Four 'money buckets' every family needs in their budget


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With the summer holidays behind us and the new year under way, this is a perfect time to review our finances and plan for the year ahead.

Budgeting is a simple and smart strategy to track your outgoings and minimise the impact of costly surprises throughout the year.

Put simply, this "bucket" method requires multiple bank accounts with regular deposits allocated toward specific categories of spending. Here are some budget ideas to help you plan for the year ahead.

money buckets family saving budgeting


Wouldn't it be nice to have a credit-free Christmas? Simply calculate the approximate cost of your recent Christmas spending and divide it by the number of pay cycles left until next Christmas, which could include purchasing gifts, groceries, alcohol, social outings, taxis, cleaners, gardeners, equipment hire, etc.

Now is the time to start budgeting for next Christmas. As an example, $50 per fortnight is achievable and equates to $1300, which is a great step towards a stress-free Christmas!

Kids' bills

With the cost of starting a new school year following Christmas and summer holidays, this account is used for the cost of education, sports and extracurricular activities for your children, including school/child care fees, uniforms, books, musical instruments, tutors, stationery, clothing, shoes, sports club membership fees, camps and other expenses.

This should reduce any nasty surprises throughout 2018 and also help with the cost of preparing your children for school next January.

Family entertainment

Use this account to deposit a small amount per pay to cover weekend fun and school holiday activities such as movies, mini golf and tickets to see the travelling circus. It can also be used to cover the costs of organising children's birthday parties. It does not need to equate to much, but it will save you a lot of stress if the kids are suffering from "cabin fever" when funds are low!

Fitness and wellbeing

If your new year's resolution included health and fitness goals, now is the perfect time to start a separate wellbeing account.

This account can be used for gym memberships, health insurance, massages, yoga, fitness equipment (such as new clothes and shoes), sports club fees, dance lessons and anything that makes you feel good.

Work out what you are likely to spend in this category per month and stick to your 2018 fitness goals. Any surplus funds can be donated to a charity - altruism is also good for your soul. Win-win!

Although this budgeting method may seem trivial and segmented, it is satisfying to know that you have funds available for expenses that are often overlooked.

These ideas should be included as part of your annual household budget for living expenses.

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Mel Bee
January 17, 2018 5.11pm

Fantastic article! Great, practical ideas that are simple to implement and can be adjusted to our family's budget. Thank you money mag.

Alfonso Spice
January 17, 2018 9.45pm

Such good advice; we budget similarly to this and it really takes the sting out of Christmas.

Jane Pells
January 19, 2018 12.15am

Brilliant article and great advice.