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Bucket Financial Strategies

January 25, 2021

What is a Bucket Financial Strategy?

A bucket financial strategy or bucket financial plan is a method of separating your money into different categories, or buckets, to help you manage your finances and plan for a successful future.

There are three different buckets:

Short-Term Income

This is money that is saved to cover living expenses for the next 12-24 months and for emergency purposes. This way, if an appliance in your home or your car breaks down, you'll have money put aside to pay for the repairs.

Intermediate-Term Income

These are your income-producing assets that can continue to fill up the first bucket and your second bucket. This bucket tends to be more income-oriented in what type of assets we would use.

Long-Term Income

This bucket would be your growth money; long-term investments with high returns, such as your stocks.

Why Have Different Buckets?

The reason that you would segment out into buckets like this is that you don't want to have to access bucket three assets at an inopportune time. If something comes up, you've got that slow, steady money over in bucket number one, and you can even cross over into bucket number two. This prevents you from needing to access funds from the third where it can be more difficult to access or that has more long-term growth potential.

Likewise, if you have all of these types of income in one bucket, it can be too easy to lose track of spending or take too much from your growth money without realizing.

Learn More About Financial Bucket Planning

Our team is here to help you manage your finances and plan for a more successful financial future. If you are interested in learning more about the financial bucket strategy or other ways to plan for your goal, contact us today!

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