. What 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. I mean, the people are losing sleep. Well, it’s ing because I actually didn’t even know what a savings, like when we, when we go to define it. Mm-hmm. I had no idea. Well, we were first, 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, I like, the banks heard us and started making savings buckets because actually I heard, uh, Dave Ramsey today talking about, um. The debt avalanche term came literally after he popularized the snowball, obviously.

Ah, yeah. Yeah. Like, and he said a character, I know exactly which character he said that came up with it. Mm-hmm. Or he meant, but anyway, so once we, no, I, 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 are gonna set the record straight today about what’s what, what we mean when we say savings buckets. Yep. What your bank does wrong when they say savings buckets and what you should do instead. Yep.

 Okay. So first thing is we’re gonna define what people are calling a savings bucket.

So savings buckets, what people are saying are, savings buckets are opening, 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 ’em, uh, some people call ’em Subaccounts or something. They’re called Subaccounts. They’re called buckets. They’re called, I think vaults in some banks and different things. Yeah, yeah. There was something else that, um, pots. Oh, okay. My English, uh, my UK client, they were called pots.

It is really cute. Um, yeah, so that’s what people are saying is a savings bucket is, uh, a like a little divider inside of a big savings account. That’s what they think a savings bucket is. Um, that’s what the banks have introduced as an option. Um, and what we have always said as a savings bucket is just a separate savings account.

That, um, you’re saving, uh, saving for whatever big ticket item that you’re thinking of, uh, that you, that you want in your budget. That is a separate account. So what they’re saying is one account, many buckets. Mm-hmm. What 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? Yeah. 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 the savings buckets, the way the bank does it, we say, how much do you have for travel? You 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 way or, 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 ’em. It’s the most fun. We didn’t know. And you know exactly how much you have for travel. You don’t, there’s no extra steps, right?

Mm-hmm. Um, and that’s what we want you to have a separate savings account for every single savings. Quote unquote bucket. Mm-hmm. That’s what we’ve always called them. Um, so those are your annual bills, your, your Christmas funds. Mm-hmm. Your glam up, your vehicle, your maintenance, your home maintenance, your pets, your medical, uh, all of the travel.

Like we said, all of those are different savings buckets, the way that we call ’em. Like there’s stuff that you wanna save for throughout the year, but you are going to have separate accounts. We do not want you to use the buckets. Yeah. So I actually wanna debunk that, Shana. So what would you say if somebody says, well, no, I like my.

One account because it’s one account. Um, why? Because people have why? Well, because people have such a. Uh, friction in a block about opening up multiple accounts and I don’t understand because it’s 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 wanna like speak to that. Like why are people like 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 any, it’s no more work for you. Yeah. 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, um, Disney envelope or you’d stuff cash in the, the clothing for the kids. Like, we’re gonna have to go on Chris, uh, shopping for back to school instead of having physical envelopes. You have digital ones and they’re each in a different mm-hmm.

Bank account. So you can clearly see what you were saying. Vanessa is. Why, why do we not want you to have the one account? Because what that is gonna do is put you go, take you backwards. You know, we don’t want you to track anything. We don’t want you to have to like do mental math. Absolutely not. We’re so against that.

That’s what this is gonna have to do. You’re really gonna have to go back in the weeds and figure it out and see how much is here, what is that? What, what, what did I do here? And And that’s gonna take you backwards and make you do more work than you need to. Yeah, because now you have to look at that lump on like big lump sum of money and go, okay, how much of that is for this?

How much of that is for that? Because 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. Mm-hmm. 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, 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. Um, it’s just an extra step. It’s now more tracking and it’s just not worth the time. Nobody has the time. Nobody wants to take the time to do it.

 Our whole system, budget besties.com/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 take it, 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?

Yeah. Okay. What was the whole point? And we want you to have as much going, um, automatic so you can’t mess it up. Yeah. When you, if, if it requires you to go in and disperse, um, when are you gonna do that? Tell me when. ’cause it’s not gonna happen. We know you. We know you. We know you. That’s what my new client, she just said, she goes, I know if I manually go in there, I’m gonna mess it up, just like you told me.

And I said it just, you know, I, and we don’t say that to like shame you. It just, we know we’ve been there. To we, yes, we’re just gonna 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, and what you’ve done now is visibly 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’s just makes, it just makes it so much easier. So we just try it, guys, you’re gonna love it. Yeah. And so generally, just, just just to reiterate, we want you to have to plan savings buckets. We call ’em that because it’s fun. We didn’t know the banks were gonna ruin it by, by making their own version of it, making your own version.

Okay. But it’s fun. So I have this bucket. I mean, like I said before, like an envelope is for travel. This one’s for pets. This one’s for Christmas. This one’s for annual bills. This one’s for house I. We want you to plan those. We want you to have those. They’re all gonna 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 mm-hmm. And you’re, you’re budgeting and you’re doing really well, you’ll, you’ll know exactly how much you need to be putting in those accounts.

You’ll love being able to see the money stack up. It’s going to be mm-hmm. Like life changing. It’s gonna be so exciting. You’re gonna be like, wow, I have money everywhere. That’s the point. That’s what we want for you. That’s why you’re gonna 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 subaccounts. 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? I’m like, no, you’re getting in the weeds. Like that’s what your budget system is for. Your bank account is just an extension of that.

But it’s easier. You don’t have to worry about like sub tracking everything. ’cause again, we’re back into becoming a bookkeeper. Mm-hmm. 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. It’s that simple. And we’ll see you next time.