Most people get into financial trouble when the unexpected happens. This may be health related, weather related, or job related. Whatever the reason, you need to plan for the unknown by filling your buckets.

Savings buckets can fall into two broad categories; regular expenses such as mortgage, utilities, food, or irregular such as car repairs, home repairs, taxes, or vacation. Online banking makes it very easy to fund your savings buckets. Most do not have large minimum balance requirements or monthly fees.

I feel that you should have 3 months accumulated in your regular expenses bucket. This amount will give you a decent cushion should something unexpected happen. As far as the irregular expenses go, you may want to set up a few smaller buckets, pails if you wish. One savings pail may be for vacations, one may be for property and federal income taxes. Since we are in the beginning of hurricane season, you may want yet another bucket just for weather related disasters. You might fund this bucket for such needs as insurance deductibles, a hotel stay if you have to leave your home, or boarding pets. Think about the last time there was an emergency and use those expenses as a base for how much to keep in these buckets.

If you have filled your buckets, then you will have the peace of mind to handle any unexpected emergency. You will be able to pay cash to handle things and not have to incur any credit card debt. So fill your savings buckets and cross that worry off your list.