The Art Of Bucketing Your Money

line in the sand

When you know what you own and why and where it fits into your financial picture, you make better decisions.  We believe that there are five different “buckets” of money or locations people can store money.

The first bucket is our “emergency funds.”  We generally recommend 6 months worth of expenses be set aside in a savings account.

Bucket #2 is for “major purchases” in the next 3 years that you plan on paying cash for.

For example, I have monthly expenses of $6k/month.  In addition, I plan on adding a outdoor kitchen to my house that will cost $20k.  I need $56k in cash equivalents ($6k x 6months + $20k).


For these 2 buckets of money, the only two things that matter are safety and liquidity.  Did you notice how I didn’t say growth?

People get into trouble when they can’t segment their money.

Information in this material is for general information only and not intended as investment, tax or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision.

All investing involves risk including loss of principal.

All company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

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