The Barefoot Investor recommends opening an ING account, 0 fees, higher interest (even with the rate cuts recently in Australia), and opening a separate bank where you can’t touch the money! He recommends Ubank for Australians. Budgets aren’t really helpful, but the following steps are good because they allow you to spend 10% of your wage on things you actually like rather than restricting yourself. Here is the Barefoot Investor’s bucket idea:
Here is the guide that the Barefoot Investor recommends:
- 60% of your wage is for “daily expenses” which includes bills, groceries, petrol.
- 10% for your “splurge” which is a new pair of shoes, going out for a nice dinner, or whatever other exciting things you’d like to spend it on.
- 10% for “smile” which is for an overseas holiday, long term savings for something that makes you smile.
- 20% for your “fire extinguisher” which should be 3 months of your living expenses, this goes into a separate bank, one with 0 fees and high interest.
The first 3 steps are all in the same bank, but with 3 different accounts. Daily expenses should be a transaction account, and splurge and smile should be both two separate savings accounts. Your fire extinguisher account should be a totally different bank, to avoid the temptation of transferring it and spending it!
If you don’t know what you spend your money on, or where that $150 went last weekend, then it’s time to take notice! The Barefoot Bucket steps will help you sort out your finances and help you gain some control of what money goes where.
I truly believe that if we want to increase our wealth, we have to shift our mindset. If your mindset is “poor”, you will continue to feel poor no matter how much money you have, and you will keep attracting the same situations that reflect your mindset. Think rich and you will feel rich and attract wealth. Love and appreciate what you have, even if it’s a beat-up old car and not a Bentley (yet!). This will allow you to be open and receptive to abundance.
Easier said than done, right? It can be done. If I can do it from the poor mindset I grew up with, anyone can do it. My grandparents came to Australia in the ’60s and since they grew up poor, they passed these poverty beliefs down to my parents, and down to me. I guarantee you that a bucket load of families have a similar story.
Emotions like guilt, anger, fear or sadness may come up as you start changing your mindset, that’s okay, it’s all a part of the process. It’s about being aware and realizing that it’s an old belief that probably comes from our childhood. So start reading books on wealth and success and make the choice to change your mindset.