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WHAT IS A MONEY BUCKET?
It’s simply an account where you keep your money until you are ready to use it. That could be a money market account, investment account, retirement account or a savings account which is the example we’re using here.
HOW DOES IT WORK?
Using one main savings account, you can easily create many different buckets that you designate for all the different things you want to save for, such as:
o Emergency fund bucket
o Professional development bucket
o Short-term savings bucket
o Dream vacation bucket
o New car bucket.
o College education bucket.
Whenever you put money into your savings account, you can designate which bucket that amount will go into. You can also set benchmark dates to indicate when you want that bucket to be filled by.
BENEFITS OF THIS SYSTEM:
– Keeps you organized.
– It makes saving exciting and more fun.
– You can watch your buckets filling up and visually monitor your progress!
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This content comes from chapter 6 of How to Embrace Your Inner Millionaire.