How Many Savings ‘Buckets’ Should You Really Have?

At the beginning of a new year, along with promises of gym memberships and smaller to-do lists, comes the compulsion to set financial goals. After all, no matter how you spent lockdown, chances are you're a bit more stressed about money.
As many financially savvy folks will attest, the first step to saving is always keeping track of your spending. One easy way to manage that is by 'bucketing' your savings into separate savings accounts. A method made popular by The Barefoot Investor, the bucketing technique simply involves opening multiple savings accounts for different needs and allocating a portion of funds into each, depending on its purpose.
While opening up even more accounts may sound like an extra headache, the idea behind the method is that you divvy up your funds before you get the chance to spend them. Maybe you're consistently underestimating bills or spending more on eating out than you're putting towards your upcoming holiday. No matter your situation, being able to where your money is going, and only having debit cards for specific spending accounts, can go a long way in helping you save. Plus, balancing the accounts can be super satisfying.
But what are the best ways to split your savings? Ahead, we break down the most important 'buckets' to consider opening up in 2022. If you're not sure of how to apportion funds to each 'bucket', it might be a good idea to familiarise yourself with the 50/30/20 rule, where you spend no more than 50% of what you earn, spend 30% and save 20%.

More from Work & Money

R29 Original Series