Goal-Based Buckets: Give every dollar a job. Put that dollar in the right bucket. Stop guessing.
Most people mismanage their money because they juggle too many priorities at once without a clear plan. They’ve got a 401(k) over here, a checking account over there, maybe a brokerage account “for extra investing”, but no clear connection between where the dollars are sitting and what those dollars are actually for. For this week’s Money Map Monday, we’re going to fix that with a simple framework I use in my personal wealth design plans: Goal-Based Buckets.
What Are Goal-Based Buckets?
“Goal-based buckets” is just a fancy way of saying: Organize your money by purpose and time horizon, not just by account type.
Instead of thinking in terms of “checking, savings, 401(k), Roth,” you think in terms of:
Money for now
Money for soon
Money for later
Each “bucket” has:
A clear goal
A target balance
A time horizon
An appropriate investment or savings strategy
This is personal wealth design in action: aligning your money with your financial goals, instead of letting it collect dust in random accounts.
Step 1: Get Clear on Your Big 3
Before we build buckets, we need goals.
Take five minutes and write down your top 3 financial goals over the next 1–15+ years. For example:
Build a 6-month emergency fund
Buy a home in 3–5 years
Hit work-optional or full retirement by age 60
Fund kids’ college
Start or expand a business
You don’t need every detail right now. Just a short list and rough timelines. Those timelines are what drop your goals into the right buckets.
Step 2: Build Your 3 Core Buckets
Think of this as your Money Map: three big destinations, with different rules.
Bucket 1: Now Money (0–24 Months)
This is your “now” bucket. Its job is to protect your lifestyle and keep you out of panic mode.
What goes here:
Emergency fund (typically 6-12 months of baseline expenses; more if your income is volatile)
Short-term known expenses:
Insurance premiums
Property taxes
Vacations in the next year or two
Small home or car repairs you know are coming
Typical fund vehicles:
Checking for monthly spending
High-yield savings for emergency + short-term reserves
Maybe a short-term CD or money market account
Key rule:
This bucket is not about squeezing out every last bit of return. It’s about sleep-well-at-night money. If you’re constantly dipping into long-term investments to cover short-term surprises, this bucket probably isn’t big enough or you need to adjust your budget.
Bucket 2: Soon Money (2–10 Years)
This is your flexibility bucket. It funds goals that are important but not immediate.
What goes here:
Down payment for a home in 3–5 years
Major home remodel
Starting or buying a business
Kids’ education if they’re within a decade of enrollment
Big lifestyle upgrades (boat, vacation home, extended vacay)
Typical vehicles:
Conservative to moderate investment accounts
A blend of:
Cash and short-term bonds (for stability)
Some stock exposure (for growth over multi-year periods)
Key rule:
You can’t afford to gamble here, but you also don’t want this money just sitting in cash losing purchasing power, or short-changing your goals for 5–10 years. Think measured risk to meet your goals, not all-or-nothing.
Bucket 3: Later Money (10+ Years)
This is your freedom bucket. It’s designed to support you when work becomes optional (or stops entirely).
What goes here:
Retirement accounts (401(k), 403(b), 457, IRAs)
Roth accounts
Long-term taxable investment accounts
Any assets earmarked for “future you” 10+ years down the road
Typical vehicles:
Growth-oriented investment portfolios:
Higher stock allocation
Long-term focus
Tax-smart strategies:
Using tax-deferred vs. Roth vs. taxable intentionally
Aligning investments with the tax treatment of the account
Key rule:
This is where you can accept more volatility because your time horizon is longer. The biggest mistake I see is people are not aggressive enough in their retirement accounts while they are still decades away from retirement.
Step 3: Add the “Tax Bucket” Overlay
Here’s where my CPA + advisor strategy kicks in.
On top of your time-based buckets (Now / Soon / Later), you also have tax buckets:
Taxable (brokerage, bank accounts)
Tax-deferred (traditional 401(k)/IRA, SEP, SIMPLE)
Tax-free (Roth IRA/401(k), HSA if used strategically)
A strong personal wealth design plan doesn’t just ask: “Do I have the right buckets for my goals?”
It also asks: “Are these dollars in the right type of account to manage my lifetime tax bill?”
For example:
Short-term “Now Money” usually lives in taxable accounts (you need access without penalties)
Long-term “Later Money” often leans heavily on tax-deferred and tax-free accounts
Strategic use of Roth and HSA can create powerful “future tax-free” buckets for your later years
Same goals, better tax positioning. That’s where real long-term efficiency shows up.
Step 4: Setting up your buckets
This is where most people get stuck. The idea makes sense but sometimes it doesn’t materialize because people have busy lives and may not have the time to work through the process.
Here’s a simple roadmap to implement setting up your buckets.
Name the accounts
“AVL Family Emergency Fund”
“2029 Home Down Payment”
“Lifetime Freedom Fund”
Renaming accounts in your online banking/investment platforms makes the purpose unavoidable.
2. Assign Targets
Now Bucket: “I want 6 months of expenses = $30,000”
Soon Bucket: “I want $100,000 for a down payment”
Later Bucket: “I want $X by age 60 based on my retirement plan”
3. Automate contributions
Direct deposits to checking and savings
Monthly transfers to “Soon” accounts
Percentage-of-income contributions to “Later” (401(k), IRA, etc.)
4. Set funding order
A common sequence:
Build emergency fund
Capture employer match in retirement plans
Pay off high-interest debt
Fund “Soon” goals
Increase long-term investing
You don’t need to make it perfect. You just need each dollar to know where it’s going and why.
Step 5: Your Money Map Monday Check-In
Once your buckets are set up, Money Map Monday becomes a quick review instead of a crisis meeting.
Each week (or at least once a month):
Check balances in each bucket
Confirm transfers are happening as planned
Ask:
“Does anything about my goals or time horizons need to change?”
“Is any dollar sitting in the wrong place?”
Think of it like maintaining a garden. You’re pruning, not replanting the entire thing every week.
Bringing It Back to Personal Wealth Design
Goal-Based Buckets are one of the core tools inside my personal wealth design plans because they:
Reduce anxiety (“I know where my next 6 months of expenses are coming from.”)
Improve decision-making (“I can take some risk in my Later bucket because my Now bucket is solid.”)
Create alignment (“My money, my taxes, and my timeline are finally working together.”)
If you’re a high earner juggling multiple goals and feeling like your accounts are just scattered, this is where I recommend starting.
Want Help Designing Your Buckets?
If you’d like a second set of eyes on your current setup, or you’re not sure how to align your buckets with your tax strategy and long-term plan, this is exactly what I do for clients.
We’ll:
Clarify your top goals
Map each goal to a time horizon and bucket
Layer in tax strategy so you’re not just growing wealth, you’re keeping more of it
If that sounds like the kind of structure you’ve been missing, reach out and we’ll talk about what a personal wealth design session could look like for you.
