Step 2 – Set up Your Buckets – #barefootsakurachallenge
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With Step 1 – We scheduled the monthly barefoot date night, now we are ready to move to Step 2 – Set up Your Buckets.
According to Scott Pape from the Barefoot Investor in this section, he goes on to explain that within “half an hour’s work you’re going to save yourself $515 over the next year – and thousands of dollars over the next decade – by banishing bank fees from your life forever.”
You are going to set up accounts that will form the backbone of the Barefoot Investor strategy, and this will allow you to automate your day-to-day finances to the point that it will take around 10 minutes a week to manage.
The Barefoot Investor‘s Zero-Fee Everyday Transaction Account is:
Drum roll, please…
ING Orange Everyday Account
This account is straight forward to setup, and the whole setup can be done via your mobile phone. You can click this link here and get started, and if you use the promo code XQH261, you will get $100 if you sign up before 31st July 2017.
Scott wants you to set up two ING Orange Everday Accounts and nickname one the ‘Daily Expense’ and the second one ‘Splurge’. These nicknames will be all explained in later steps, so please don’t freak out on the names, I kind of like them.
The reason why Scott chose “the ING Orange Everyday account is because it has zero fees. As in none. Not even foreign ATM fees. (And that adds up. According to RateCity, ‘two in every five ATM transactions are made at a machine not owned by the customer’s bank network.’)
The downside? Well, into one of the accounts (make it ‘Daily Expenses’) you need to deposit $1000 every month (your wage, for example, which is easy).”
You will also need to set up two ING Savings Maximiser accounts and nickname one ‘Smile’ and the second one ‘Fire Extinguisher.’
I know the names are getting crazier, but all will be revealed in later blog posts.
The final step for Step 2 – Set up Your Buckets is that you should have one bank account completely separate from your day-to-day banking.
Scott highly recommends establishing an account called a UBank Usaver, and this is a NAB ‘Jetstar brand. You can click the link here and start setting this up on your mobile phone in 15min or so
Nickname this bank account ‘Mojo’.
The reason you are setting this account up according to Scott is, “it’s not an offset account. It’s not a redraw facility. It’s not shares. It’s cold hard cash in the bank. And it’s hard to access. You see, managing your money is about behaviour.
Most people shuffle money around from one account to another without ever actually saving any of it.”
When opening the Mojo account Scott would like you to set it up “with an initial $2000 deposit, And if you don’t have a spare $2000, look around your house and see what you can flog on Gumtree. He is deadly serious.”
Step 2 – Set up Your Buckets thoughts and hurdles
I was introduced to ING Direct when I was a 16 year old and when what’s his name… Billy Connolly was on all the TV commercials. I know for sure there will be a generation of kids reading this that will not know who Billy Connolly is, and if that is you check this video out.
Setting up the account wasn’t an issue as I already had multiple accounts set up with ING.
However, the biggest problem I had with setting up my ING Orange Everyday Account is that you can only have two accounts.
My girlfriend and I already have a joint ING Orange Everyday Account, and this is included in the two account total. I recently spoke with my ING Business Development Manager, and he said they are looking to increase it, but currently, you can only have two.
So I had to keep my ‘Splurge’ account with my other bank.
Setting up the ‘Mojo’ account wasn’t an issue, but I’m currently in the process of selling a whole bunch of stuff to get my $2000 deposit in my account.
The Barefoot Investor Challenge
Like any good challenge, I want other people to join in the conversation and for this challenge, I will use the #barefootsakurachallenge.
If you are someone that has read this book and wants to join in on this challenge feel free to comment and write any hurdles you faced while doing the challenge and don’t forget to use the #barefootsakurachallenge.
Or how about you
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