“Back in my day,” was a phrase used by our grandparents to describe (1) how much harder things use to be; (2) how much better they had it; or (3) somehow both harder and better things were back in their day.

One thing that the “Greatest Generation,” the generation who fought in World War II, had was a great distrust of banks and doing anything other than keep their money in a coffee can or under their mattress. The final budgeting system reflects this DIY attitude.

While Dave Ramsey and Ramit Sethi have advocated for excellent budgeting systems, sometimes we just want simple. I don’t recommend actually keeping all of your money in a coffee can at home; however, using a system of “cans” or buckets can help identify where funds are needed and how to prioritize your funds. Banks often allow you to create sub-accounts within your bank account that you can label and use as buckets. In this example, I’ll describe the system using three buckets: (1) Your Needs; (2) Your Wants; (3) Your Savings.

Bucket 1: Your Needs

First, make sure you have the basic necessities covered: Food, Fuel, Car Payments, House payments/rent, Utilities, Internet, Etc… These are things that are necessary for work, life, or success.

Bucket 2: Your Wants

Second, put money in to cover things that you could live without, but why would you: Netflix, Gym, Magazines, random Amazon Purchases, upgraded internet speed, cable, etc… These are things that you want or are recreation.

The key difference between needs and wants is this question: “What would happen if I didn’t have [x] this month?” However, you may wonder why I included internet in both. Internet is a necessity in the modern day for working from home, making purchases, research, and other activities; however, spending money to upgrade your internet speed is typically for recreation, unless it is necessary for working from home.

Bucket 3: Your Savings

Set goals for your savings. For example, you might think that “I want to buy a house” so you should save up enough for a down payment for your house. You can save for multiple things at once too. Set a portion aside for a wedding, a new car, and a vacation with specific goals to meet.

The benefit of this system is its simplicity. You need $2,000 to cover one thing, then you need at least $2,000 in that “coffee can.” As long as you have money in your “can” to cover your costs, it is working. Plus, you can add to or modify this as needed. Add a can for your wedding, remove a can after you pay off your car, or plan ahead by making sure you have enough in a can to cover [x] months of expenses.

This DIY method is simple and easy. Like all DIY projects – it all comes down to how much time and energy you put into it to make it work.

Please let me know what you think of this method and what method you use to handle your finances!