Welcome to Week 5 of my Wise Money Blog series!
In this series, I share with you many of the secrets and systems my students are acquiring in my signature wealth-building course, Wise Money CURBS.
CURBS is THE fundamental financial framework that I’ve developed over the years, and it forms the backbone of the wealth-building techniques I have used to generate millions of dollars of net worth.
These blogs reveal the key takeaways from my live-coaching session called “Office Hours,” where I personally answer the students’ questions and guide them on their path to building wealth.
In last week’s Blog 4 (R for Ratio), I shared with you The Millionaire Formula, which I personally use to have achieved financial freedom and also teach my students to earn millions.
Today, I’m going to dive into “B” in CURBS, which stands for Bucketing. (Click here to read the first 4 blogs in the series.)
What would you say if I told you, “CURBS requires you to SPEND 100% of your money on your good life –and, no budgeting”?
You’d probably say, “How is SPENDING all my money going to make me a millionaire?”
Well, here’s how!
Bucketing is the practice of strategically dividing your money into specific accounts every time you receive a paycheck, instead of just dumping it into your single household checking account. It is critically important to separate your money into different accounts.
Bucketing enables you to spend 100% of your money on your goodlife without the need for budgeting.
When you place all of your money into one household account, there is no doubt that you will spend all of the money in that account.
Your lifestyle will eat up every dollar leaving you nothing left over for “future-selfing.”
That’s just the way it works, and Parkinson’s Law of Money explains why.
This law states that your expenses will always rise to match your income, meaning you’ll always end up spending everything that’s available to you. And, with easy credit available these days, you’re more likely to spend even more than what you earn, eventually leading to unwanted debt.
In other words, your expenses increase in proportion to your earnings. Every pay raise or bonus means you live a little better, usually stretching even beyond your means.
Stretching on a low income might mean taking on a small amount of debt. But the more money you make, the more debt you have access to, ergo the higher your income, the greater your debt.
And, once the majority of your income goes to debt payments – like a high mortgage, one or two luxury car payments, and credit card payments – you’ll see that your entire check goes to cover the cost of your expensive lifestyle.
This puts you on the living paycheck-to-paycheck hamster wheel.
The Wise Money Method works because it’s a system that subverts Parkinson’s Law to get you off the hamster wheel.
The idea is – you can’t spend what you don’t have – therefore, we move the monies out of the single household account and deposit (sweep) them into the accounts allocated for other important areas of life, your buckets.
By regularly sweeping into your buckets – investment bucket, wellness bucket, rainy day bucket, and dreams bucket – you can effectively (and excitingly) manage your financial life for growth!
One important bucket that I prioritize and that’s not included in other bucketing strategies is your Wellness Bucket.
Investing in YOU (your health and wellness) is a top priority. Your health is a crucial aspect of your financial success.
So, wellness-related expenses go way beyond helping you feel good. Your wellness is essential to your earning. Take it from me, you have to be healthy to be happy and to build wealth.
That’s why your wellness bucket includes things like chiropractic, acupuncture, massage, peptides, hormones, supplements, coaches, and personal trainers because these are investments in your well-being.
The Wise Money Bucketing Method of CURBS is a prescriptive percentage-based system for moving 100% of your income into the respective CURBS buckets.
This is how you joyfully spend all of your money on what matters – not wastefully spending it on what doesn’t.
And this, my friends, is where your financial situation begins to thrive! This is where YOU begin to build wealth.
You will use the 20-80-20 (Millionaire Formula) as a model for how much to move into each bucket. By employing the concept of bucketing and using the 20-80-20 Ratio, you ensure you don’t fall victim to Parkinson’s Law and instead start to build savings and build wealth.
Oh, one final thing that I have to share: the ONLY way to effectively and consistently do this practice is to have a tool and system for doing so.
I have seen many people try to do it in their head or even within the same household account. They can’t.
Therefore, I teach my students exactly how to use Quickbooks using the CURBS chart of accounts to manage their money using the 20-80-20 and Bucketing system.
There is no better time than now to begin your wealth-building journey. It all begins with CURBS!
Click here to schedule your Money Story Call, a 30-minute chat with a Wise Money Coach to share your money story and hear how we can help you on your wealth-building journey.