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Why your Bucket List really is about buckets

Wilson Luna

Bucket lists are a great way to get organised about the things you really want to do in life. But because not all of the best things in life are free, you’re going to need to use some simple money management strategies to make sure that you’ll have enough cash to tick everything off your list.

The 2007 film 'The Bucket List' started a lot of people talking about the things they would have on their bucket list, and if you take a look around the internet, there are no shortage of ‘things to do before you die’ lists and guides out there to help you get yours done. But while writing Bucket Lists can be a lot of fun, the truth is that most people only ever get that far – their Bucket List sits in a drawer, gathering dust and the things they’ve dreamed of doing continue to just be dreams.

Here’s why: without a plan, dreams can’t become goals – and just writing the list isn’t enough of a plan to make it happen. That’s where the Three Bucket Savings Plan comes in!

In our first book, Real Money Advice for Families, we talk about the Three Bucket Money Plan. In a nutshell, it divides your savings plan into three ‘buckets’ – one for short-term goals, one for medium-term goals and one for long-term goals – and each of these buckets is treated in a slightly different way to ensure that the money you’ll need to achieve your goals will be there, and accessible, when you need it (you can find out more about the Three Bucket Savings Plan in Chapter 14 of the book). The reason that a plan such as this is important is because saving for ‘nothing’ is not fun, and without a goal to aim for there’s little incentive to keep going when you’re tempted to spend your money now. This slightly different approach to saving actually makes it more likely for you to save successfully, because you’ll have a structured plan to follow with a clear reward waiting for you at the end. And the great news is that it’s as easy as 1, 2, 3:

Step 1 – Write your Bucket List 
Brainstorm all of the things you’ve always wanted to do in life, and let the sky be the limit. They don’t have to be big or expensive things, just the things you’ve always wanted to do. And remember, this is a work in progress so don’t worry about getting it perfect, just concentrate on getting it started.

Step 2 – Break it up
Split your list into three columns: things you want to do in the next 12-24 months, things you want to do in the next five years, and things you want to do after that. Next, take the ‘best things in life are free’ items from each list and put them right at the top – they’re the things you can get started on while you’re making your savings robust enough to pay for the things on your list that aren’t free.

Step 3 – Set up your Three Bucket Savings Plan
Each of the buckets needs a slightly different savings system to deliver the results you need, so let’s take a look at each of them:

Bucket One – this is for your short-term goals, so you’re going to want to be able to get your hands on your cash when you want it, while still getting the best saving rates possible. High-interest online savings accounts are great for Bucket One, and if they can only be accessed through a linked account it makes it easier to resist the temptation to tap into them on impulse.

Bucket Two – because you’re not going to need to get your hands on this money as easily, you can choose savings options that take a little longer to mature, such as term deposits or even some low-risk shares.

Bucket Three – this is for your long-term goals and you’ve got quite a while to save for them, so it could be worth looking at some long-term options, like a managed investment portfolio and property investment.

Of course, if you’re starting from scratch, you’re going to need to build up a bit of a nest-egg before you can start investing in term deposit accounts or a share portfolio – so your first step is to open a separate high-interest savings account for each of your buckets, and then start filling them up!

The best way to do this is to work out how much it will cost to achieve the first ‘paid’ item on each of your Bucket Lists, break it down into weekly instalments and set up a direct deposit from your transaction account each week so you can’t forget to do it, or ‘steal’ the money for another purpose.

Everyone has things that they want to do ‘one day’, but not everyone has a plan for making them happen – use the Three Bucket Savings Plan to start working out how to make the things on your Bucket Lists happen, and make ‘one day’ a solid date to aim for in the future!

If you liked this article you might also be interested in these other articles about using money management to plan for the future:

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Author's Biography

Wilson Luna is an author, wealth adviser and founder of Your Family Your Money. Your Family Your Money’s goal is to simplify traditionally complex financial strategies, demystify financial jargon and debunk common financial myths, becoming every family’s first stop for financial advice, information and inspiration.