How to use spending and savings buckets to pay off debt
- May 8, 2023
- 3 min read
What spending and savings buckets are
The benefits of buckets
How to use buckets to manage debt
If you’re struggling with a credit card balance, student loans or any other type of debt, you may be feeling stuck. Getting out of debt can seem like a daunting task, but you can create a plan to tackle it one step at a time. Ally Bank’s spending and savings buckets are useful tools that can help you chip away at debt and head toward a brighter financial future.
Spending buckets are a feature of Ally Bank’s Spending Account . They function like digital envelopes, allowing you to separate your money for specific expenses.
You can create spending buckets for different expenses such as rent/mortgage, car payments, your credit card balance and groceries. You choose what each bucket is for and how much of your money you allocate to each expense. Have the funds automatically distributed each time you deposit money into your account or move them manually.
Ditch spreadsheets in favor of a more visual approach to budgeting. The first step is to decide how much money will go toward monthly expenses as well as any other expenses you want to keep track of with spending buckets . You can then see any unbucketed funds you have left over and decide what to do with that money.
You can create a customized spending system with buckets to simplify your money management, eliminating surprises and guesswork. Buckets help you visualize your expenses. Start small with a few buckets and add more as you need them.
Like spending buckets, savings buckets help you organize and separate your savings goals. Savings buckets are a feature of Ally Bank’s Savings Account .
Seeing your savings goals defined can be motivating. As your savings in each bucket add up, you’ll be that much more excited to make your dreams a reality. With savings buckets, you don’t need multiple accounts to save for different goals, and you’ll still earn interest on the total balance of your account.
When your money isn’t organized, it may feel difficult to find even one extra dollar to put toward your debt. Once your fixed expenses and savings goals are clearly designated, you can analyze your unbucketed money for missed opportunities hiding in plain sight. For instance, you might notice you’re spending way more at the grocery store than you thought. Or maybe you’ll see you’re close to hitting your goal for your kid’s college bucket, and you can now redirect some of that money toward your debt.
Using buckets together also empowers you to make shifts as your circumstances change. If your rent goes up, you may need to scale back on your debt payments. Or perhaps you’ll realize you’ve barely watched TV since summer started, so you’ll cut back on streaming services and increase your monthly credit card payment.
Want to start climbing out of debt but don’t know where to start? Buckets are a simple, sustainable solution to transform how you manage your money. Start using this valuable tool today to put your debt-busting plan in action.
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