Barefoot Investor Buckets Calculator

The percentages are meant to be applied to your after-tax income (i.e., what lands in your bank account each pay day).

This is where all this talk of buckets can get a bit confusing!

If we go back to the start, all your income first lands in your Blow bucket. None of your after-tax income lands directly in your Mojo or Grow accounts.

So how does money get into your Mojo or Grow accounts? It comes via the Fire Extinguisher account within your Blow bucket.

For example, when you're up to Step 6 of the Barefoot Steps, you'll be using the Fire Extinguisher funds to boost your Mojo account to three months of living expenses. Similarly, if an emergency comes up and you use all the money in your Mojo account, then you'll use the Fire Extinguisher on your next pay day to top up your Mojo account again.

That's why there's no specific allocation each pay day towards your Mojo or Grow accounts in our calculator - it all comes via the Fire Extinguisher account.

The Barefoot Investor recommends getting $2,000 into your Mojo account as the priority when setting up your buckets.

Once you've got a bit of Mojo, then you can start working through the Barefoot Steps where step 2 is paying off your debts such as credit cards.

In the Barefoot Investor's own words, "the idea behind putting 20% of your income into the ‘Fire Extinguisher’ bucket is so you can use it to fight financial fires that keep you up at night". It's essentially the money for achieving each Barefoot Step, such as saving up your first $2,000 in your "Mojo" account, paying off your debts, saving up a house deposit, and so on.

What you use the "Fire Extinguisher" funds for on your next pay day depends on which Barefoot Step you're up to. Our Barefoot Investor Buckets Calculator automatically identifies how the "Fire Extinguisher" funds should be used each pay day based on the inputs you provide and the sequence outlined in the Barefoot Steps.

When Barefoot Investor says "living expenses", he's simply meaning the amount you're spending from your "Blow" bucket, such as rent, groceries, electricity, etc.

For example, if you're spending $5,000 per month from your "Blow" bucket, then three months of living expenses would be $15,000 and that's your goal amount when Barefoot Investor says to "Boost Your Mojo to Three Months" in step 6 in the Barefoot Steps.

No, you're not supposed to be paying your regular bills from your Mojo account (as Barefoot points out in a recent article).

You may need to use your Mojo funds to pay for an unexpected bill in an emergency (e.g., car accident), but you're not meant to need it for everyday bills as they should be fully covered by your "Blow" bucket.

The Barefoot Investor tackled this question in a recent article where he pointed out that "you either need to earn more money – by getting a raise, or taking a second job, or both – or you need to think long and hard about whether you can afford the house".

Ultimately, the Barefoot Investor buckets aren't a magical solution to your problems. If your spending doesn't fit the percentages, then you have to figure out what you're going to do about it (i.e., earn more, or spend less). Until you work that out, you can still use the buckets approach, but you'll have to customise the percentages to reflect your current spending.