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Strategy Center

The Easy Way To Save Money!


The Bucket Method. Save Money.


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Set Your Goals

There is ample information out there about how to invest, save money and pay off debt. Maybe you use a savings account, a safe or throw it all into an old shoe box.  But you’re sticking to your budget, putting away a little money each month or paying a little more than the required minimum payment on your credit card each month. Good for you!

The next step is to determine how you want to use that money you have been putting away. One great method, you may not have heard of, is the Bucket Method.

The bucket method helps you set various goals (for each bucket) and once you have reached your first goal, or filled your first bucket, your extra money continues to pour or trickle down to your next bucket (or goal). It’s simple and helps you prioritize what you really want to save money for, how much, how long and how you can allocate more money to pay off your debt.

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Prioritize Your Goals

You can prioritize your buckets in several ways. You can determine a goal based on how much time it will take to reach your goal (ie. Pay off debt in 3 years), the total amount of money you want to save for each goal (ie. $1,000.00 minimum amount to be saved for a vacation), the importance of each category of savings (ie. emergency fund vs. a retirement fund) etc. A good rule of thumb would be to start refilling any “bucket” once the funds have been utilized or depleted and once they are full again, pour new money you receive into the next “bucket”.

In this example we will use three traditional savings goals, saving for college, buying a home and saving for retirement.

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Pay Off Your Debt(s)!

You can also use this method to allocate percentages or amounts of money to be used towards debt payoffs. Your buckets would then be categorized as the lenders (ie. American Express credit card) or debt types (ie. Car loan)  and once you pay off one lender, you use those same monthly funds to pay off the next lender; similar to the “Snowball Method” debt payment method.

bucket method

Try setting just 3 or 4 goals for yourself and see how much you’ve saved or paid off in 6 months. Let us know how well you do or if you’d like our help planning for your future!

Written by Jeff Johnson

Jeff Johnson has been helping individual and small business clients with tax and financial planning for over 15 years. Starting with a degree in finance from the University of North Dakota, Jeff has continually increased his financial education. He currently holds the industry designations of Enrolled Agent (EA) and Certified Financial Planner (CFP®). In addition, he holds a life and health insurance license from the state of California. Jeff is a member of the California Society of Enrolled agents and the Financial Planning Association.

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