Barefoot Investor Bank Accounts and Buckets Explained

[@RileysFilms]

I decided on Me bank for the 4 main accounts after weighing the pros and cons. ING only gives you the bonus interest in one savings account. The other one only gets 1% interest. There's also a minimum deposit of $1000p/m, and you have to do 5 transactions a week. With Me bank the bonus interest covers all savings accounts, no fees either. The only requirement for bonus interest is to use tap and go to make a payment every week. Ubank was almost better, but it has ATM fees. I used RAMS for mojo. 3% interest per month, requirements are to deposit $200 per month without withdrawing.

[@AussieMoneyMan]

BOQ is highest now for under 25s

[@benno_360]

RileysFilms oh nice. Just signed up with Me today. They also stick it RIGHT UP the big 4 and that’s appealing to me.

[@beowolf4572]

Thanks bro! This was the answer I was looking for! I signed up with an ME everyday account and online saver a few years ago, but stopped using it. After reading halfway through Barefoot Investor, I decided to check my ME Bank account... and to my surprise there was no negative balance, after I withdrew everything a few years ago. Wasn't sure if I still supposed to sign up for an ING account, so it's good to know there are others who went with ME Bank.

[@alyciette22]

I've just opened ME Bank for my 4 accounts, and UBank for my Mojo. Being a less used account, I figured I wouldn't be needing to withdraw via ATM :)

[@alyciette22]

@Rhys Dyson it says the bonus interest is only applied to the first savings account. As it is with every bank. But ME is still a higher base interest rate than many others.

[@petebeat1510]

Awesome vid mate!! Cleared up a couple things, waiting on my audio book to come in the mail! Have a good weekend

[@billyatkinson1130]

pete beat amzn.to/2HSaBcy get your hard copy now!

[@emilyglynn1132]

this was so helpful i was so confused reading the book

[@karenschelbach4092]

Emily Glynn I was too!!!

[@AussieMoneyMan]

Great video, shame there is not more like this on KZbin! Thus I made my channel. Keep up the good work man

[@alexandramcleod2079]

Brother you speak too fast 😳😅🤣🤣

[@AussieMoneyMan]

@@alexandramcleod2079 I do!

[@SohanGokarn]

I think you've got the equation slightly mixed up - meaning out of the 100% total income, 60% goes towards daily living expenses, 10% goes towards the Splurge account, 10% goes towards the "Smile" account and 20% goes towards "Fire Extinguisher" account. I reckon you might have meant the same, however the video explanation says that the Smile and Fire Extinguisher %'s come out of the 60% living expenses account, which I'm referring to as inaccurate. Thanks for your video though, because your authentic and genuine nature is as good as Scott's. :)

[@willd0g]

Sohan Gokarn agreed he’s leaving 30% left on the table haha but you’re right it was a clever video depicting the buckets that way really helped particularly with the redirection of the fire extinguisher pointing to mojo and then grow depending on how far along the journey you are

[@karenschelbach4092]

Thank you SO much! I listened to the audio book AND I bought and read the book but still didn’t understand how I got money into mojo and grow if 100% was going into the blow bucket?!? Your diagrams made it crystal clear for me. I found the book has way too much waffle to sift through in order to get the facts of what to do. Thanks for clearing it up for me!!! 🙏🏽

[@clown192]

I think the biggest thing to take from it all is you start to play around with the buckets or whatever and learn about your money while doing it, rather than just waiting for a bill to come in and crying because you don't have any money.

[@onproperty]

Yeh learning about your money is so key

[@AussieMoneyMan]

So true

[@brianrvarghese]

Fantastic explanation mate. Kept re-reading the chapter but it wasn't clicking with me. You summed it up great!

[@carylsk98]

I have a question- Fire Extinguisher is the account to pay down debts however you cannot set up direct debits or Bpays from this account. So to pay anything you need to transfer it back to the everyday which seems a waste of time. Am I missing something?

[@ChrisSmith-wi3mq]

Wow this is a great video i was scratching my head after the book on bank accounts. It was meant to be simple but this video now makes me understand there is a alot thought and work into every expense. I completely get why people say ohhh stuff it too hard

[@jacquewebb6479]

Thank you so much,..... you did make it so much clearer. the fire extinguisher, mojo and grow buckts did confuse me.

[@onproperty]

You're so totally welcome. I was really confused as well and it took me parsing through the book multiple times and actually setting it up myself to actually work it all out. Best of luck!

[@onproperty]

Thats great to hear! Cheers, Ryan

[@onproperty]

Yeh I found it pretty confusing too and had to map it out and watch a bunch of KZbin videos myself to really understand it. So I'm glad my explainer video about the bank accounts and buckets helped you.

[@hsk8787]

Actually, Heapsss of banks dont have fees anymore. Alot of barefoot advice is slightly misguided. He also over complicates the structures unnecessarily

[@karenschelbach4092]

Really over complicated!! So simple really

[@theguitaramptech]

Great video. Thank you for your work. I have asked Scott (Barefoot) this question, but no answer yet. How should you adjust your buckets if you have a business where the income varies greatly, and we need a Bucket for Tax and for Super? Any suggestions are welcome.

[@claredickins9846]

would also love an answer to this question

[@shauncostigan7021]

Can anyone name that flowchart software?

[@edenconnell4322]

Helped heaps I run my own business so "The Pot" can be the account for all my paid invoices. Cheers

[@onproperty]

No worries. Glad I could help

[@AussieMoneyMan]

Me too!

[@annalisekelly7322]

Hi, thanks for your video! I've been getting confused around the MOJO account. I'd love some clarification from anyone! :D 1. start with $2000 2. put 20% in (after fire extinguisher has dominoed debts) 3. save 3 months of (and here's the question) is it just living expenses ie rent, petrol, electricity, insurance groceries, netflix, spotify OR entire blow bucket which includes all that's a part of daily expenses + 10% splurge + 10% smile OR as you've said 3-6 months of your income ?? Scott has used "blow bucket" and "living expenses" interchangeably however my understanding was that blow bucket was the combination of splurge, smile and living expenses. Below quotes from book: "You’re going to boost your Mojo Bucket to three months of living expenses in case of an emergency (and an emergency isn’t a trip to Bali because Jetstar is having a sale). Okay, but how much is that? Simple. It’s whatever you’re putting into your Blow Bucket each month-times three." "Yes, our entire money management plan consists of dividing our income into three ‘buckets’: a Blow Bucket, for daily expenses, the occasional splurge and some extra cash to fight financial fires a Mojo Bucket, to provide some ‘safety money’, and a Grow Bucket, to build long-term wealth and total security."

[@alexc5369]

We have a similar setup to you except we do use a cc, (free with the package we're on) all of our accounts are offsetting the mortgage, and by using the credit card (properly) we save quite a bit on mortgage interest as the money is kept in our accounts longer.

[@onproperty]

I say do what works for you. We are aiming to get rid of our credit card 100% but that's because we find it more a hinderance than a help. But if having a CC works for you then more power to you! This isn't one size fits all. This is do what works best for you :)

[@m2comp369]

There are so many accounts here that you'll spend most of your time consumed by transactions! You say 'do what works for you' but simplicity and consolidation of debt I would have thought is the key to all of this. Oh..... and let's not forget about discipline too because if you can't afford it - don't buy it! Mr Pape (in one of his videos) recommends paying off the home as a priority so all these multiple accounts imo goes against the idea of having as much of your income paying down the loan asap. I have a very simple structure in place - a line of credit that does it all (income and expenditure) and a credit card that is used only as a last resort and when used, is always paid by the due date. Yep... it's that simple and of course stay away from anything charging you an interest rate more than your line of credit - another example of discipline and common sense. How easy is that? Now that's mojo!

[@onproperty]

Me and my wife used to do everything out of a single account and we found it too confusing to track how much money we are spending each week. While this may look complicated basically all money goes into the pot and then is automatically sent to the separate savings accounts. So really me and my wife only focus on the Everyday Spending account each week except when we have to pay a big bill. Fire Extinguisher money is also sent instantly to pay off debt (which could be your home loan). This is working really well for us, better than anything we have ever done in the past. If your strategy works well for you great, but we are all different.

[@m2comp369]

Yep .... whatever works for you, stick with it!

[@mrc5729]

Thanks for that mate! Haven't bought the book yet but started to research a little bit. Just to clarify as your graph is slightly confusing: The Pot: 60% of income Splurge: 10% of income Smile: 10% of income or 10% of pot? Fire Extinguisher: 20% of income or 20% of Pot? I'm assuming all those percentages are based off the income, just double checking :) Cheers and thanks!

[@antmarino1]

Isn't splurge meant to be 10% of what's left after taking 60% of earnings for expenses and spending it and not 10% of earnings?

[@94jaydogg]

good video mate, I already had an okay saving system but after watching this I've learnt a few more tricks to improving it more. Thanks

[@AussieMoneyMan]

Definitely

[@JoshBatalibasi]

Very well explained video mate.. keep them coming 👌👌👌

[@kathhawkins4816]

Mainly good stuff. But reckon you might be missing out on the power of compound interest in your pot by having too many separate savings maximizer account? Just sayin'...

[@SniperWolf3015]

This is exactly what I was thinking! Wouldn't you rather have it all in one savings acct and get a bigger bonus interest rather than spread across multiple ones?

[@stevensloan8617]

@@SniperWolf3015 I dont think so, the interest that is paid in each account would end up being the same because they are all compounding at the same rate

[@evinscanlon2944]

Does he recommend that you close down your current account with the financial instruction? For example should I close down my commonwealth account or use if for MOJO?!

[@katemercader6800]

Try Credit Union Australia, no fees as well

[@onproperty]

Thanks for the tip. I'm happy with ING but if I ever need another one I'll check them out

[@rougenior]

Thanks for explaining this. I’ve read both books, but was confused about scot’s bank accounts. It’s more confusing when you listen to it on audible

[@thememoryguardians]

I agree with your wife on the Orange ING account 😂 the aesthetic of it was so displeasing to the eye I never wanted to open the website or appso I closed my accounts. Thanks for explaining the buckets though I find the names pretty confusing. :)

[@snoringdragon1980]

What does he mean by zero fees? Is it monthly inactivity fess or what?

[@SweetieGospel]

Thanks for a great video. Your personal set up makes sense to me. This is just what I need.

[@AussieMoneyMan]

Definitely

[@leighjackson19]

Hi Great video. How do you spend your splurge without a card or atm access?

[@RyanMcLeanau]

We transfer it back to the spending account when we're ready to spend it. Cheers, Ryan

[@emanoj]

Thanks for the video explanation! Very helpful. If a couple, do you set up the Splurge account also as a joint account? I think in the book, Scott refers to Daily Expenses as being a joint account but perhaps I am wrong and he meant both. Could you clarify for me please? Thanks again :)

[@thelifeofken2221]

joint but I have seen other youtubers who set it up as separate and that what I would do.

[@SniperWolf3015]

If you have multiple savings account don't you get less credit interest from all of them? Isn't it better to have 1 big chunk of your money in one account so you get more interest?

[@samboc8568]

nice explanation, out of interest, what is the app you are using for the demo?

[@lauren8627]

So all the accounts are joint except the pot? Is that correct? The barefoot investor is very against separate accounts for married couples. I'm not married, but in a defacto relationship with a child so I figure it is the same except I really dislike the idea of joint accounts because I don't trust anyone with my money. Any ideas? What do you do?

[@onproperty]

You do you. Couples need to define their own ways of managing money that works for them. You can do that in joint accounts or you can do it separately. What you do is completely up to you.

[@jaredtansley3236]

Awesome video matey, please do more

[@danterodrigues__]

Cheers mate, simplified it heaps

[@fluke1080]

Thanks for that awesome video. Question - where does saving for a home loan come into it? Do you do that (get your 20% deposit) before building up your Mojo (3-6months of income)? Cheers.

[@onproperty]

Barefoot talks in his book about using the Fire Extinguisher to domino (aka pay off) your debts first, then to save a house deposit and buy a house and then to build up your Mojo to 3 months worth of income. He suggests using the fire extinguisher + earning extra money + saving like a boss in order to do it as quickly as possible.

[@saundy24]

Great example!! Thank you

[@onproperty]

You're welcome. Hopefully it helps you organise your finances

[@nobodyreally0162]

Thank you for the video.. I still would like to talk to someone in person.. to help with the finer details.. thank you…!!!

[@jakel.4688]

Great explanation, thank you for your time.

[@undeniableparadox7458]

I feel like the barefoot investor just boils down to save and invest instead of using credit cards. I don’t understand the hype because this just seems like common sense.

[@onproperty]

Common sense is sometimes very uncommon. I definitely struggled with budgeting for years until reading this book. But if you don't need it then that's fine, but a lot of us do.

[@AussieMoneyMan]

@@onproperty Very true but CC are great for stoozing (free money).

[@JAFFAST1X]

Nice vid. Would paying debt be a higher priority over saving? Then save once debt free

[@onproperty]

Thanks for your comment. Check out this video I did on that exact topic kzbin.info/www/bejne/m5rGoK2MaNJ-Zs0

[@Ranger330]

If you transfer into your daily expenses account from 'the pot' instead of having your wage put in, will you incur atm fees etc.. ? because you haven't transferred from an 'external' account?

[@onproperty]

Ummmm I will need to look into this as I'm not sure. Maybe I need to get some of my wage directly deposited into my everyday expense account

[@reivilo6798]

Hi mate, thank you for this video i like the way you have set up your accounts. Just starting the book and also opening up my accounts.Just regaring the saving accounts it is good maybe to explain that only one of the saving maximiser will be full rate at 2.8% (because of the depoit of $1000 every month + 5 debits per month mini ) the other will be at 1%...am i right ? How is it working for you ?

[@AussieMoneyMan]

Definitely a good idea and if you are under 25 go BOQ

[@amystewart6479]

thank you! very well explained

[@AussieMoneyMan]

Indeed, he is great!

[@CuppaTCat]

Hey Ryan, does my partner and I both set up these two accounts individually? Thus keeping our accounts seperate? Or as joint? I wasn’t too sure on that when I read the book. Cheers mate, loved the vid

[@onproperty]

Either or. Me and my wife set up joint accounts and used them together (while we were together). It depends how you want to do it.

[@suzannemcghie6532]

@@onproperty hi there, imho it is improtant that each person in the couple keeps a bank account in their own name in the horrible situation that one person dies unexpectedly. cos some banks will freeze the account and you have no working account till all is resolved.

[@jordanroberts6022]

What software application where you using to graph the different accounts?

[@onproperty]

I used a free mind map software bubbl.us/

[@helenlingard7790]

what if you're not in Oz and no ING?

[@huntingwaterfalls]

I'm sure there are a bunch of online banks without branches that don't have fees in other countries.

[@heatherteamo7593]

What do you do if you lots of debts do you still have a grow account or do you pay off debt.

[@onproperty]

I believe Barefoot talks about using the Fire Hydrant money to pay off debts first, then using it to invest (buy your own home then invest in stocks I think is what he says).

[@ggardner3498]

Hi, If you have a mortgage do you just pay minimum and build up in a savings account and do lump sums every say 6 months

[@willd0g]

G Hover I’d say it depends on how your other buckets are doing I.e yes pay the minimum and use the fire extinguisher to pay off credit card debt/ personal loans ; then have your mojo built up for 3-6 mths of income. So for me it would really come down to the choice of where to go from there with the fire extinguisher ; perhaps split the 20% into paying down the mortgage faster and the other 10% into the grow account?

[@peterblack2949]

I bought the book from ur link

[@onproperty]

Great to hear, hope you get as much out of it as we have. Cheers, Ryan

[@tinaleonie5811]

Thanks

[@onproperty]

Glad you enjoyed the video. Cheers, Ryan

[@bonzabooks4375]

Where did you get that round surf print that’s on your wall? I want to buy it with my Splurge money!

[@RyanMcLeanau]

Its from Freedom Furniture :) Cheers, Ryan.

[@heatherbaldwin2099]

Bank Australia has a similar high interest rate to ING for savings, no account keeping or ATM fees, but unlike ING it only invests money in ethical investments - no fossil fuels etc :)

[@amandamckennalupahowl9587]

This how I do it because I am paid monthly and my partner is paid weekly

[@billyatkinson1130]

Amanda McKenna Lupa Howl amzn.to/2HSaBcy get your copy now!

[@paulablanchard7446]

Weird why all of these names fire engine, pot, smile lol weird world of budgeting these days

[@billyatkinson1130]

paula Blanchard amzn.to/2HSaBcy get your copy now!

[@cmcmanaway]

I’m listening to the book now he’s making a lot too complicated all you need to do is with them to savings 10% be sent to investing in 10% to Charity 10% so you need basic quick and simple and then with the rest for that’s what use for every day living

[@dylandurose7096]

cmcmanaway charity? Nah...Bugger charity. My tax is my charity payments.

[@AussieMoneyMan]

Yeah

[@dusk1234567890]

You have to be earning a lot to have that many accounts...

[@AussieMoneyMan]

Not necessarily.

[@dusk1234567890]

AussieMoneyMan Sure, you can divide up any amount in 4-6 ways, but you be won’t saving much. See how much you save if you make less than $900 a week and you got mortgage and bills and such and you’re dividing that amount in 5 accounts.

[@AussieMoneyMan]

@@dusk1234567890 Before or after tax? The point though is to have it automated so it avoids self discipline issues :)

[@cherieg-johns1650]

I don’t like the colour either. FYI