How to use buckets in your Ally Bank Spending Account for everyday money management
How close of an eye do you really keep on where your money is going? When it comes to your spending, your regular payments, such as rent, may be simple to keep track of, but variable expenses, such as groceries, can be a little trickier.
With the right tools at your fingertips in your Ally Bank Spending Account, you can get a better grasp on the everyday expenses that go through your checking account.
Read more: How an Ally Bank Spending Account can simplify your finances
What are spending buckets?
Spending buckets are a tool built right into your Ally Bank Spending Account. Much like the savings buckets in the Ally Bank Savings Account, they allow you to allocate funds toward your regular expenses into different buckets, taking the guesswork (not to mention the spreadsheets and multiple apps) out of budgeting. Think of them as a digital version of the envelope budgeting method, but everything’s neatly kept right within your checking account.
How to use your spending buckets
Here are three simple steps to get you started.
1. Categorize your areas of spending and create buckets for each
Look at the regular expenses that come out of your checking account (as in debit card transactions and direct withdrawals) and categorize them. You’ll likely find categories like rent/mortgage, utilities, groceries and credit card bills.
Log into your Ally Bank Spending Account. From your dashboard, you can start setting up buckets for each of those categories.
Tip: Tag different merchants to automatically pull from the correct bucket. For instance, tag your usual grocery store, so those expenses are drawn from your “Groceries” bucket.
Think of spending buckets as a digital version of the envelope budgeting method but everything’s neatly kept right within your checking account.
2. Decide how much to allocate to each bucket and when you’ll need the money
Set ballpark figures for how much money you’ll need for each bucket. For areas that vary, such as groceries, you can get a general sense of how much you typically spend by looking back a few months. For example:
Rent/mortgage: $2,000/month
Groceries: $360/month
Utilities: $500/month
Credit card payment: $200/month
Debt payments: $1,200/month
From there, you can set up when you’ll need the money (for instance, based on the due date of a utility or credit card bill). Rent/mortgage is typically a fixed, recurring amount, making it an easy bucket to start with.
3. Fund your spending buckets
Fund your buckets the way that works best for you. You can fund your buckets manually, or you can automate based on a suitable schedule. For example, if you get paid every other Thursday, you can set your buckets to be funded automatically the following day.
And if you spend more than you’ve added to a bucket? No worries — as long as there’s enough total funds in your checking account (in or outside of a bucket), the transaction will go through.
First, we’ll prioritize using any unbucketed funds to satisfy the excess amount
After that, we’ll look to funds from other buckets, starting with those with no attached due date before moving to those with due dates that are furthest out
Keep in mind, spending buckets help organize your expenses, but you’ll still need to set up bill payments with any vendors as you normally would.
Tip: Once you have a handle on all your regular expenses, you can also set up recurring transfers into an Ally Bank Savings Account and start automating your future goals, too.
Optimize your spending buckets
You can use spending buckets any number of ways to make money management easier and more successful.
Customize your budget to spend with less stress
With buckets, the money you need for your bills is already accounted for, meaning you don’t have to worry about dipping into funds that are needed for an earmarked expense (as long as you’re pulling any extra expenses from your “unbucketed” funds). You can create up to 30 buckets, so choose the number of buckets that work for you.
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, maybe your weekly grocery trip is costing more than you’re comfortable with. To accommodate, you might decide to cut down on other spending or find ways to reduce your spending in that category, such as using coupons, comparison shopping or swapping brands.
Simple and sustainable spending with buckets
Staying on track with your budget doesn’t have to be complicated. 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.
