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Buckets Method

The Buckets method is a variation of what’s called “Envelope Budgeting”—the idea of cashing your paycheck and dividing the money into envelopes. You could do this with physical envelopes or the Buckets app.

Imagine you have a rain barrel catching all your income that you then divvy out to fill up smaller buckets. Each bucket is different and the fill line varies. You want to make a bucket for all of the expenses you have.


In essence, you do this every month:

  1. Get a bucket
  2. Make it rain!
  3. Use it up
  4. Adjust

Here’s each step in more detail.

1. Get a bucket

Write down all the kinds of things you buy. Be detailed or general—it’s up to you. Here’s an example list to get you started:

  1. Charity
  2. Groceries
  3. Eating out
  4. Rent/Mortgage
  5. Health insurance
  6. Health expenses
  7. Clothing
  8. Gas
  9. Car insurance
  10. Car repairs
  11. Car registration
  12. Car payment
  13. Utilities
  14. Fun
  15. Trombone lessons
  16. Tuition

Then write down things you want to save for:

  1. Vacation
  2. Retirement
  3. A new car
  4. A Costco sized jar of cashews

Now make a bucket for each thing on your lists.

A good rule of thumb is: if you know ahead of time how much an expense will be, make a separate bucket for it. For instance, I know that my rent is $1000 per month, so I have a Rent bucket. And I know that $5000 in tuition will be due in September so I make a Tuition bucket.

2. Make it rain!

At the beginning of each month fill up your buckets with what you expect to spend that month from the money you already have.

Regardless of how often you’re paid, many expenses happen on monthly or multiple of monthly cycles, so we budget monthly to prepare for those expenses.

3. Use it up

Throughout the month, as you spend money, take it out of the corresponding bucket.

4. Adjust

At the end of the month, move money between buckets so that none of the buckets have a negative balance.

Start the process over again by making any new buckets you need, kicking buckets you don’t, and filling them back up.


Using Buckets