I witnessed an interesting situation between a married couple the other day. One spouse has been having various treatments here, getting amazing results and is happy as a clam with how things are going. The other spouse would like to have some treatments but feels that they can’t afford them. The latter was actually radiating hostility while at the spa.

The question is, can they afford to have treatments? Probably.

If I tell you that they are both professionals with good jobs, would you think they can afford the treatments?

So many factors go into answering that question, including what their financial priorities and obligations are, their other expenses, actual incomes and so on but I would like to introduce to you the system that T. Harv Eker recommends for budgeting so we could really know whether this couple can afford these treatments.

Harv recommends that you handle your money this way if you want to be wealthy: take all of your income, take the taxes off the top and divide your net income into 6 categories, Financial Freedom Account (FFA), Necessities (NEC), Long-term Saving for Spending (LTSS), Education (EDU), Play Fund (PLAY) and Charitable Giving (CHAR).

Your FFA is where you save money for creating your financial freedom through investments such as RRSPs, stocks and business ventures that create passive income like vending machines, parking lots and so on.

NEC covers all of your financial obligations such as mortgage payments, debt repayment, food, clothing, transportation, memberships and so on.

LTSS is where you save for any big expenditure like a special vacation, a new TV or car, major renovations and so on. You can subdivide this into several accounts if you are saving for a number of big expenditures.

EDU is the money you spend on yourself for your personal development — books, courses, lectures, seminars, and so on. It is definitely not your kids’ college fund (that would be an LTSS project).

PLAY is money that you spend however you want, completely guilt-free, every month. If you normally feel guilty about eating at a fancy restaurant, buying novels or going to the casino, then you can do these things completely guilt-free as long as you pay for them out of your PLAY account.

Your Charitable Giving account is for supporting the charities that are important to you and giving back to the community. If you don’t have a lot of money, your charitable giving could take the form of action, that is, volunteer work, rather than money.

The usual breakdown of the 6 groups is FFA 10%, NEC 55%, LTSS 10%, EDU 10%, PLAY 10% and CHAR 5% but you may have to play around with these figures depending on your personal situation. Harv discusses this in detail in his book, Secrets of the Millionaire Mind and at the Millionaire Mind Intensive seminar.

Where would cosmetic medical treatments fit into the budget?

Cosmetic medical treatments might be a necessity if you are in the public eye a lot so they would be paid for out of the NEC account. They might be a LTSS project. They might be something you would pay for out of your PLAY account if you felt they were an indulgence that you couldn’t justify any other way.

I think this is a really good system. It can really help a couple who are at odds on their finances come up with a plan that covers all the bases and that both parties can live with.

My friends above could map out how much money goes into each account and feel secure that they could afford to spend a certain amount on medical cosmetic treatments and still be working toward creating wealth for the future.