Bank “Savings Buckets” vs. Real Savings Buckets: Why Separate Accounts Win Every Time | 445

0:00What is the difference between a savings bucket and a savings account? and which one is better. I mean, there's a lot of controversy right now about this. People are losing sleep. It's interesting because I actually didn't even know what a savings, like when we, when we go to define it, I had no idea. We came before them. Right. So when they started telling us what their version of a savings bucket, I was like, oh no, that's all wrong. You obviously are not doing it right. Well, the banks, like the banks heard us and started making savings buckets because actually I heard Dave Ramsey today talking about the debt avalanche term came literally after he popularized the snowball, obviously.

0:41And he said a character. I know exactly which character he said that came up with it, but, or he meant, but anyway, so once we, no, I'm obviously being facetious guys, but we have been using the word savings buckets for a long time. And then recently a lot of banks have come out with their version of savings buckets and now it's kind of confusing people. So we're going to set the record straight today about what we mean when we say savings buckets, what your bank does wrong when they say savings buckets, and what you should do instead. Yep. Do you make good money but have nothing to show for it?

1:10Are you tired of living paycheck to paycheck? Do you have big dreams for your financial future? Do you want to get debt free but you don't want to live on beans and rice? Or you don't want to give up those pumpkin spice lattes? Hey, it's okay if you don't already know how to budget or if you're using credit cards to get through the month. Hey, it's okay if you want to seem like you have your finances all together or you're not on the same page with your spouse when it comes to finances. We know what you're doing probably isn't working, but guess what? You're in the right place. We're Shaina and Vanessa.

1:39We're best friends, business partners, and master financial coaches trained by Dave Ramsey. We've been in business since 2019, helping hundreds of amazing people like you create budgets, get out of debt, stop living paycheck to paycheck, and know exactly what to do with their money. In this podcast, we'll share with you everything we know, plus everything we're working on with our clients so that you have the best chance at reaching your financial goals. We want to help you take the guesswork out of your budget, improve your marriages, and even bring your kids in on the conversation. We can help you no matter where you're at, whether you're the single mom who's never had$500 in her savings account or the millionaire who's paid off four real estate mortgages.

2:16And we're not going to shy away from the tough love. We'll tell you what you need to hear and encourage you at the same time. This is the Financial Coaching for Women podcast. Okay, so first thing is we're going to define what people are calling a savings bucket. So savings buckets, what people are saying are savings buckets, they're opening up a savings account, and then within that account, the bank is having like little bitty buckets that you can name and add within that one account. Yeah, and you call them, some people call them subaccounts or something. They're called subaccounts, they're called buckets, they're called, I think, vaults in some banks and different things.

2:51Yeah, there was something else that – pots. Oh, okay. My English – my UK client, they were called pots. It was really cute. Yeah, so that's what people are saying is a savings bucket is like a little divider inside of a big savings account. That's what they think a savings bucket is. That's what the banks have introduced as an option. And what we have always said as a savings bucket is just a separate savings account that you're saving for whatever big ticket item that you're thinking of that you want in your budget. That is a separate account. So what they're saying is one account, many buckets.

3:30What we're saying is several accounts, all separate, all distinguished, all easy to log in and see what you have saved for each saving bucket. Right. Really. And so really what the difference is, is you're either looking at one account with a bunch of money in it that has like a total, but it's categorized or subbed into many different things. Or you're looking at many different accounts that have specific amounts of, yeah, names and amounts of money for that thing. And that's all you're looking at. Yeah. And so this will come up. So for example, when you go like right now, if you have a savings bucket, the way the bank does it, we say, how much do you have for travel?

4:07You have to do a lot of like mental math. You have to go in and look and like figure out which bucket is what versus if you do it the way - And did you transfer like into a bucket? Yeah. Versus if you look the way we tell you, you look in, you open your bank account. The first thing you see under your bills and spending is travel. Like, hello, that should be the first one. Okay. You can reorder them if you didn't know. And you know exactly how much you have for travel. You don't, there's no extra steps, right? And that's what we want you to have. a separate savings account for every single savings, quote unquote, bucket.

4:37That's what we've always called them. So those are your annual bills, your Christmas fund, your glam up, your vehicle maintenance, your home maintenance, your pets, your medical, all of the travel, like we said, all of those are different savings buckets the way that we call them. Like there's stuff that you want to save for throughout the year, but you're going to have separate accounts. We do not want you to use the buckets. Yeah. So I actually want to debunk that, so what would you say if somebody says well no I like my one account because it's one account um because people have well because people have such a friction and a block about opening up multiple accounts and I don't understand because it makes it so much more organized every single person that has come from this bucket system of having one account with many buckets into our system which is having just many accounts absolutely love it so I want to like speak to that?

5:28Like, why are people struggling with this? Well, I think they're in their mind somewhere, like it's more work to have more accounts, but it doesn't do it. It's no more work for you or anybody. You don't have to do any work at all. Okay. There's no work. But what we want you to think about is like, you used to have envelopes, like you would stuff cash in this Disney envelope, or you'd stuff cash in the clothing for the kids. Like we're going to have to go on shopping for back to school. Instead of having physical envelopes, you have digital ones and they're each in a different bank account so you can clearly see.

5:59What you were saying, Vanessa, is why do we not want you to have the one account? Because what that is going to do is take you backwards. You know we don't want you to track anything. We don't want you to have to do mental math. Absolutely not. We're so against that. That's what this is going to have to do. You're really going to have to go back in the weeds and figure it out and see how much is here. What is that? What did I do here? And that's going to take you backwards and make you do more work than you need to. Yeah. Cause now you have to look at that lump of like big lump sum of money and go, okay, how much of that is for this?

6:27How much of that is for that? Cause you have to now go into the account and look at all the buckets instead of just like Shana said, easily pulling up your bank app and seeing it there. It is one extra step. And a lot of banks, you cannot deposit money directly into your bucket. You have to deposit it into that account and then manually like sub it out. And in the same instance, when you go to use the money now, it's more of a pain in the butt to move it from the bucket into your spending account the way that we want you to do it. It's just an extra step. It's now more tracking and it's not worth the time.

6:59Nobody has the time. Nobody wants to take the time to do it. All right, budget besties, it's time for some real talk. You don't need another budget. You need a budget system. Our simplified budget system is what you've been looking for. It's going to allow you to be bougie on a budget. You'll be able to easily set up a system that runs automatically and shows you exactly where your money is going. And it's going to give you permission to spend. Everybody loves that. Yeah. It's straightforward, pretty, and packed with walkthrough videos that break down the exact methods we use with our clients to get out of debt, set up a bills account, separate spending, build savings buckets, and end the paycheck to paycheck feel.

7:38If you're new to budgeting, this is the perfect way to jump in. And if you're already a budget nerd like us, you're about to meet your new obsession. This is the upgrade to your finances that you need right now. Yeah. So head on over to budgetbesties.com forward slash budget and grab yours. Now back to today's show. Our whole system, budgetbesties.com forward slash budget, if you want to check out the system, our whole system is to take this off of your hands, to make it easier, to make it less complicated, less time consuming. And if you can't, like Vanessa said, you can't automate a lot of these things, then what was the whole point?

8:10Okay. What was the whole point? and we want you to have as much going automatic so you can't mess it up when you if it requires you to go in and disperse um when are you going to do that tell me when because it's not going to happen we know you we know you we know that's what my new client she just said she goes i know if i manually go in there i'm going to mess it up just like you told me and i said it just you know and we don't say that to like shame you it just we know we've been there we yes we're just going to call it what it is and make everything as automatic as possible so we are not touching it But having that one account with the multiple buckets, it's in the weeds, it's tracking.

8:42And what you've done now is basically you're like online Excel spreadsheet tracking in a bank app versus just having the separate accounts and visually seeing right there when you open it up what money is for what. And it just makes it so much easier. So we just try it, guys. You're going to love it. Yeah. And so generally, just to reiterate, we want you to have to plan savings buckets. We call them that because it's fun. We didn't know the banks were going to ruin it by making their own version of it. Making their own version, okay? But it's fun. So I have this bucket. I mean, like I said before, like an envelope is for travel.

9:17This one's for pets. This one's for Christmas. This one's for annual bills. This one's for house. We want you to plan those. We want you to have those. They're all going to be separate accounts with their own name, and they're all going to have transfers going into them automatically from your budget, right, depending on what your budget says. We've told you many times over again, you might start small. You might not have a lot to contribute at the beginning, but once you plan them out and you're budgeting and you're doing really well, you'll know exactly how much you need to be putting in those accounts.

9:44You will love being able to see the money stack up. It's going to be life-changing. It's going to be so exciting. You're going to be like, wow, I have money everywhere. That's the point. That's what we want for you. That's why you're going to use separate savings accounts. And again, no sub-accounts. So even when you make those separate savings accounts for all those things, within those, you don't need to make sub-accounts. because I had one client was like, oh, so within that account, now I write like, how much is for this? How much is for that? Like, no, you're getting in the weeds. Like, that's what your budget system is for.

10:14Your bank account is just an extension of that, but it's easier. You don't have to worry about like subtracting everything. Cause again, we're back into becoming a bookkeeper and we don't have time for that. No, nobody has time for that. Okay. So just listen to what we say and do what we say. Okay. Cause that's simple. And we'll see you next time. If you're tired of feeling like your finances are all over the place and you're ready for For a simple set it and forget it way to budget, we have something special for you. Watch our Automate Your Budget Masterclass at budgetbesties.com forward slash automate.

10:43We'll show you step by step how to finally organize your money, how to set up your accounts, and put your budget on autopilot so your bills, saving, and spending run like clockwork. Imagine less stress, more savings, and the freedom to spend money without having to track every dollar or babysit your bank account. Go to budgetbesties.com forward slash automate to start today. Okay.