Many Australians are using the money guide by the Barefoot Investor to budget and achieve their financial goals.
The Barefoot Investor allows you to budget by using three categories, which are referred to as buckets, to make the process simple and easy to understand. Also, when it comes to budgeting, remember that it’s the small changes that count! Therefore, if you change one thing you do on a regular basis, you could end up saving a significant amount over your lifetime! As a result, it will help you with your budgeting and increase your savings.
Therefore, if you’re looking to start budgeting, we have broken down the Barefoot Investor plan below.
Who is the Barefoot Investor?
Scott Pape, also known as theBarefoot Investor, claims to have made the only money guide you will ever need. He has broken down budgeting intothree bucket structure to manage all incoming money. These buckets are namedBlow, Mojo and Grow.
Instead of putting all of your income and expenses into spreadsheets, the Barefoot Investor, advocates to divide your money into “buckets.” This approach ensures that your daily expenses are separated from splurge purchases such as coffees, as well as ensuring smile purchases, such as holidays are achievable – all while saving for a house deposit. This is known as the set and forget principle of money management.
Blow bucket
Your blow bucket is allocated to your day-to-day life. Therefore, as stated by the Barefoot Investor himself, you use this bucket to divide your income into your daily expenses, bills, and splurging.
When diving your income, the Barefoot Investor suggest that:
60% of your take home pay goes into ‘Daily Expenses’.
10% goes into a ‘Splurge’ account – this means you can spend this money on anything you like i.e. going out for dinner, shopping, movies, etc.
30% is divided into two other savings accounts for medium savings goals. About 10% goes into a Smile account to save for exciting things such as a holiday or a new TV. The other 20% goes into a fire extinguisher account which can be used to either save for less-fun things such as a house deposit, or put out financial fires such as paying off debt.
Grow Bucket
The second bucket by theBarefoot Investor is the grow bucket. This bucket is for long-term savings and security. Many australians tend to focus on their short-term and medium-term savings goals, that they tend to forget about the long-term which is many year down the track. Therefore, they money going into your grow bucket may consist of your superannuation, shares, and property investments. As a result, this bucket is there to ensure that once you are retired and no longer working that you are able to live comfortably.
Mojo Bucket
The Barefoot Invested created the mojo bucket to be your emergency firehose. This bucket allows you to ensure you have savings on hand for emergency situations. Therefore, you only ever touch this money in emergency circ*mstances, and as suggested by the Barefoot Investor, it should be kept in a high-interest savings account. Overall, the amount you need to save up for your mojo account is equal to three months of living expenses.
Sometimes, it can be tempting to dip into this mojo account. However, as recommended by the Barefoot Investor, to avoid this temptation, keep this money away from your everyday banking account. In fact, you can keep it with a seperate bank altogether!
When opening your mojo account, the Barefoot Investor suggests to try and deposit $2000 into it as soon as possible. However, if this is something you need to save for, see what you can sell to come up with this amount. Try and declutter your house and sell unwanted and pre-loved items on Gumtree, Facebook or eBay!
How can I start saving money as suggested by the Barefoot Investor?
On top of the above tips by the Barefoot Investor, the option of working from home provides you with the opportunity to save money, while still earning an income! In fact, by working from home you can minimise and reduce your current expenses. This makes it easier for you to determine how to budget. This will not only provide you with more financial freedom, but it will allow you to grow your savings!
Here at TalentMed, we know one of the best careers where you can work from home is aMedical Transcriptionist. A career inmedical transcriptionnot only allows you to pursue a career working from home, but it provides you with increasedflexibility. If you are interested in working from home as a Medical Transcriptionist, TalentMed’sDiploma of Healthcare Documentationprovides you with the essential skills and knowledge needed to get a job and excel in this increasingly popular field.
If you would like more information,you can register for a free consultation with one of our Course Advisers below!
Want to find out more?
Enter your details below to receive a free information pack instantly.
Related Posts
The Top 10 Skills Every Successful Practice Manager Needs
Tuesday, 10 September, 2024|0 Comments
Clinical Coding: The Hidden Gem of Healthcare Careers
Friday, 9 August, 2024|0 Comments
Do Clinical Coders Need to Be a Member of a Professional Association?
Thursday, 20 June, 2024|0 Comments
Unlocking Opportunities: A Guide to Clinical Coding Jobs in Australia
Tuesday, 4 June, 2024|0 Comments
