3 Buckets You Need To Create a Successful Budget, According to a Self-Made Millionaire
Written by
Gabrielle Olya
Edited by
Molly Sullivan
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Many people dread making a budget — but your budget shouldn’t be difficult or constricting.
“If your budget makes you feel like you’re being punished, you’ll quit,” said Bernadette Joy, a financial coach and self-made millionaire. “A strong financial plan should make you feel empowered, not restricted.”
In her book, “Crush Your Money Goals,” Joy outlines the three buckets every budget should include to ensure it’s one you’ll actually want to stick to.
Bucket 1: Survive
The first bucket — “survive” — comprises all of your essential expenses. This includes five line items:
- Housing, including your mortgage or rent plus other housing-related expenses like taxes or insurance
- Utilities, including your phone, internet and other services
- Food, including groceries, takeout and meals at restaurants
- Transportation, including car payments, gas, parking and any commuting expenses
- Health expenses, including personal hygiene supplies and medical expenses
“These are non-negotiables, and we’re not dwelling on them because life’s about more than just surviving,” Joy wrote in her book.
Ideally, your “survive” bucket would account for 25% of your income.
Bucket 2: Revive
The “revive” bucket includes all your nonessential expenses that make you happy.
“Have a ‘revive’ section — not a ‘deprive’ mentality,” Joy told GOBankingRates. “Instead of focusing on what you’re cutting out, make sure you’re budgeting for what replenishes you — whether that’s a weekly coffee, a fun activity or self-care. People are often surprised that as a money coach, I encourage people to spend up to 25% of their budget on wants. It makes it less mundane and more joyful!”
Bucket 3: Strive
The final bucket, “strive,” is dedicated to building wealth. Joy recommends dedicating 50% of your budget to this category.
“This bucket includes money you’re saving, investing and using to pay down debts — anything that moves the needle on growing your overall net worth,” she wrote in her book.
This can include money you’re saving in an emergency fund; any debts you’re paying off; investments in retirement accounts, brokerage accounts or property; investments in your education, such as coaching or courses; and business expenses that can help you increase your revenue or efficiency.
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