.0. That’s like start a morning ritual. And if you do a miracle morning every day, then you’re starting every day in a peak physical, mental, emotional, and spiritual state. Therefore, you’re becoming a better version of yourself, more confident, more capable of creating better results in your life. That is a life-changing commitment that you can make. That’s the Miracle Morning 1.0.


The Miracle Morning 2.0 is simply choosing a specific area of your life and inserting that into your Miracle Morning. In other words, filtering that objective, that area of your life that you want to improve, whether it’s your finances or your marriage or your health or your happiness, or as a parent, your relationship with your kids, whatever, but you choose the outcome that matters, and then you filter it through all six of the SAVERS.


So, you spend time in silence contemplating, just being open to receiving wisdom around that area. What do I need to think? What do I need to do? In fact, that’s what I did for this podcast. This is an example, by the way, of how the Miracle Morning and the SAVERS can impact you at any given time. I’m telling you, it is 12:19 p.m., I’m supposed to be eating lunch right now. I’m on my lunch hour, but I planned on recording the podcast at 9 a.m. and my mind was blank and I didn’t know what I was going to record it on. And then 10 a.m. came and I couldn’t think of anything to record it on. And then 11 a.m. came and I was blank.


So, if you ever are lacking clarity, here’s how you get clarity. Two things, I decided that I was going to go on my exercise bike because I know that when I move my body, by the way, that’s like the first step, if you need mental clarity, go get exercise, go for a walk. So, exercise, fresh air also can be beneficial, right? But go for a walk. If you can’t go for a walk, do jumping jacks wherever you’re standing, okay, wherever you’re at, in your office, in your room, whatever. I went out to my exercise bike. So, that’s number one, is I got my heart rate up, got the blood flowing and oxygen flowing to my brain so that I could think clearer and get more mental clarity.


But the second thing I did is I spent time in silence. And that’s an example of the first S in SAVERS, being silence. When you spend time in silence, that’s when you create space for wisdom to emerge within you, whether that wisdom is from your own subconscious, whether it’s from God, whether it’s from the universe, collective intelligence, wherever you believe wisdom comes from, and I think it comes from all of the above, literally, all of the above. Some wisdom is stored in our subconscious. Some is just in the ether from collective intelligence, right? Some in the power of prayer, accessing higher power, God, wherever you get that wisdom from. But it’s why you get your best ideas in the shower when you’ve got that quiet time or when you’re falling asleep at night.


So, I went out on my exercise bike, and literally, within five minutes, this came to me, I wasn’t forcing it, I just quieted my mind and focused on my breath, literally. I focused on inhaling for four seconds, exhaling for six seconds over and over and over while I rode the bike without trying to think of any ideas. I want you to think about how counterintuitive that is for most of us. We think if we’ve got to come up with an idea, we got to force it. We got to really concentrate and try to think of that idea.


And my experience, I mean, that actually, usually doesn’t work. And I’m banging my head against the wall and I’m not getting the clarity that I need. But as soon as I quiet my mind, an idea emerges. That’s where this idea came from. I’m like, you know what? People, right now, whenever we survey the audience or you guys, the Miracle Morning Community and the listeners of the podcast, the top two answers for the areas people need improvement with, number one is usually mental health and happiness. And it’s almost a tie that it’s finances, my financial situation, I’m struggling financially. I need help with my financial situation. Those are the top two answers.


So, often, this podcast is about topics related to mental health, happiness, inner freedom, enlightenment, etc. And we don’t talk as often about finances, money management, financial security, financial freedom, increasing your income, etc., etc. It’s interesting because that’s been a huge focus of mine over the last– how old am I? 43. I start– so like 23, 24 years earning income and investing and generating and increasing my income. I’ve had multiple years where I’ve set a goal to double my income and I’ve been able to do it, right? In fact, you know the Miracle Morning story, I doubled my income in a two-month period in 2008 at the height of the recession.


And so, anyway, I don’t know why I shy away from this topic, but actually, I probably do know why. I think there’s like this unconscious judgment of money is the root of all evil, and people that care about money are greedy. And so, I think that’s actually probably, I’m literally like having a self-therapy session right now, trying to identify why don’t I talk about this topic more? But I should, in fact, I have a lot of friends that are really wealthy that I should be bringing on the podcast, like Justin Donald, which I did have Justin Donald on, by the way, not a bad idea to go search up his episode. He’s the author of The Lifestyle Investor, but he’s one of most financially successful people I know.


In fact, let me know in the comments of this episode, this is Episode 485. Let me know if you want me to do more of this, please. Take a moment, pause the podcast, go to MiracleMorning.com/485 and leave a comment below this episode if you want me to do more episodes on money. So, with the recession that we are– I think, we’re already in it, right? I don’t know exactly. The US government, by the way, if you’re not aware of this, they changed the way that you measure a recession so that we’re not in a recession according to their new definition. I believe according to their old definition that we are in one. But the government just changed the definition so that we’re not in a recession, right? Oh, politics are fun. It’s a political theater, man. Anyway, I won’t go down that rabbit hole right now.


But let’s talk about money management and I’m going to get into this, what we’re calling the simplest method for money management. Now, I want to be clear on this before I give you the steps. When I read the book Secrets of the Millionaire Mind, now, I told you I was earning $60,000 a year. And for some of you listening, that might be more than you’re earning. For some of you, it’s less than you’re earning. For some, it’s around in the ballpark. I was spending as much as I was making.


I’d say I was financially secure, but barely. I was like most people, I think it’s human nature or maybe it’s human nature in America, I don’t know. Maybe it’s societal nature. But I was spending as much as I was making and sometimes more, right? I was optimistic. You got to spend money to make money. And I had bought into that, which there’s truth to it. There’s also not truth to it depending on your situation.


But anyway, the point is, when I read this book and when I shared these strategies that I’m about to share with you. Essentially, by the way, short of it is I’m going to encourage you, invite you to open up six bank accounts at your bank. They can be savings accounts or they can be checking accounts. I think savings accounts, I think you avoid fees depending on your bank. So, you may want to go with savings accounts. It’s fine. So, I did, in fact, do savings accounts.


But when I did this, and you’re essentially going to put a percentage of your income in each of these six accounts, and it’s kind of like, I call it reverse budgeting. Instead of like having to budget every dollar, you simply are going to organize when you get money. So, let’s say you get $1,000, you’re going to put a percentage of the thousand dollars into each of the six accounts. And each of the six accounts has a very specific purpose. And that’s essentially how you’re budgeting your money. When you need money to go on vacation, you’re going to check what I call your play account. And your play account, if it has enough money for the vacation, then you can go. But if it doesn’t, then you need to get enough money in that account to go on vacation.


So, I don’t know about you, but the way my brain works, and I believe it’s true for most people, right? It’s a reverse budgeting strategy where it can’t be any simpler. We’re used to checking our bank account balances every day. More often than not, I’d imagine you check your bank account balance. In fact, I’m reading a book right now called Profit First by Mike Michalowicz. And I think that’s actually what partly prompted this episode too is that is in my subconscious. Mike teaches essentially this exact same strategy. His book is called Profit First.


If you are a business owner, an entrepreneur, I highly recommend that book. If you’re an individual, which we’re all individuals, but I do recommend the book Secrets of the Millionaire Mind by T. Harv Eker, even though it’s an older book and I read it in 2007. I’m flipping through it here. I’m like, oh, it’s timeless wisdom. It’s not dated. But if you are a business owner or an entrepreneur, read the book Profit First by Mike Michalowicz.


And Mike has you do the exact same thing. He has you set up five or six bank– in fact, it’s funny, I just did this yesterday. I went into my bank yesterday for 90 minutes and I set up six new business bank accounts that are for different purposes than the accounts that we’re talking about today. So, these accounts today are, I mean, for all of us. If you’re an individual or a business owner, these apply to you. And the profit-first accounts only apply if you have a business. So, we’re going to focus on this universal money management strategy that is applicable for all of us.


So, back to the high part of the strategy, the high-level overview. So, you can have these accounts, you’re used to checking your bank account balance. So, it’s reverse budgeting and that simply, when you log into your bank, you’ll have these six accounts and you go, “How much do I have to give to charity? How much do I have to spend on my bills? How much do I have for financial freedom? How much do I have for play? How much do I have for my personal development?”


You have all these accounts set up and it makes budgeting extremely simple and it creates accountability for your spending because what do most of us do if we want something, if we really want something? If you really want something, what do you usually do? Now, if you’re a Dave Ramsey student and you are a rare breed, then you’re like, “I wait, I budget for it, I save for it.”


But most people put it on a credit card. Like, if you really want it and you go through the mental gymnastics, which we’ve all been guilty that you’re like, you talk yourself into it. Well, okay, I can get this now and then I’ll be able to spend it later because I’ve got that bonus coming and I might get a raise. And I’m hoping, like we literally live in this state of optimism that if everything goes perfectly, then I can pay this off. But you end up going in debt, putting it on credit cards or paying interest.


So, the beauty of this system, this reverse budgeting system, if you will, and by the way, Mike Michalowicz, he calls it a bank account budgeting, I think. And he said it works with human nature because you’re already checking your bank accounts every day. So, this just simply tells you how much you have in each account that you can afford to spend. And if you don’t have the money, you don’t spend it. It’s real simple, right? It creates clarity around your finances.


And then there’s some other benefits that we’re going to get into in terms of how it can help you actually increase your income, because remember, what you focus on expands. And if you’re focused on lack, of not having enough money, if you’re focused on your debt, if you’re focused on your fear around finances, then whatever you focus on expands, it’s amplified. What this money management system allows you to do is focus on what you have and growing what you have in terms of your finances.


All right. So, I’m going to run you through the accounts right now, and then we’ll kind of dive in and explain a little bit about each one. And if you want, I mean, I’m not taking credit here. This came from T. Harv Eker, Secrets of the Millionaire Mind. I think I used to call these my millionaire mind checking account. I think that’s what I labeled, or high level, that’s what I call them.


So, number one, you’re going to open a financial freedom bank account. A financial freedom bank account. Now, what’s the purpose of that? That’s money that is never to be spent, literally never to be spent but only invested to produce passive income for your retirement. So, that’s where you would save money and then you would never spend it, like never buy some usable good like a car or go on a trip or clothing or whatever. You never spend the money. You only invest the money to set yourself up for exactly what the account is called, financial freedom.


And I’m going to give you a percentage that goes in each of these accounts, and then I’m going to talk to you about adjusting those percentages in the beginning until you get comfortable with the system. But the target percentage of where you eventually want to get to, and by the way, this is according to T. Harv Eker. So, after I share all of the accounts and the percentages, again, I’m going to give you my take on these.


So, 10% of your income goes into your financial freedom account. So, if you get $1,000, you put $100 into your financial freedom account. If you get $100, you put $10 in. If you get a dollar, you put 10 cents in. Part of the system is the discipline to consistently stick to the system. And by the way, this became fun for me. When I started implementing the system, finances were not fun for me. They were a source of stress, like they are possibly for you and for most people.


When I started implementing the system, it became like a game. Every time I got money, it was fun for me to go play the little game of moving the money into these six accounts and watching them grow. Now, in the beginning, it was very, very, very slow because I couldn’t afford 10%. I was putting 1%. And then we’ll get to why that is and how to apply it to all of the accounts.


But let’s move on to the next account. So, the first account, financial freedom. And you’re literally going to name it, right? Like you can nickname your accounts online, nickname it Financial Freedom. And ideally, you’re going to move toward putting 10% into that account. Your second account that you’re going to set up using online banking is a play account. A play account. Now, your play account, that is for things that you do not need that bring you joy.


Now, why is that important? Many of us, we usually fall on one of two sides. There’s usually one of two sides of the coin in how you use your play money, if you will, like right now, before you have this money management system. Many of us don’t allow ourselves to enjoy the money that we make. We don’t play with it because we feel like we can’t afford to. Gosh, I really want that, but I can’t afford it. I’m struggling financially. I really want that other thing, but I can’t afford it. And I want you to think about that. Think about how crazy it is, if you will, that we work so hard. Many of us work, like a large majority of our life is spent at work and we don’t enjoy the money that we earn. It’s a source of stress for us.


So, the point of setting up a play account, and by the way, let me actually tell you what I titled it, I remember now. I titled it Guilt-Free Play. I’d like you to write that down. If you didn’t, I mean, obviously, you didn’t because I’m just telling you. But don’t just write down “Play.” Please, trust me on this. Write down, “Guilt-Free Play.” And ultimately, if you want to, you can use just the initials, like you could do FFA, Financial Freedom Account, GFP, Guilt-Free Play account, like you can do whatever you want in terms of how you label these. But again, Guilt-Free Play account, and I wrote that because I wanted to remind myself I deserve to enjoy a portion of the money that I work so hard for. And the percentage that you want to work towards is also 10%.


Now, when I started this, it was 1%. So, if I earned $1,000, I put $10 into that account. If I earned $100, I put a dollar into that account. The point is to develop the habit of money management. Write that down somewhere. The purpose of utilizing the system, and really, there’s multiple benefits. You can say there’s more than one purpose, but one of the primary purposes is to develop the habit of money management. And you could say effective money management or prudent money management or even enjoyable money management. I’m telling you, it’s fun.


So, starting with 1%, while it might feel like, I made $1,000 this week, what’s the point of putting 10 bucks into an account? That’s nothing. Well, I’m going to tell you from experience, once you start managing your money and you start growing your savings, you start growing these accounts, something magic happens. I can’t describe it.


  1. Harv Eker told me in the book. In Secrets of the Millionaire Mind, he said this would happen. And I’m like, I got nothing to lose. I’ll trust you. He said that as you start managing your money, because what you focus on expands, you focus on growing your savings, you focus on being a good steward of the money that you receive. He said, “It will expand.” And I was like, “Yeah, it sounds kind of woo-woo, but I’ll give that a shot.” And what do you know? It worked. And my income increased and I was able to go from putting 1% to 5% to 10% and then even more beyond that.


So, the second account, again, is your Guilt-Free Play account, and that is where you’re going to put money to buy things that you don’t need to buy, that simply bring you joy. And literally, it’s whatever you want. I mean, not like drugs, don’t spend your money on drugs and alcohol, probably. I mean, I’m projecting you do whatever you want with your money. But point being, the Guilt-Free Play account is like whatever you want to do with your money.


Like, I really enjoy buying video games, right? Personally, I don’t play video games, but I have friends that do, they’re 40 and they still love video games, like no judgment. Maybe that’s where they want to spend their guilt-free play money on. Like, what would I actually– let me think. What do I spend it on? Why do I spend money on the things that I don’t need?


Looking around my office, probably books. It’s funny. I mean, I need books, but I buy more books than I can read, a full confession. It takes a while to read a book, but I could buy five books in a week. No problem. And I do that sometimes. I see a book. I’m like, I definitely want to read that at some point. I’ll just get it now. And I have a bookshelf. I have, I don’t even know, hundreds and hundreds and hundreds of books. And I’ve probably read, like start to finish, less than half of them, maybe like 30%. I don’t know. But anyway, so I don’t know if that counts for my play account. But you get the point, it’s buying things that you don’t have to feel any guilt around. I want this, I’m going to buy it. A percentage of your income should be– you should be able to enjoy the money that you work so hard for.


All right. Next account, long-term savings, your long-term savings account. Now, what is that for? In fact, let me give you a little more clarity. Long-term savings for spending. Maybe that gives you a little more clarity. So, it’s your long-term savings for spending account. And again, if you abbreviate, it could be LTSFS, long-term savings for spending. What does that mean?


Well, let’s say you want to buy something that you don’t have enough money for right now. Maybe it’s a new laptop that costs $1,000, $1,500. And you look in your long-term spending, you don’t have that. Well, what do most of us do? We go, man, I really want a laptop, so I’m going to put it on a credit card, right? It’s that same behavior of buying things you don’t actually have the money for yet. And this money management system helps you be a better steward of your finances so that you don’t keep doing that and end up in debt.


So, long-term savings for spending is like, okay, I want a computer and it’s 1,500 bucks. So, once my long-term savings for spending account gets to $1,500, then I can go down to the mall or I can go to the Apple store or whatever, then I can buy that computer. So, this money management system, again, there’s so many benefits. The play account, Guilt-Free Play allows you to actually enjoy a portion of your money. The long-term savings for spending account allows you to be disciplined and not buy things that you don’t need and be patient and save until you actually have the money so that you can afford that thing. Now, it could also be the down payment on a house, right? It could be a big, like this really big thing. I need to save $80,000. So, that would go into your long-term savings for spending account.


Now, let me give you a quick bonus tip here, which is that these six foundational accounts that you’re setting up, they can have sub-accounts. For example, your play account might have a vacation account underneath it. And let’s say 10% goes into your play account, maybe 5% goes into your vacation account, and then 5% goes into your Guilt-Free Play account. And that’s important, Guilt-Free Play, which is where you’re allowed to spend that money. That’s what it’s for. And starting with 1% is fine. And then moving your way up to 10% eventually is fine.


And again, you make this work for you. You might decide that, “Hal, I don’t want to ever dedicate 10% of my income to play. I want to max it out at 5%.” Great. Or you might go, “Hal, I actually really like play. I want to allocate 20% of my income to play.” Okay, right, it’s your life. It’s your income. But 10% is we’re going off of the system, that is the target. But again, you can have a sub-account which is vacation or anything specific that’s under the realm of something that you don’t need, but it brings you joy. Now, I’d argue that we do need a vacation, like at least once a year. You got to recharge and get rejuvenated.


An example under your long-term savings for spending account, I can just use the two examples I gave. One might be home down payment and one might be new computer. And maybe you put, if you get to 10% of your income going into that account, maybe 9% goes into your home down payment and only 1% goes into your computer account. You follow? You can have sub-accounts within each of these foundational accounts.


The next account is your personal and professional development. Personal and professional development. So, for example, buying books, actually, so yeah, I take that back. Books don’t go in my play account. What am I thinking? Books are out of my personal development account. I totally space that. So, your personal development account when I go to, like I invest every year, so 10% of my income goes into that account and I reinvest it, not only in my personal development, where I go to events, I join masterminds, I read books, I buy courses, I invest, I buy app memberships, I mean, whatever falls under that category of personal development.


The other thing that I started doing now that I have a team is I invest in their personal development. So, Tiffany Hammond became my Chief Operations Officer after being my chief of staff for many years, and she had never been a Chief Operations Officer. So, I invested in her going through multiple trainings. I hired her a coach and I bought her books to ramp up and learn how to be a COO, Chief Operations Officer. So, I take a percentage out of my personal and professional development account, not only for me but for my team. So, I invested in Tiffany’s professional development.


I also will just buy books that I feel like our entire team should read from Amazon or mail them to our team members. Josh, who is my chief growth officer for the Miracle Morning and he’s also our head of app development, I just sent Josh to two live events back to back, one in San Francisco, one in Vegas, literally last week. And I paid for travel. I mean, that all came out of that account.


Now, if I didn’t, and by the way, I believe there’s a return on investment. I mean, my philosophy in life around Jim Rohn’s philosophy is your level of success will seldom exceed your level of personal development. Or in the words of T. Harv Eker, your income can grow only to the extent that you do. So, I believe that, not only for myself, but for my team. And so, I’m willing to invest in my team knowing that if they bring back the strategies that they learn, and it’s amazing, Josh has already come back and go, hey, I figured this out and this out, and I got this idea and I met this person, I got this relationship, and they’re going to help us and on and on and on.


But if we weren’t willing to allocate 10% of our income to personal development, none of those breakthroughs would happen. Tiffany wouldn’t be learning how to be the amazing COO that she’s becoming. It’s incredible to watch her develop these new skills and abilities that she never had before, but it’s because I allocate 10% of my income to reinvest in my personal and professional development and that of my team. And I invite you to do the same. All right.


Your next account is your giving account, or you can call it your donation account, whatever resonates with you. So, this target is also 10%, and again, to each their own. No one, T. Harv Eker nor myself can tell you how to spend your money. You might want to give 0% to other people to causes, to charity, or you might want to give 50% or you might want to give 5% or 1%, whatever.


For me, when I wrote The Miracle Morning, occasionally, I would donate 20 bucks here or maybe 100 bucks to a cause I really believed in. But basically, I told myself, I barely have enough money to pay my bills, so I don’t have extra to donate to charity. And I told myself the same thing that most people seem to tell themselves, which is like, once I have more money, then I’ll give away more money, right? In fact, that narrative is universal across most areas of our life.


Once I have more money, then I’ll fill in the blank, right? You fill in the blank. Then I’ll go on that trip I always wanted to go on. Once I have more money, then I’ll start investing my personal development. Once I have more money, then I’ll start saving. Once I have more money, then I’ll give to charity.


But here’s the problem, if you don’t change your mindset around money and that’s the first step, remember your thoughts lead to your feelings, lead to your actions. And right now, we’re focusing on the actions primarily, which is if you don’t start managing your money effectively, there’s a chance it’s not going to grow the way you want it to, and you’ll never get to the place where you have an excess to spend on things that you really want, spend on play or vacation, give to charity, etc. You have to start managing your money now, even if it means only 1%. We can make it work.


So, if you’re putting 1% in each of these six accounts, that means you’re still retaining 94% of your income. If you can live off $1,000 a month, you can figure out how to live off $940 a month. You see that? I want to make sure that I’m removing any excuse where you’re thinking, oh, I don’t– if you’re struggling financially right now as, well, again, I don’t want to pretend, I was in this horrible place because I was making a decent income, but I didn’t have excess. I was spending as much, if not more, than I was making, right? So, you’ve got to start managing the money you have now in order for, if you get woo-woo, it’s to attract more money into your life, or from a practical mindset, it’s simply by managing your money and focusing on it. What you focus on expands, you amplify it. And so, by saving money, you’ll save more. You’ll be able to earn more. And again, I’m going to tell you how that applied to me here in a few minutes.


All right. So, your giving account is just giving back to those less fortunate. And what I did when I wrote The Miracle Morning, I used that as an opportunity to establish accountability, to donate money to charity. And the way I did that is I wrote in the front of the book The Miracle Morning Mission, which at that time was to donate 10% of every dollar that I earned to charity. And I’ve donated, I think, I don’t know, it’s a few hundred thousand dollars since then in the last 11 years to charity, and it’s been well over 10%. Because my goal was eventually, and I’m not there, in fact, I need new accountability, my goal in my heart, in my soul was I want to eventually donate 50% of my income to charity. I thought I want to keep half of my income for me and I want to give half of my income to people that are less fortunate that may not have the knowledge or resources or opportunities that I have. Maybe they were born into a situation where they didn’t have the same opportunities, right?


If you’re born into poverty, not that you can’t get out of poverty, but anyone that says, just pull yourself up by your bootstraps, like that’s denying reality. Okay. Yes, I believe anything is possible. But if you’re born and you have– for example, if your parents are poor and they tell you, they feed you narratives about being poor and why they’re always going to be poor and why your family is going to be poor and you’re going to be poor, don’t tell me that that person has just as much of an opportunity to become wealthy as someone who’s born into an environment that supports wealth in terms of the mindset and the resources and the connections, right? That’s not an even playing field. It’s not, right?


And so, again, I would never tell someone that was born into a difficult environment that, “Oh, yeah, you’re stuck.” No, I would say, “You’ve got to think differently and you do have to pull yourself up by your bootstraps and you do have to start learning what the wealthy, how they think. If you want to become wealthy or financially secure, you’ve got to start modeling their thinking and their behavior absolutely.” But again, the point being, I don’t want to pretend that every single person on the planet and every person listening to this right now is in the same situation and has the same opportunity because it’s not true.


But if you are struggling financially, and I’ve been to the place, that’s where the Miracle Morning was born, where I wasn’t earning $60,000 a year. In fact, if you follow the timeline, I read this book in 2007. Then very soon after I read this book, in fact, it might have been while I was reading the book, the economy crashed and I lost over half of my income. I went from $60,000 to 20-something-thousand dollars a year, and my expenses were well over $50,000 a year between my mortgage and groceries and my car payment, all of that.


So, I started living on credit cards and I went deeply into debt. I went from being debt free to having $52,000 on my personal credit card in six months because I couldn’t afford my bills. I stopped paying my mortgage. My house was foreclosed on by the bank. I was living in stress every day, not knowing when they were going to kick me out of the house, right?


So, just so you all understand, that’s right after I read this book, my financial situation plummeted and I became depressed and I became scared and all of those things. That’s when I created the Miracle Morning. And the Miracle Morning is what enabled me to turn my financial situation around. But these savings accounts, these six accounts that we’re setting up right now, where I’m inviting you, challenging you, I’m hoping that you’re going to set these up, these made a huge difference because I established this right before the crash happened. And even through the crash, I moved. I just kept 1% up. I go, look, I’m broke, but I can afford 1% of broke to go into each of these accounts.


The last account is your necessities account. And your necessities account is to pay the bills. And the target is 50%. Fifty percent. Now, let’s step back and look at this. What does that mean? So, you’ve got 10% going into your financial freedom account, 10% going into your play account, 10% going into your long-term savings account, 10% going into your personal development account. By the way, I forgot to say guilt-free play. And 10% going into your giving account. That’s the target. You’re probably not going to start there unless right now, you have an excess of monthly cash flow, right? If you’re like, yeah, I got way more money, then I’ll do it. Yeah, you’re a rare bird and great, you can start at 10% in each of these accounts and then 50% into your necessities account.


Let me explain what this does psychologically. When I started this, I’m like, there’s no way I can live off half of my income. I need 100% of my income to pay the bills. Okay, I’ll play along. I’ll go down to 95%, 5% or 1% into each of these five accounts, and then the other 95% is going to go into my necessities account. And what happened was the seed was planted for me to increase my income to where I could get to the point that I could live off half of my income. See? Have you ever thought of that? Has that ever even crossed your mind? Because it sure as heck hadn’t crossed my mind. I never thought of I want to get my income to a place where I don’t even need 50% of it, where 50% of it, I can do whatever I want with. I can put 10% toward my financial freedom. I can put 10% toward my personal development. I can put 10% toward guilt-free play, 10% toward long-term savings to buy things that I eventually want down the road without having to put it on credit, and 10% to give away to those that are less fortunate.


And that became my goal, my target. Now, I eventually reached, I don’t know how many years it was, it was probably five years or something, maybe longer. I don’t remember until I get to that point. And by the way, I’ve also gone, where I’ve gotten to that point and my finances, they’ve gone up and down over the years. I’m an entrepreneur, so there have been years where business was thriving, and then years where I had to cut way back, right?


And right now, I am preparing, being that we’re in a recession, I am preparing, I’m saving more, I’m tightening, I’m lowering expenses, right? I am preparing. I don’t know what the future holds, but I am definitely playing much more conservatively right now with my finances to try to weather any storm that may be coming. And I’ve been doing that for a long time by saving.


There’s another account that I have, by the way, that is not on here. I just remembered this, and I don’t know what T. Harv Eker was thinking by not having you set this up, but let me tell you, I’m glad I remembered, having an emergency account. So, I’ve had an emergency account since, I don’t know, a long time, maybe a decade. And I don’t touch that. I just save in that account. I’ve just added to that account over the last 10-plus years. And it’s a substantial amount of money to weather the storm for my family if something happens. So, we have an emergency account which I never touch unless I have an emergency, right?


So, these are the six accounts. Necessities, the target is 50%. The other five accounts are 10% each. And again, you do what you want with your money. You can play with these. You could go, I only want to do 5% to giving or 5% to play or whatever you want. You play with it. The point is to develop a habit of being aware of the money that comes in and managing it intentionally into each of these accounts, which becomes a strategy for budgeting. I call it reverse budgeting because you’re budgeting on the front end, right? And you’re not setting aside X amount of dollars for each thing in your life that you want to spend money on. That would be normal budgeting. Reverse budgeting is you’re allocating money into accounts that become the amount of money that you have to spend on specific areas in your life.


And when you do this, number one, like I said, I didn’t have an excess of money when I started doing this, and then very quickly, in less than a year, I lost over half of my income, but I continued putting 1% into each of the five accounts other than the necessities account, which got the other 95%. And there was a period in my life of six months where that 95%, it wasn’t enough to pay my bills and that’s why I had to live on my credit cards. And I accumulated $52,000 in credit card debt until I started the Miracle Morning, which enabled me to double my income in those two months following.


However, and by the way, how did I do that? It’s what I talked about earlier. The Miracle Morning 2.0. I focused my SAVERS on increasing my income. I was a coach. That’s how I made my money through one-on-one business and life coaching. I bought a book at the beginning of the Miracle Morning when I first started it, called Book Yourself Solid by Michael Port. It was for service-based businesses, like you could be a housecleaner, you could be a coach, you could be a financial advisor, any service-based business where you didn’t sell a product, but you sold a service. And Michael Port’s book, Book Yourself Solid, taught you how to get more clients.


And I implemented what I learned in his book. I used my meditation to get into a state of silence, to gain insights, and also meditate in a state of confidence that I could actually implement these strategies. I wrote affirmations in alignment with what I was committed to in terms of doubling my income, in terms of why that was a must for me, and in terms of which specific actions I was going to take and when. And in the beginning was I’m just going to read his book and implement what he teaches me. And it worked.


Two months later, I had more than doubled my income by signing on. I doubled my client load from 6 clients to 14 clients. I’m getting very granular right now. I think it’s important for you to understand, that’s exactly how I doubled my income at the height of the recession. I focused my Miracle Morning, each of the SAVERS on doubling my income. I read a book, that was the reading, on how to do it, how to increase my income. I implemented it. And what do you know? It worked. Even though the economy got worse, I got better, and therefore, my results got better, my income got better, etc. And the same can be true for you.


I implore you, please set up these six bank accounts. If you weren’t taking notes, either go back and relisten to this episode while you’re taking notes and then immediately set up the bank accounts. Or if you’d like, go online and buy T. Harv Eker’s book, Secrets of the Millionaire Mind, and get started. And if you are a business owner, the next phase of this is applying this same strategy to your business, and the book that teaches you how to do that is Profit First by Mike Michalowicz.


And last but not least, please just take a minute right now to leave me a comment and let me know if you want me to start bringing people onto the podcast to talk specifically about how to earn money during a recession, how to increase your income during a recession, how to become wealthy, on and on. I have a lot of people in my network, Robert Kiyosaki, the author of the bestselling financial book of all time, Rich Dad Poor Dad, who it’s sold 26 million copies. Robert is a friend of mine. I could easily bring him on the podcast. Justin Donald, the author of The Lifestyle Investor, I could bring Justin on the podcast. I could probably reach out to T. Harv Eker, Secrets of The Millionaire Mind. I could bring T. Harv on the podcast.


So, if you’re interested in that, I could do a whole series or just start bringing people on once a month or a couple of times a month. Please take a minute to leave me a comment at MiracleMorning.com/485. That will take you to this podcast and you can leave me a comment to let me know if you’d like me to bring people on the podcast specific to improving your financial situation.


All right, goal achievers and members of the Miracle Morning Community, I love you. I hope this has been valuable and helpful for you. More importantly, it’s only going to be really valuable if you actually do what we talked about. Open those six bank accounts, implement this strategy, start managing your money. Every time you get income, you get a paycheck, you get birthday money, put the percentages that you can afford, whether it’s 10% in each of those accounts or 1% in each of those accounts.


Or you could just choose an amount, 10 bucks, but I like percentages because, again, yeah, so let me take that back, don’t choose $10, choose a percentage because you want to train your brain and your habits to put a percentage of your income into these accounts. And then as your income grows, then you can increase the percentage from 1% to 2% to 3% to 5% to 10% and whatever you can afford.


All right. I love you. I’ll talk to you next week, everybody. Let me set an intention. I intend, whatever that means, for me, it’s an intention. For you, it needs to be a commitment. So, I can say I’m committed, but I can’t commit for you, right? I intend for you to commit to follow through with today’s episode and commit to set yourself up for financial security leading to financial freedom. That is my intention for you. But it only matters, it’s only effective if you turn that intention into an unwavering commitment in your life to implement this strategy every single day or moving forward.


All right. Love you. Goal achievers and members of the Miracle Morning Community, I will talk to you next week. And here’s to a future for you, for me, and for our families and our friends and society of financial freedom and abundance.


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