What we'll cover
What the spending buckets feature is
Reasons to use spending buckets
Incorporating spending buckets into your finances
When it comes to your spending habits, how close of an eye do you really keep on where your money is going? Sure, you know how much your monthly rent is, but are you tracking how much you spend on groceries or pet supplies? If you don’t know where to start or have found it hard to stick to a budget in the past, it might be time for a new approach. Getting a firm grasp on your day-to-day costs might feel intimidating, but with the right tools, it doesn’t have to be.
We’ve introduced spending buckets to Ally Bank's Spending Account for precisely that reason. This new tool was designed to help you take control of how you use your money by tracking where you use your money.
What are spending buckets?
Think of spending buckets as a digital equivalent of using the envelope budgeting method. For a start, they allow you to set aside funds in your checking account for particular expenses, such as rent, groceries or entertainment.
Buckets go a step further than a paper envelope by helping you organize and optimize your spending. Don’t worry, it’s not another app you have to learn. This simple tool takes the guesswork out of your spending, enabling you to see and manage exactly how much money you put toward different expenses. From there, you can make adjustments and change your goals accordingly. Here’s how you can get started:
Step one: First, pick an area of spending that’s important to you and designate a bucket for it. For instance, groceries or mortgage/rent.
Tip: Spending buckets work best with debit card transactions and direct withdrawals from your checking account.
Step two: Decide how much you want to spend and when you need the money. Look at your typical spending pattern (it’s okay if there’s a little guesswork involved!) to decide how much money to put in that bucket and determine when you’ll need it based on the bill's due date.
You decide how many buckets you create (you can create up to 30) — but don’t feel like you have to account for every dollar you spend (unless you want to). You might start with a few buckets for recurring expenses, like your rent or mortgage and your groceries.
Step three: Once you’ve made your selections or set your automations, you’ll be able to see any unbucketed funds you have leftover. From there, you can decide to spend or save that unbucketed amount in an Ally Bank Savings Account. Keep in mind, automating your spending buckets helps organize your expenses, but you’ll still need to set up your bill payments with any vendors as you normally would.
If you’re stressed about estimating correctly, we’ve got you. We know life happens, and sometimes you might spend more than you have in a bucket. As long as you have the money in your account, the transaction will still go through. We’ll distribute money from your unbucketed balance to the bucket you overspent. If you don’t have enough money there, we’ll begin taking money from other buckets, starting with the one you’ll spend from last.
Tip: If you prefer, you can manually fill the buckets when money comes into your account, but we’re big fans of automating finances when possible (it can help give your savings a boost).
Why spending buckets?
We asked our customers what their biggest money pain points were. They told us they were struggling to create a budget (and stick to it). In fact, according to our survey, 65% of consumers have no idea how much they spent in the past month. Knowledge is power, so it’s important to know where your money is going. Spending buckets make it easier.
Buckets simplify spending and help you avoid spending money needed for necessary expenses like your cell phone bill or gas for your car by allowing you to set that money aside ahead of time — and by letting you to select which vendors pull from which bucket. You don’t need multiple accounts or complicated spreadsheets to stay on top of your spending. Buckets are an easy-to-use, flexible tool to give you clarity about your spending and empower you to make informed decisions about how you spend your hard-earned money.
Buckets simplify spending and help you avoid spending money needed for necessary expenses by allowing you to set that money aside ahead of time.
3 ways to use your spending buckets
Keeping your spending in check can be a challenge. You can use spending buckets any number of ways to make money management easier and more successful. As you find your fit, give these tips a try:
1. Spend with less stress
With buckets, the dollars you allocate are all accounted for, meaning you don’t have to worry about using money that’s needed for an earmarked expense. Splurge on dessert at your next dinner out with peace of mind that money for your bills is already set aside.
2. Analyze your budget for overspending
Once you start putting money into buckets, you might realize a lot more money is going toward a certain expense than you had thought. For instance, you might notice your weekly grocery trip costs more than you’re comfortable with. From there, you might decide to cut down on other spending to accommodate it or find ways to reduce your spending in that category, like cutting coupons or comparison shopping.
3. Customize your budget
Spending buckets are free and flexible as part of Ally Bank's Spending Account, so you can use them in a way that works best for you and your goals. You can create up to 30 buckets, so choose the number of buckets that work for you. Add or remove buckets as your plans change. You can move individual transactions from one bucket to another. For example, if a recent purchase at the grocery store fits into your home improvement bucket, you can move that transaction to reflect that.
Simple and sustainable spending with buckets
Staying on track with your spending can be overwhelming. But the process doesn’t have to be complicated. Spending buckets enable a hands-off approach that makes managing your money easy. With buckets, you can easily track how much you’re spending on different expenses and get the information you need to make the right moves for your financial future.
