Savings buckets enable you to organize your money in a way that aligns with your lifestyle and financial goals. Depending on your bank, you can create a certain number of various savings buckets within one bank account. Each one of the saving buckets is then dedicated to a different goal, such as your dream vacation, emergency fund, or your future home renovation project.
Read on to learn more about what saving buckets are and how they can help.
Savings Buckets – A Great Financial Management Strategy
You might want to think of saving buckets in terms of a great financial management strategy where you divide your savings into different buckets or categories. Subsequently, each one of these buckets represents your specific goal. You already get the picture that with the help of savings buckets, you can track your incoming and outgoing money, organize your finances, and prevent your potential savings from being used for purposes that you don’t really intend to, as this might lead to wasting your hard-earned money.
Create Buckets with High-Yield Savings Account
To make the most of this financial management strategy, we recommend that you create high yield savings account with buckets, as you get a high interest rate on such accounts. Compared to traditional savings accounts, the high-yield savings account will enable you to grow your money faster, which means that you can reach your financial goals faster, too.
You might want to choose a high-yield savings account with SoFi, as SoFi savings vaults will help you bucket your savings for various goals, while you can earn more than three percent annual percentage yield. Thus, you can easily organize your funds with your high-yield savings account.
Potential Benefits of Saving Buckets
Primarily, the greatest benefit of savings buckets is all about organization. Instead of having 1 lump sum for all your savings, savings buckets enable you to create separate buckets or envelopes for different goals, such as your emergency fund or your dream vacation. This way, you won’t be looking at your savings accounts holistically; instead, you will have various envelopes or categories representing your various financial goals. This makes organizing your savings money so much easier.
Flexibility and Goal Tracking
Apart from helping you organize your savings money, you can leverage savings buckets to track your various financial goals. You can use financial apps to visually assess the progress in the form of a pie chart or progress bars. You can keep adjusting the amount that you’ve collected in each bucket along with the shift in your priorities, especially when you get closer to reaching a specific financial goal.
Since you will have a clear overview of your savings in the form of buckets, you will be less likely to overspend or use funds that you have primarily intended for one goal or another.
Also Read: How to Grow Your Savings While Paying EMIs: A Calculator-Based Approach
Final Thoughts
It wouldn’t be wrong to state that with savings buckets, you can effectively manage your financial goals as you get to break down your savings into various categories, with each category representing a separate goal. Savings buckets enable you to align your financial strategy with your personal priorities to make smarter financial decisions in the long run.
