What is bucketing your money?

Bucketing is a smart way to manage your money without complicated budgets or spreadsheets. You 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. This strategy is beneficial for anyone looking to save, reduce debt, control spending or achieve bigger financial goals. Bucketing can also help you save your money for larger but infrequent bills like car registration, school fees and energy bills.

Get started with bucketing your money

It’s easy to start bucketing and saving when you know the exact steps involved in the process.

Steps to bucket your money

  1. Work out your spending and group into categories
  2. Open your bucket bank accounts
  3. Decide on your bucket amounts
  4. Set up regular deposits to your buckets

Step 1. Work out your spending and group into categories

A good starting point is working out how you spend your money. An online expense tracker like the Spending tool, for instance, is excellent to help you see where your income goes. Next, group each category of your spending into a few themes. This could look like regular and daily expenses, emergency funds, splurge and savings. Then add up the amounts in each theme. These themes become your buckets. 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. 

Bucket 2 – Spending or splurge 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 the savings bucket 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 2. Open your bucket bank accounts

To implement this financial strategy, you’ll need to get started with a basic transaction account with your bank. After you’ve opened one account, it’s easy to open or add extra savings or transaction accounts

Learn how to open a bank account online.

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 3. 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 4. Set up regular deposits to 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.

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

How to bucket your money and save

Explore other life moments

Other accounts and products to consider

Get in touch

Customer Support Tool

Solve problems quickly online with our easy-to-follow guides. Simply select a topic and we’ll direct you to the information you need.

Contact us

Visit our personal banking contact page for FAQ’s and how-to-guides, help from our virtual assistant and contact numbers.

Visit a NAB branch

Visit us in person at your nearest NAB branch or business banking centre.

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.

NAB App - NAB recommends you consider the Internet Banking terms and conditions document before making any decisions regarding this product. This product is issued by National Australia Bank Limited. The NAB Mobile Banking app is compatible with Android and iOS, minimum platform requirements apply.

Apple, iPhone, iPad, Touch ID, Face ID and the Apple logo are trademarks of Apple Inc., registered in the U.S and other countries. App Store is a service mark of Apple Inc. Google Play and the Google Play Logo are registered trademarks of Google LLC.

iOS is a trademark or registered trademark of Cisco in the U.S. and other countries and is used under license.

Android is a trademark of Google LLC.

©2021 National Australia Bank Limited ABN 12 004 044 937, AFSL and Australian Credit Licence 230686.