MONDAY, DECEMBER 26, 2011 Organization Tip: Bucket Budgets Trying to organize finances can be frustrating and stressful. Budgets are about as much fun as dental work, but how can we track our spending without them? My solution is a percentage budget, or what I call my Bucket Budget. It has been such a huge stress relief for me that I thought I'd share it. The details of percentage budgets vary, but the general idea is the same. Your income (based on gross or net) is divided into three or four categories or "buckets" of money: taxes (if basing on gross income) savings living expenses fun money As long as money is going in and out of the appropriate buckets, you don't need to track every dollar. And if you set it up so your buckets don't mix, it's like putting your finances on autopilot. To get started, determine how much money you need for your living expenses, which include all of the basic costs of living -- mortgage or rent payment, transportation, utilities, food, etc. -- that you have to pay every month. Base this amount on recent spending history. BE REALISTIC. Add a little for contingencies if you want. Whew! That concludes the complex calculations portion of this process. You can use round percentages for the other categories. Let's say your net income (take-home pay) is $3000 per month. You've determined your living expenses are $2100, or 70% of your monthly pay. That leaves 30%. Most financial experts I've read suggest putting 20% into savings, so we'll go with that. That leaves you with 10% ($300) for you to spend on whatever you want. In summary, your breakdown is savings 20% living expenses 70% fun money 10% Now to put those finances on autopilot. Set up two or three bank accounts: savings checking for living expenses checking for fun money (you can skip this if you prefer to use cash for your fun money) When you receive your paycheck, divide the money into the appropriate buckets. You can use direct deposit from your employer or set up recurring transfers to make this completely automatic. deposit 20% ($600) into your savings account deposit 70% ($2,100) into your living expenses account deposit 10% ($300) into your fun money account (or take it as cash if you prefer) Because your setup is automatically covering savings and living expenses, you can spend your bucket of fun money -- every cent if you want to -- without worrying about how it's going to impact your financial situation. :D Your budgeted percentages may vary depending on your personal financial situation and goals. If you live outside the U.S., you might need to change the categories. But I think the general principle can be useful in most cases. Posted by J.Bane

ᵀⁱᵐᵉ ᵗᵒ ᵗᵘʳⁿ ᵗʰᵉ ᵗᵃᵇˡᵉˢ ⁽ᔆᵖᵒⁿᵍᵉᴮᵒᵇ ᶠᵃⁿᶠⁱᶜ⁾ "ᵂʰᵃᵗ'ᵈ ᴵ ᵗʳᵃᵈᵉ ᶠᵒʳ ᵗᵒ ᵍᵉᵗ ᵗʰᵉ ⁱⁿᵍʳᵉᵈⁱᵉⁿᵗˢ ᵛⁱ́ᵃ ᵇˡᵃᶜᵏᵐᵃⁱˡ?" "ᵂᵉˡˡ ᵐʸ ˢᵒᵘʳᶜᵉˢ ⁱⁿᵈⁱᶜᵃᵗᵉ ʰᵉ ᵍᵒᵗ ᵖʳⁱᶻᵉᵈ ʰⁱˢ ᶠⁱʳˢᵗ ᵈᵒˡˡᵃʳ ᵉᵛᵉʳ ᵉᵃʳⁿᵉᵈ ˢᵒ ʸᵒᵘ ᶜᵃⁿ ᵍᵒ ᵗᵃᵏᵉ ⁱᵗ ᵃˢ ᴵ'ᵐ ˡᵃᵗᵉ ᶠᵒʳ ᵐʸ ˢˡᵘᵐᵇᵉʳ ᵖᵃʳᵗʸ ᵃᵗ ᔆᵃⁿᵈʸ'ˢ‧" ᴷᵃʳᵉⁿ ᵗʰᵉ ᶜᵒᵐᵖᵘᵗᵉʳ ʷⁱᶠᵉ ᵗᵒˡᵈ ʰᵉʳ ʰᵘˢᵇᵃⁿᵈ ᴾˡᵃⁿᵏᵗᵒⁿ‧ 'ᴴⁱˢ ᵈᵃᵘᵍʰᵗᵉʳ ᵐⁱᵍʰᵗ ᵇᵉ ᵃᵗ ˢᶜʰᵒᵒˡ ʷʰⁱˡˢᵗ ʰⁱˢ ᵒʷⁿ ʷᵒʳᵏ ʰᵒᵘʳˢ ˢᵒ ᴵ ᶜᵃⁿ ˢⁿᵉᵃᵏ ⁱⁿ ʰⁱˢ ʰᵒᵘˢᵉ ʷʰⁱˡˢᵗ ᴵ ᶜᵃⁿ!' ᴾˡᵃⁿᵏᵗᵒⁿ ᵗʰᵒᵘᵍʰᵗ‧ ᴴᵉ ᵇʳᵒᵘᵍʰᵗ ᵇᵃᶜᵏ ᵗʰᵉ ᵈᵒˡˡᵃʳ ʷʰⁱᶜʰ'ˢ ᵉⁿᶜˡᵒˢᵉᵈ ⁱⁿ ᵃ ᶜˡᵉᵃʳ ᶜᵃˢᵉ! ᴾˡᵃⁿᵏᵗᵒⁿ ᵈⁱᵈⁿ'ᵗ ʳᵉᵃˡⁱˢᵉ ᴹʳ‧ ᴷʳᵃᵇˢ ᵍᵒᵗ ˢᵒᵐᵉ ˢᵉᶜᵘʳⁱᵗʸ ᶜᵃᵐᵉʳᵃˢ ʲᵘˢᵗ ⁱⁿ ᶜᵃˢᵉ ˢᵘᶜʰ ᵃ ᵗʰⁱⁿᵍ ʰᵃᵖᵖᵉⁿᵉᵈ‧ 'ᵀᵃᵏⁱⁿᵍ ᵐᵉ ᶠⁱʳˢᵗ ᵈᵒˡˡᵃʳ ᵃˢ ʳᵃⁿˢᵒᵐ⸴ ʷᵃʸ ᵗᵒ ᶠᵃʳ‧‧‧' ᴹʳ‧ ᴷʳᵃᵇˢ ᵗʰᵒᵘᵍʰᵗ ᵃˢ ʰᵉ ˢᵃʷ ᵗʰᵉ ᶠᵒᵒᵗᵃᵍᵉ‧ "ᔆᵖᵒⁿᵍᵉᵇᵒᵇ ᶜᵒᵐᵉ‧‧‧" "ʸᵉˢ⸴ ᴹʳ‧ ᴷʳᵃᵇˢ‽" ᴹʳ‧ ᴷʳᵃᵇˢ ᵗᵒˡᵈ ʰⁱᵐ ᵗʰᵉ ᵖˡᵃⁿ ᵗᵒ ᵗᵃᵏᵉ ⁱᵗ ᵇᵃᶜᵏ ᵃᶠᵗᵉʳ ʷᵒʳᵏ ʰᵒᵘʳˢ ᵈᵃʸ ᵉⁿᵈᵉᵈ‧ "ᴵ ˡᵒᵛᵉ ᵗʰᵉ ᵈᵒˡˡᵃʳ ˡᵃᵈ! ᔆᵒ ʸᵒᵘ ᶜᵃⁿ ᶜᵒᵐᵉ ʰᵉˡᵖ ᵐᵉ ᵍᵉᵗ ⁱᵗ‧‧‧" "ᔆᵃⁿᵈʸ ᵗᵒˡᵈ ᵐᵉ ᴷᵃʳᵉⁿ'ˢ ᵍᵒⁿⁿᵃ ᵇᵉ ᵃᵗ ʰᵉʳ ᵖˡᵃᶜᵉ ˢᵒ ᴾˡᵃⁿᵏᵗᵒⁿ ʷⁱˡˡ ᵇᵉ ᵃᵗ ᵃˡᵒⁿᵉ ⁱⁿ ᵗʰᵉ ᶜʰᵘᵐ ᵇᵘᶜᵏᵉᵗ‧‧‧" 'ᵂʰᵉʳᵉ ⁱˢ ⁱᵗ‽' ᴹʳ‧ ᴷʳᵃᵇˢ ˡᵒᵒᵏᵉᵈ ᵃʳᵒᵘⁿᵈ ⁱⁿ ᵛᵃⁱⁿ‧ "ᵂʰᵃᵗ ᵃᵇᵒᵘᵗ ʰⁱˢ ᵇᵉᵈʳᵒᵒᵐ‧‧‧" ᔆᵖᵒⁿᵍᵉᵇᵒᵇ ᵃˢᵏᵉᵈ‧ "ᴵ ᵇᵉᵗ ʰᵉ'ᵈ ᵖᵘᵗ ⁱᵗ ᶜˡᵒˢᵉ ᵗᵒ ʰⁱᵐ ˢᵉˡᶠ ˢᵒ‧‧‧" ᴹʳ‧ ᴷʳᵃᵇˢ ʷᵉⁿᵗ ᵗⁱᵖ ᵗᵒᵉ ᵘᵖ ᵗᵒ ᵗʰᵉ ᵇᵉᵈʳᵒᵒᵐ ᵈᵒᵒʳ‧ "ʸᵒᵘ ᵍᵉᵗ ⁱᵗ⸴ ᵐᵉ ᵇᵒʸ‧ ᴴᵉ'ᵈ ᵇᵉ ᵉˣᵖᵉᶜᵗⁱⁿᵍ ᵐᵉ ᵃⁿᵈ ʸᵒᵘ'ʳᵉ ⁿᵒᵗ ᵗᵃᵏᵉ ᵘᵖ ᵃˢ ᵐᵘᶜʰ ˢᵖᵃᶜᵉ‧‧‧" ᴹʳ‧ ᴷʳᵃᵇˢ ᵖᵉᵉᵏᵉᵈ ᵗʰʳᵒᵘᵍʰ ᵗʰᵉ ᵈᵒᵒʳ ᵗᵒ ˢᵉᵉ ʰⁱᵐ ʷⁱᵗʰ ⁱᵗ‧ "ᴹʳ‧ ᴷʳᵃᵇˢ⸴ ʰᵉ'ˢ ʰᵒˡᵈⁱⁿᵍ ᵗʰᵉ‧‧‧" "ᴵ ᵏⁿᵒʷ!" "ᴮᵘᵗ ʰᵒʷ ᵈᵒ ᴵ ᵗᵃᵏᵉ ⁱᵗ ᵇᵃᶜᵏ ʷⁱᵗʰᵒᵘᵗ ʰⁱᵐ ⁿᵒᵗⁱᶜⁱⁿᵍ? ᴴᵉ'ᵈ ᵖᵘᵗ ᵘᵖ ᵃ ᶠⁱᵍʰᵗ‧‧‧" "ᴵ ᵍᵒᵗ ᵃ ᵈᵉᶜᵒʸ!" ᴹʳ‧ ᴷʳᵃᵇˢ ˢʰᵒʷᵉᵈ ᔆᵖᵒⁿᵍᵉᵇᵒᵇ ᵃ ˢⁱᵐⁱˡᵃʳ ᶜᵃˢᵉ ᵇᵘᵗ ᵉˣᶜᵉᵖᵗ ⁱᵗ ʰᵃᵈ ᵒⁿᵉ ᵒᶠ ʰⁱˢ ʷᵃᶜᵏʸ ᵇᵘᶜᵏˢ ʰᵉ'ᵈ ᵘˢᵉᵈ ᵗᵒ ᵖᵃʸ ʰⁱˢ ʷᵒʳᵏᵉʳˢ ʷⁱᵗʰ‧ "ᴺᵒʷ ᵍᵒ⸴ ᵃⁿᵈ ˢʷⁱᵗᶜʰ ⁱᵗ ᵒᵘᵗ! ᴴᵉ'ᵈ ʳᵉᵃˡⁱˢᵉ ᵗᵒ ˡᵃᵗᵉ ⁱᵗ ˢᵃʸˢ 'ʷᵃᶜᵏʸ ᵇᵘᶜᵏˢ' ᵒⁿ ⁱᵗ ʷʰᵉⁿ ʷᵉ'ʳᵉ ˡᵒⁿᵍ ᵍᵒⁿᵉ ᵃⁿᵈ ˢᵃᶠᵉ‧‧‧" ᴹʳ‧ ᴷʳᵃᵇˢ ᵍᵉⁿᵗˡʸ ᵖᵘˢʰᵉᵈ ˢᵖᵒⁿᵍᵉᵇᵒᵇ ⁱⁿ‧ ᔆˡⁱᵈⁱⁿᵍ ᵘⁿᵈᵉʳ ᵗʰᵉ ᵇᵉᵈ⸴ ˢᵖᵒⁿᵍᵉ ᵇᵒᵇ ᵏⁿᵉʷ ʰᵉ ᵐᵘˢᵗ ᵈᵒ ⁱᵗ ˢʷⁱᶠᵗˡʸ ᵇᵉⁱⁿᵍ ᵗʰᵉ ᵒⁿˡʸ ᶜʰᵃⁿᶜᵉ ʰᵉ'ˡˡ ᵍᵉᵗ‧ ᔆᵖᵒⁿᵍᵉᵇᵒᵇ ᶜʳᵃʷˡᵉᵈ ᵒᵘᵗ ᶠʳᵒᵐ ᵘⁿᵈᵉʳ ᵗʰᵉ ᵇᵉᵈ ʷⁱᵗʰ ᵗʰᵉ ᵈᵉᶜᵒʸ‧ ᴹʳ‧ ᴷʳᵃᵇˢ ᵍʳⁱᵐᵃᶜᵉᵈ ᵃˢ ʰᵉ ˢᵃʷ ˢᵖᵒⁿᵍᵉᵇᵒᵇ ʰᵉˢⁱᵗᵃᵗᵉ ʷʰᵉⁿ ᴾˡᵃⁿᵏᵗᵒⁿ'ˢ ᵍʳⁱᵖ ˢᵗᵃʳᵗˢ ᵗⁱᵍʰᵗᵉⁿⁱⁿᵍ ᵃʳᵒᵘⁿᵈ‧ ᔆᵖᵒⁿᵍᵉ ᵇᵒᵇ ˢʰʳᵘᵍᵍᵉᵈ⸴ ⁱⁿᵗᵉʳⁿᵃˡˡʸ ᵖᵃⁿⁱᶜᵏⁱⁿᵍ‧ ᴹʳ‧ ᴷʳᵃᵇˢ ⁿᵒᵈᵈᵉᵈ ⁱⁿ ᵉⁿᶜᵒᵘʳᵃᵍᵉᵐᵉⁿᵗ ᶠᵒʳ ˢᵖᵒⁿᵍᵉ ᵇᵒᵇ ᵗᵒ ᶜᵒⁿᵗⁱⁿᵘᵉ‧ 'ᴶᵘˢᵗ ᵇᵉᵗᵗᵉʳ ʰᵘʳʳʸ ˢᵒ ʷᵉ ᶜᵃⁿ ᵍᵉᵗ ᵒᵘᵗ ⁿᵒʷ ᴵ ᵈⁱᵈ ⁿᵒᵗ ᶜᵒᵐᵉ ᵗᵒ ʷⁱᵗⁿᵉˢˢ ᵐᵉ ᵉⁿᵉᵐʸ ˢⁿᵒʳᵉ' ᴹʳ‧ ᴷʳᵃᵇˢ ᵗʰᵒᵘᵍʰᵗ‧ ᔆᵖᵒⁿᵍᵉᵇᵒᵇ ˢⁱᵍʰᵉᵈ⸴ ᵗᵃᵏⁱⁿᵍ ᵗʰᵉ ʳᵉᵖˡᵃᶜⁱⁿᵍ ʷⁱᵗʰ ᵗʰᵉ ᶠᵃᵏᵉ ᶜᵃˢᵉ ⁱⁿ ᴾˡᵃⁿᵏᵗᵒⁿ'ˢ ᵉᵐᵇʳᵃᶜᵉ ⁿᵒʷ ᵍᵉᵗᵗⁱⁿᵍ ᵗʰᵉ ʳᵉᵃˡ ᵒⁿᵉ‧ ᴹʳ‧ ᴷʳᵃᵇˢ ʷⁱⁿᶜᵉᵈ ʷʰᵉⁿ ʰᵉ ˢᵃʷ ᵈʳᵒᵒˡ ᵒⁿ ⁱᵗ ᵗʰᵒᵘᵍʰ‧ "ᴱᵘʰ–" "ˢᵖᵒⁿᵍᵉᵇᵒᵇ ᵍᵉᵗ!" ᴹʳ‧ ᴷʳᵃᵇˢ ˢᵃⁱᵈ‧ "ᴵᵗ'ˢ ᵃ ᵍᵒᵒᵈ ᵗʰⁱⁿᵍ ʸᵒᵘ ᵖᵘᵗ ⁱᵗ ⁱⁿ ᵃ ᵖʳᵒᵗᵉᶜᵗⁱᵛᵉ‧‧‧" "ᴵ ʷᵃⁿⁿᵃ ᵍᵉᵗ ᵒᶠᶠ ʰⁱˢ ᵖʳᵒᵖᵉʳᵗʸ ⁿᵒʷ ᵇᵘᵗ ᵍᵒᵒᵈ ʲᵒᵇ! ᴬˡˢᵒ ᴵ ʷᵃⁿⁿᵃ ᵍᵉᵗ ᵃ ⁿᵉʷ ᶜᵃˢᵉ ᶠᵒʳ ⁱᵗ⸴ ᵇᵘᵗ ⁱᵗ ᶜᵒᵐᵉˢ ᵒᵘᵗ ᵒᶠ ʸᵒᵘʳ ᵖᵃʸᶜʰᵉᶜᵏ ˢᵒⁿ‧‧‧" "ʸᵒᵘ ᵍᵒᵗ ⁱᵗ ᴹʳ‧ ᴷʳᵃᵇˢ!" ᔆᵖᵒⁿᵍᵉᵇᵒᵇ ˢᵐⁱˡᵉᵈ‧ ᵀʰᵉ ⁿᵉˣᵗ ᵈᵃʸ ᴾˡᵃⁿᵏᵗᵒⁿ ᵈⁱᵈⁿ'ᵗ ʳᵉᵃˡⁱˢᵉ ᵃᵇᵒᵘᵗ ᵗʰᵉ ᵈᵒˡˡᵃʳ ᵃˢ ʰᵉ ᵗʰᵒᵘᵍʰᵗ ʰᵉ ˢᵗⁱˡˡ ᵍᵒᵗ ˡᵉᵛᵉʳᵃᵍᵉ‧ ᴹʳ‧ ᴷʳᵃᵇˢ ᵃˡˢᵒ ᵖᵘᵗ ᵘᵖ ᵃ ᵇᵉᵗᵗᵉʳ ˢᵉᶜᵘʳⁱᵗʸ ᶠᵒʳ ʰⁱˢ ᵖʳⁱᶻᵉᵈ ᵖᵒˢˢᵉˢˢⁱᵒⁿ‧ "ᴴᵉʸ ᴱᵘᵍᵉⁿᵉ‽" ᴾˡᵃⁿᵏᵗᵒⁿ ʷᵉⁿᵗ ᵗᵒ ᴹʳ‧ ᴷʳᵃᵇˢ ᵒᶠᶠⁱᶜᵉ‧ "ᴵ'ᵛᵉ ᵍᵒᵗ‧‧‧" "ʸᵒᵘ ᵃⁱⁿ'ᵗ ᵍᵉᵗᵗⁱⁿᵍ ⁱⁿᵍʳᵉᵈⁱᵉⁿᵗˢ⸴ ᴾˡᵃⁿᵏᵗᵒⁿ‧‧‧" "ᔆᵘᵖᵖᵒˢᵉ ᴵ ᵇʳⁱᵇᵉ ʸᵒᵘ‧‧‧" ᴾˡᵃⁿᵏᵗᵒⁿ ʰᵉˡᵈ ᵘᵖ ᵗʰᵉ ᶜᵃˢᵉ ⁿᵒᵗ ᵏⁿᵒʷⁱⁿᵍ ⁱᵗ'ˢ ᵃ ᶠᵃᵏᵉ‧ "ᴳⁱᵛᵉ ᵐᵉ ᵗʰᵉ ᵇᵒᵗᵗˡᵉ ᵒʳ ᶜʰᵒᵒˢᵉ ᶠᵒʳ ʸᵒᵘʳ ᵈᵒˡˡᵃʳ⸴ ᵇᵘᵗ ⁿᵒ ᵐᵃᵗᵗᵉʳ ʷʰⁱᶜʰ ᶜʰᵒⁱᶜᵉ ᴵ'ˡˡ ʳᵘˡᵉ!" "ᑫᵘⁱᵗᵉ ᵗʰᵉ ᶜᵒⁿᵗʳᵃʳʸ ᵇᵉᶜᵃᵘˢᵉ ᴵ ʳᵘˡᵉ ᵃⁿᵈ ʸᵒᵘ ᵈʳᵒᵒˡ!" ᴹʳ‧ ᴷʳᵃᵇˢ ˡᵃᵘᵍʰᵉᵈ ᵃᵗ‧ "ᴺᵒʷ ˡᵉᵃᵛᵉ⸴ ᵃⁿᵈ ᵏᵉᵉᵖ ʸᵒᵘʳ ᵂᵃᶜᵏʸ ᴮᵘᶜᵏˢ ᵗᵒ!" ᴾˡᵃⁿᵏᵗᵒⁿ ˡᵒᵒᵏᵉᵈ ᶜᵒⁿᶠᵘˢᵉᵈ ᵇᵘᵗ ᵏⁿᵉʷ ʰᵉ ᶠᵃⁱˡᵉᵈ‧