Buckets of Money

Wiki

Learn about the different bucket types, key terms, and how it all works in the Buckets of Money system.

Bucket Types

Consistent

You use this bucket type for things where the payment is always the same. For example, your mortgage/rent or a streaming subscription.

  • Examples: Mortgage/rent or a streaming subscription.
  • You can edit the amounts of each payment in the future if you need.
  • You do not have to track these each month, because the system automatically takes it out of your available funds.
  • It's easy to see or update your consistent expenses if you need to.

Variable

You use this bucket when you have an amount you are giving yourself to spend over the course of the month. The total you have to spend for the month will be made up of multiple transactions.

  • Examples of this are food/groceries/fun.
  • Once your budget is set up, your variable buckets show up at the top of your dashboard.
  • You need to track transactions for these buckets so you can get an accurate picture of what you have available at all times.

The most common variable buckets will be for things like groceries, eating out, fun, shopping, miscellaneous, and gas.

It's nice to have money left over in these buckets at the end of the month, but it's not common. Usually, you will set the amount you have to spend and likely spend it all throughout the month.

Ongoing

You use ongoing buckets for things that you need or want to set money aside for each month, but only use the money occasionally.

  • Examples include vehicle maintenance and vacation.
  • At the end of each month, the system will add the amount you have set aside for each of your ongoing buckets to the bucket, so you can see what is available.
  • When you purchase something with money in one of these buckets you enter the transaction and the system calculates what is remaining.

The system also keeps a total of all your ongoing buckets, so that as you move forward on your budgeting journey it's possible to start acting as your own bank when you need additional money to cover an expense.

Ongoing Bucket Set-Up

When you set up an ongoing bucket there will be a space for two optional entries:

  1. Money already saved — in this box you enter any amount you have already saved for the bucket in order to have an accurate total of what you have available.
  2. First month's contribution — in this box enter the amount you will save this month for this bucket. The system will not automatically add monthly contributions until the second month of your budget.

Wishlist

This is a space you can set up buckets for things that do not currently fit in your budget, but you want to have money for. You set them up as place holders. When more money shows up in your life, you can choose to use that money for your wishlist.

Other Definitions

Have To Expenses

These are the expenses that you have to pay in order to live. Shelter, food, transportation, etc, plus debt and other payments you are obligated to pay.

In Buckets of Money Budget you set up all of the things you have to pay for in order to live up first, so that everything you need to live is accounted for before moving on to things you want to spend your money on.

Budget Buffer

This is an amount you set aside, 1–10% of your income, in case you forgot to add something to your budget. Often when people are starting their budget journey, they forget to add something that is essential to living. Maybe house maintenance or car maintenance. They might forget a bill that only has to be paid occasionally.

Setting up a budget buffer avoids future pain if you forget something in your budget. If you set it up and nothing comes up in a year, you can change it to a savings account of your desire. But if something does come up, you do not have to take money away from the things you want to pay for in order to cover the expense you forgot.

Want To Uses

These are things you want to spend your money on. They are not essential to living, but they feel good and add joy to your life. After you have accounted for everything that has to be paid, you get to choose how you want to use the remaining money you have available each month.

Transaction

An addition or subtraction to a bucket.

Mark As Credit

This adds money back into your bucket.

Planned Transaction

A transaction that is happening at a later date than today. Use this to enter money you know you are going to spend in the future, so that you do not overspend before the date you need the money.

Deficit

The negative amount that was carried over from the previous month. It is automatically deducted from the current month's bucket.

Carryover

The leftover amount you had in your bucket from the previous month. This is automatically added to the current month's bucket.

Bucket Setup Questions

Q: How do I know when to use a variable bucket?

A: Use a variable bucket when you have a set amount of money to spend from that bucket in a month that you will take from multiple times during the month.

Q: How do I know when to set up an ongoing bucket?

A: You set up an ongoing bucket for something that you are contributing money to every month, but do not plan on spending the entire amount every month.

For example, your car maintenance bucket is an ongoing bucket because you are putting money into the bucket each month so that there is enough there the couple times a year you need car maintenance/repairs.

The money accumulates until you need to spend it. You may use it all or have some remaining after you pay for your car maintenance.

Q: If I have a bill that is not consistent, do I set it up as a variable bucket or an ongoing bucket?

A: Set it up as an ongoing bucket. Enter the average monthly bill into the monthly amount. Enter the amount you entered monthly into the box for the first month's contribution. Each month, enter a transaction with the actual bill amount. Then you will see the running total for the year.* If after twelve months, there is a negative in the bucket, you need to increase your monthly amount. If there is a positive amount after twelve months, you can leave it as a buffer, or decrease the monthly amount you put into that bucket.

*If you see a negative in the bucket, you need to make sure you have enough money in your account to cover the negative when the bill is paid.

Q: What if none of my utilities are consistent?

A: If none of your utilities are consistent, you can choose to set up one ongoing bucket for all of your utilities. In order to get the monthly amount, use the average monthly amount for each utility and add it together. This is the monthly amount you set up in the bucket. Then you enter a transaction for each utility bill as you pay it.

Q: What is the bucket starting balance?

A: This is the total of the starting balance plus the first month's contribution in an ongoing bucket. After you set up your budget, the total of these two numbers will show available in the bucket.

Q: Why do my ongoing buckets show $0 available?

A: If you did not enter an amount already saved or a first month's contribution when setting up an ongoing bucket, the amount available will show as $0. The amount in holding will also show $0 because the bucket contribution will be made at the end of the second month.

Q: What do I do if I forgot to add a saved amount and/or a first month's contribution amount to an ongoing bucket?

A: You can enter a transaction that is a credit with the amount you have available right now. The monthly contribution will be added at the end of the second month.

Q: How do I fund my wishlist buckets?

A: When you set up your wishlist buckets, you are not automatically contributing to them. You fund them through extra money.

If extra money comes from something outside your normal income (bonus, gift, tax return):

  1. Add a transaction, credit, to your wishlist bucket.
  2. The amount of the credit will add to the total you have saved in your wishlist.

If you have extra money in another bucket and you want to transfer it to a wishlist:

  1. Add a transaction (deduction) from the bucket you are taking the money from.
  2. Add a transaction (credit) to your wishlist bucket.
  3. Both buckets will then show the correct amounts available.

Q: How do I change bucket types?

A: To maintain the integrity of the buckets, you cannot directly change bucket types. Instead, follow the procedures below.

Changing a Consistent Bucket to a Variable Bucket:

  1. Set up a new variable bucket with a slightly different name (add a V at the end).
    • If anything has already been spent this month, enter a transaction to deduct that amount.
  2. Edit the original consistent bucket.
    • Optional: add “old” or “archived” to the name.
    • Toggle “Active” off or delete the bucket.

Changing a Consistent Bucket to an Ongoing Bucket:

  1. Set up a new ongoing bucket with a slightly different name (add an O at the end).
    • In “First month's contribution” enter the monthly contribution amount.
    • Deduct any transactions to make the starting balance correct.
  2. Edit the original consistent bucket.
    • Optional: add “old” or “archived” to the name.
    • Toggle “Active” off or delete.

Changing a Variable Bucket to an Ongoing Bucket:

  1. Set up a new ongoing bucket with a slightly different name.
    • Enter the variable bucket's available amount into “amount already saved.”
    • Enter the monthly contribution amount.
    • Ensure the starting balance is accurate.
  2. Edit the original variable bucket.
    • Optional: add “old” or “archived” to the name.
    • Enter a transaction to take the balance down to $0.
    • Toggle “Active” off or delete.

Changing a Variable Bucket to a Consistent Bucket:

  1. Set up a new consistent bucket with a slightly different name.
    • Enter the consistent payment amount.
  2. Edit the original variable bucket.
    • Optional: add “old” or “archived” to the name.
    • Enter a transaction to take the balance down to $0.
    • Toggle “Active” off or delete.

Changing an Ongoing Bucket to a Variable Bucket:

  1. Set up a new variable bucket with a slightly different name.
    • Enter a credit transaction with the ongoing bucket's balance.
    • Enter a deduction for the monthly amount.
    • Verify the available amount is correct.
  2. Edit the original ongoing bucket.
    • Optional: add “old” or “archived” to the name.
    • Enter a transaction to take the balance down to $0.
    • Toggle “Active” off or delete.

Changing an Ongoing Bucket to a Consistent Bucket:

  1. Set up a new consistent bucket with a slightly different name.
  2. Edit the original ongoing bucket.
    • Optional: add “old” or “archived” to the name.
    • If there's a balance, enter a transaction to take it to $0.
    • Add the balance to another bucket using a credit transaction.
    • Toggle “Active” off or delete.