Your Short-Term Bucket

We’ve talked about dividing up your future financial needs into 3 Buckets: Short-Term, Mid-Range, and Long-Term. Your assignment was to write out a list of expected financial obligations that will occur in the future, and then group these obligations into these 3 Buckets.

The goal for this assignment is to attempt to actually prepare for the future instead of constantly reacting to the present. Wouldn’t it be cool if when that car of yours needs replacing or your daughter needs braces that you actually have money set aside that you can pay cash for it rather than trying to figure out which of your wallet-full of credit cards has enough room on it?

By the way, having this plan in place and getting your Buckets fully filled is called “Financial Security” – and it’s very, very nice when you get there. And you CAN get there, regardless of where you are in your financial life right now.

Let’s Get the Short-Term Bucket Filled, Shall We?

Okay, your short-term Bucket, by definition, consists of any significant expenses coming up in the next year. Things like:

• Replacing a vehicle
• Dental procedures
• House repairs
• Down payment on a house?
• Vacation
• Season Tickets to your favorite sports team
• 6 months of salary (an absolute MUST!)

Put a dollar amount on these items – that’s your Short-Term Bucket list. I don’t care what you put on the list – it’s YOUR list – but we need a dollar amount to shoot for. Because that’s how we’ll know when the Bucket is full.

Maybe you currently have absolutely zero money in savings right now. That’s actually NOT unusual at all, so don’t beat yourself up. Well, okay, beat yourself up a little, but then get over it.

If you find you need some help getting started, check out some of these articles on this website: “Get $500 In The Bank Now!”, “How To Get $500 In The Bank – FAST!”, “Need Cash? Try an “Income Blitz””. These articles will link with other similar articles, and you can learn how to jumpstart your savings plan.

Getting Specific

Your savings vehicle for your Short-Term Bucket is going to consist of:

• Cash under the mattress (Hey, some people LIKE having cash around – and that’s okay. If you have it, it’s part of your Short-Term Bucket.)
• Savings & Checking Account
• Vacation Savings Account
• Money Market Account
• Short-Term Certificates of Deposit

These vehicles are readily available to you – easily accessible for those short-term needs – and NOT susceptible to market ups and downs. And this is where you get the money to pay for those Short-Term items on your list.

Time For Tough Love

You put a lot of “needs” on your short-term list, and the amount of money you have filling this Bucket isn’t going to cover all of them. Right? Like, maybe you “need” a new car, or you promised your kids a Wally World vacation this summer, and if you don’t renew your season tickets this year you’re going to lose your seats – forever!

Awww… Choices. Aren’t they fun? Are you going to keep spending money you don’t have? Or are you going to reach for “Financial Security”? That’s what you’re facing right now. If your Short-Term Bucket doesn’t supply your every Short-Term “Need”, you’ve got to cut down on what you think a “Need” is.

For example, you don’t NEED a NEW car – nobody does. What you NEED is transportation. You can find a cheap used car, you can ride mass transit, you can borrow Mom’s old Crown Victoria for awhile. The NEED is to be able to get back and forth – the DESIRE is to maintain some sort of “status” with the friends and co-workers. You simply may not be able to afford your DESIRES right now.

Fill the Short-Term Bucket, but do it without neglecting your other two Buckets. (See “How Do You Fill the 3 Buckets?”)

Related Articles:

• The Future is NOW! A further explanation of Your 3 Financial Buckets
• Two Long-Term Bucket Vehicles to Start With
• The Long-Term Bucket
• How Do You Fill the 3 Buckets?
• S.P.F. Your Debt – A Formula to Pay Off Your Debts Without Getting Burned