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Smile account (10%) that is used for saving up for longer-term delayed gratification on things like holidays or a new car.This bucket is for deliberate spending – Scott Pape breaks this down further into two separate accounts or ‘buckets. It provides a financial safety net so you don’t have to borrow money if something happens to you or your family.” Blow (20%) This could be car repairs, unexpected travel or an urgent medical bill. “An emergency fund is money you save to cover urgent or unexpected costs. This is where your FIRE investment would come from! Scott recommends initially using your savings to fuel a ‘Fire extinguisher account’ for putting out financial fires such as personal debts, and once you are debt-free to then direct this toward boosting your emergency fund even further. This is the portion of your income that is used for long-term savings – for things like buying a home, paying off your mortgage quicker, boosting your superannuation, and buying shares. Utilities (power, gas, water, internet, phone): 5-10%.The Barefoot Investor budget suggests the following breakdown This bucket is for all your everyday recurring ‘baseline’ expenses, including bills, rent or mortgage, groceries, transport, etc. ![]() It’s important to know how much you need to allocate to certain living expenses – online budgeting tools can help you with this. ![]()
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