Step 6 – Decide how you’ll transact on the ‘bucket’ accounts

Cash, debit and credit cards.

Budgets are a moment in time and a starting point. Money Management is about developing a system that provides feedback loops, so that it’s simpler to stick to your cash flow goals.

Below is an overview of the Money Management System we recommend.

The most common set up of our Money Management system is with three offset accounts as follows: 

1. ‘Grow’ offset

All income is credited into this account.

All fixed expenses including loan repayments, direct debits and typically major expenses are included.

Which card?

This account should have no ATM access.

You don’t want someone peering over your shoulder at the ATM seeing that you have hundreds of thousands of dollars in your ‘Grow’ offset! You’ll need to have a clear understanding of your major annual expenses so that they are accounted for as part of determining your ‘Money Goals’.

This will empower you to determine what you can afford to transfer each month into your ‘Life’ offset and your ‘Fun’ offset, as these two accounts pay for your variable expenses and your good times!  Your ’Grow’ account is the account that you want to see increasing each month.

It’s effectively your old-fashioned savings account.

The time-consuming aspects of setting up this account include:

  •         Ensuring all your direct debits are coming from this account.
  •         Budgeting for all major expenses that occur less regularly than monthly across a year.

The Property Planners’ money tip – Track your ongoing expenses that occur at differing intervals throughout the year

You should separate your ‘Grow’ account onto its own tab in your Money Management spreadsheet, and outline the expenses that occur monthly, bi-monthly, quarterly, half yearly, annually or randomly if any do so. This is an important part of the process to ensure that you capture everything that you want to pay for from your ‘Grow’ account. This also ensures that your ‘Money Goal’ is realistic.

Once you’ve completed this phase, you’re in a position to determine and assess your monthly budget for your ‘Life’ offset. 

2. ‘Life’ offset

At the start of each month you’ll transfer a set amount from ‘Grow’ into your ‘Life’ offset account to cover variable necessity-based expenses. As with each account, what you choose to include should be decided and discussed by yourself and your partner (where applicable).

As we are all unique and have varying interests, the Life, Grow and Fun account will include varying categories for each person or couple. Some may include an item in the ‘Life’ offset that others would include in the ‘Fun’ offset. That’s ok, this is your personal finances and it needs to work for you!

Which card?

For this account we recommend linking either a credit card or debit card.

If you are using a credit card, pay it off in full on the first day of the new month from the ‘Life’ account. Do not pay off a credit card on the random date set by the lender that changes every 55 days. Don’t partly pay if off either!

The credit card manufacturers intend for the direct debits to confuse your spending habits so that you’ll pay random interest or late payment fees throughout the year.  This often ends up costing you more than the benefit of any frequent flyer points!

Many institutions will not even let you set up a direct debit for the first day of the month on credit cards.

It’s vital that you can accurately track your monthly spending.

If you have a shortfall, you’ll need to dip into your ‘Grow’ account. If you have a surplus, well done, you have spent less than you budgeted for. Be sure you celebrate these wins each month!

3. ‘Fun’ offset

At the start of each month transfer your budgeted amount from your ‘Grow’ into your ‘Fun’ account.

This incorporates the good stuff, your discretionary based spending such as; eating out, takeaway, entertainment, sport, coffee, alcohol, gifts, parties, magazine subscriptions, club memberships, special treats and babysitting. 

Which card?

For this account, we recommend using a debit card or better yet, take a set amount of cash out from the ATM for the week, fortnight or month and physically hand it over to pay for your ‘Fun’ items. This way you’ll get direct feedback on what you have in your wallet as you spend your hard earned cash.

This could make the pain and self-awareness a little stronger when you physically see how much money you ‘invested’ after a night out with friends! It could also increase your popularity when it comes to splitting the bill after eating out with friends!

The Property Planner’s Money Tip – Put a sticker on your ‘Life’ and ‘Fun’ cards so you’ll select the right account!

To help ensure you use the correct card for the appropriate bucket account, why not place a label-maker sticker saying ‘Life’ and ‘Fun’ on your respective cards? As you get used to the system, you’ll inevitably pay for expenses from the wrong account. This can cause frustration when reconciling the monthly expenditure. Using stickers, or better yet, cash for the ‘Fun’ account, you’ll minimise any likelihood of errors occurring.

You may like to place the sticker over the brand name of the card provider so you can keep the corporation faceless!

These stickers will save you time each month when you review your spending and record what was spent from each account, and importantly, how much extra you saved in your ‘Grow’ account!


Contact us today to book in a free confidential property planning, strategic mortgage broking, money management or property select meeting.

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