"Bucket Budget"

[Cheryl]

I read this in Money Magazine June 2009 issue. I want to try this. At first glance I thought: this might be a lot of work, but I think I need a system that is going to be a lot of work, this way I will actually keep up with it. Need to check on how to set up a secondary checking account and see if that account can be linked to the primary checking and the savings account for ease in transferability.

Here is the link to the rest of the article that features two other budget methods if the first doesn't tickle your fancy, then you can try one of the other two.

[SavingsSleuth]

I've been doing something like this for years, although I don't have to have a separate checking account to do it. I have a bunch of "secondary savings" accounts set up with my credit union for each of the following (plus some others):
- Mortgage (1/2 of the mortgage goes in each pay)
- Car payment (1/2 of the car payment goes in each pay)
- Car Insurance (once a year I calculate how much needs to go in here each pay to cover the entire premium when it's due
- Vacation
- Utilities
- Car repairs
- Pet medical expenses
- Gifts
- Charity

etc.

My direct deposit FIRST funds all those savings accounts (automatically...I don't touch it), and then whatever is left over in my checking is those "variable expenses" listed in that graphic...groceries, entertainment, haircuts, clothes, etc.

If I need to pay one of those other expenses like my car or the mortgage, I take about a minute to log into homebanking and transfer the money from that savings account to my checking...and then use bill pay to get the payment on its way. Fast and easy.

Once the money in my checking is gone, I consider myself broke, even if there's additional monies in those other savings accounts.

[Alex]

I have also been using this method for several years and am very happy with how easy it is to do and the benefits it can bring. I use two checking accounts as the article suggests and separate my fixed from my variable expenses. I have also allocated an additional $25-$50 to the fixed expense checking account to cover any repairs on our home. This saved us from having to dish out a large sum when we had a leak and had to spend $300 on carpet fans to dry out our carpets. I would recommend this method to anyone who wants to enhance their budget and not have to worry about keeping a certain amount of money in a single checking account to make sure they have enough to pay their larger bills at different times of the month.