What is bucketing your money?

Bucketing is a smart way to manage your money without complicated budgets or spreadsheets. The idea is to set up multiple bank accounts called ‘buckets’ and use each one for a specific purpose, like bills, savings or entertainment. Once your buckets are set up, it’s easier to see and control how you spend and save your money.

The benefits of bucketing

If you’re not good with money and struggle to save, then bucketing could work for you. Many use it to reduce debts, control spending and achieve bigger goals, like buying a home or saving for retirement. Bucketing can also help you save your money for larger but infrequent bills like car registration, school fees and energy bills.

Getting started with bucketing your money

Step 1. Work out where you spend your money

It’s important to work out exactly how you spend your money. Head to our budget planner calculator to make it easier to see where your income goes. Once you’ve done this you’ll feel more in control of your money and have a clear view of areas you can save.

Step 2. Group your spending into categories

Group each category of your spending into a few themes such as regular and daily expenses, spending money and savings, then add up the total amounts in each theme. These themes will become your buckets or accounts. You can have as many buckets as you like but here’s an example of how to group them:

Bucket 1 - Regular and daily expenses

This is for regular bills, rent, mortgage, debts, groceries, transport, school fees, insurances and holidays. This account should be linked to a debit card. If you’re planning to use it for travel, a NAB Platinum Visa Debit Card could provide you with additional features and help you get the most out of your money.

Bucket 2 - Spending money

Use this bucket for fun money to splurge on things like socialising or treating yourself and others. This account should be linked to a debit card. You can use our card controls in the NAB app to take control of your spending.

Bucket 3 - Emergencies and safety money

This one is for the big or unexpected expenses that can catch you off guard, like home or car repairs, dental work or paying off debts. This account should earn interest and have no debit card, so you’re not tempted to spend.

Bucket 4 - Savings

Use this to put aside money for things like travel, a new car or reducing debt. Ideally this should be an account that earns interest and has no debit card.

Step 3. Open your bucket bank accounts

You’ll need a basic transaction account to get started. If you’re new to NAB the first thing to do is to apply for a transaction account , download the NAB app and register for NAB Internet Banking .

Once you have opened a transaction account, you can easily open more accounts.

How to open an account with NAB online banking

Opening a new account in the NAB app:

  1. Login to the NAB app.

  2. Tap on the more menu.

  3. Tap on New account.

  4. Select either Transaction account for regular expenses and spending or Savings accounts and follow the prompts to open the new account.

Repeat the above steps for each new account you set up.

Opening a new account in NAB Internet Banking:

  1. Go to Products then from the drop-down menu select Products.

  2. Select either Transaction accounts for regular expenses and spending or Savings accounts and follow the prompts to open the new account.

Repeat the above steps for each new account you set up.

Handy hints for setting up your buckets

Rename your accounts

When you open your accounts, you can name each account to match its purpose. For example, you could name them ‘Spending bucket’, ‘Fun bucket’, ‘Safety bucket’ and ‘Savings bucket’.

Choose a coloured debit card

When you open a NAB transaction account, you can choose a black or pink debit card to make it easier to remember which account or bucket to use.

Step 4. Decide on your bucket amounts

This is a very important part of bucketing. The idea is money from your income ‘pours’ into each bucket in certain amounts that you decide. Ideally, all your income or wages should go into the first account, and from there you transfer money into each of your buckets.

As a guide, consider these percentages of your income for each account or bucket:

  • Account 1 - Regular and daily expenses: 60%
  • Account 2 - Spending money: 10%
  • Account 3 - Emergencies and safety money: 10%
  • Account 4 - Savings: 20%

Step 5. Set up regular money transfers between your buckets

Now that you’ve worked out how much money goes into each of your accounts, you can automate transfers from your first account into the others. It’s a good idea to set up the transfers so they occur on the same day every month, soon after you get paid. This will help you avoid overspending on pay day.  For easy instructions, see how to set up a regular transfer between your NAB accounts.

Now you’re ready to start enjoying the benefits of bucketing.

How to bucket your money and save

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Important information

The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.

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