Women’s earning potential continues to rise. One indication of this financial success is more than a third of American women today are now the family breadwinner.

Overall, this is a triumph, yet in today’s economy money problems worry women more than ever before. Studies show that women are uneasy about financial management. Do you empathize with this challenge? Are you facing a similar situation?

The good news is it doesn’t have to be this way. By arranging personal finances into a system of four “buckets” – expense, investment, reserve, and giving bucket – anyone can experience peace of mind and achieve financial success.


Bucket OneOperating

This is your general “home base” account to deposit all incoming revenue, and from which you can withdraw funds for day-to-day expenses.


By setting up your online banking so that a percentage of disposable income can be withdrawn from your Operating Bucket, you will be able to deposit monthly allotments into the three additional buckets listed below. After disbursing funds to Buckets two, three, and four, aim to have 70 percent or less of your disposable income available in the Operating Bucket to pay for expenditures and expenses.


Bucket TwoInvestment

If you can regularly set aside 10 percent of your income for the purpose of investing, you will develop a fund that builds working capital. In other words, this money isn’t a long-term savings to counteract foreseeable money problems. Instead, this account is intended to be carefully invested so you can generate new income and build wealth.


However, a type of investment meant for long-term financial gains is found in retirement funds. Aside from having a 401k, women are wise to explore other investment opportunities, like annuities and bonds, which can provide income in years post-employment.


Bucket ThreeReserve

It’s ideal for this bucket to receive 10 percent of your monthly income as well. This account is available for urgent matters like out-of-the-ordinary medical expenses or a job loss. You may want try collecting 3-6 times your monthly income in this bucket so that when money problems arise, you’ll have a reserve from which to draw.


In addition, when configuring how much money you want to reserve, try to be conscientious of your retirement needs. There are many different schools of thought on how much a person needs to retire comfortably. This number is unique to your lifestyle and medical needs. By setting a financial goal for retirement, you can begin building your future today.


Bucket Four –  Giving Back

The final bucket is set up to fund donations, as in making a tax detectable contribution to local charities, international aid organizations, and/or your place of worship. Transferring approximately 10 percent of your disposable income to this bucket allows you to give and monitor money going to philanthropic purposes. This bucket is optional, but included because many women agree that making generous contributions brings great return.


By adopting the “Bucket Banking Strategy,” created by financial coach, Frederick W. James, women today, of all ages, incomes, and backgrounds, can create an outstanding, stress-free financial future for themselves.