Personal Capital: Effortless Budgeting & Goal Tracking | Money Coaching Insights

As a money coach, one of the first things people ask me about is budgeting strategy. There are so many different types of budgeting apps and methods out there — it can get really overwhelming.

A few years ago, after feeling exhausted by tracking my spending through countless spreadsheets, I created a budgeting method called the Three Bucket Budget.The Three Bucket Budget is a simplified system that helps track your expenses, goals, and everything else. They were crucial to being able to reach my goal to save $100K by age 25.

The Three Bucket Budget — used alongside Personal Capital’s user dashboard — can help you gauge how you’re performing in each of the budget buckets. Here’s a breakdown of how my budgeting plan works.

Bucket One: All The Adulting Expenses You Can’t Escape From

This money is for the expenses in your life that you need to eat, live, breathe and ALL things survival. Think monthly rent, grocery expenses, utilities, and insurance payments when you’re creating your expense budget. Loan and credit card payments belong in this category too.

Bucket Two: Big Life Goals

I take my “big money” life goals very seriously. These goals range from making sure I have 3-6 months worth of expenses saved in an emergency fund, debt-pay off, and investing for retirement.

Once those initial categories are taken care of, you can start thinking about other big life goals such as how you are going to save for a downpayment for a house.

You could contribute to some of these goals by setting up automatic money transfers from your checking account into the appropriate savings accounts. I recommend using a high yield savings account or cash account like Personal Capital Cash. If your employer offers a retirement plan, it would be wise to opt in a contribution per paycheck. This not only puts the money away on autopilot but your employer may offer some sort of contribution match. Who says no to free money?

If you don’t have a retirement plan at work, there are still plenty of options, like traditional IRAs, SEP IRAs (if you’re a side hustler or self-employed), and Roth IRA’s.

Bucket Three: Fun Money

The last bucket is for fun spending — aka your Netflix subscription, dinners out, and Weird Al tickets. Spending doesn’t mean deprivation. There are certain things in life that bring us true joy and happiness. For example, I really enjoy spending money on food, travel, and nesting. So long as I’m contributing money into my other two buckets, I feel guilt-free spending on these last few items.

Have a Visual Goal and You are More Likely to Achieve It

Personal Capital is a key player in my budgeting methods. I used Personal Capital daily during my journey to save my first $100K. It kept me on track and motivated me by giving a visual representation that showed me that my goal could be a reality.

The Personal Capital dashboard makes looking at spending habits easy and intuitive. First, you link all your accounts to the tool (including any investment or retirement accounts). Then, Personal Capital scans that data and looks for patterns in your monthly cash flow.

Additionally, the Expenses Tracker feature (this can be found under the cash flow chart) is super helpful for me, especially as an entrepreneur. You can add tags to every expense that you have which makes using the Three Bucket Budget even more intuitive. Simply label your expenses by each of the bucket categories. Of course- you can be as specific as you like during your spending labeling process.

Using these methods means that you have the knowledge of how much money you’re bringing in and how much is going out — all at your fingertips.