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Barefoot Investor Bank Accounts: Explained

There’s more to it than you think
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Every time I’m around my sister and we go to pay for something, she whips out her orange ING bank card and starts talking about the Barefoot Investor (and special bank account set up).

Mojo, Fire Extinguisher, Grow…

Initially I thought she was talking about an Austin Powers movie but all this has to do with different bank accounts, buckets and budgeting.

mojo-baby (1)

Today I’m going to walk you through the Barefoot Investor Bank Accounts and Bucket strategy.

We are going to take you through each of the different account names, types and how to set everything up.

So if you’ve read the book… Or got partly through it and then gave up, and have been left with thousands of different bank accounts open, then this article is for you.

Let’s jump right in. 


Barefoot Investor Basics

Basically, The Barefoot Investor goes through a streamlined way of saving money, without having to set up or follow up a strict budget.

His concept is by setting up your direct debits to automatically move the money. So really, it’s a new-age way of saving.

But when I told my friend that I was going to be writing an article on the Barefoot Investor, she simply said:

“Ugh, I gave up, too many buckets, too many bank accounts”.

Which got me thinking.

Is this a common occurrence for those who’ve read the book? 

ing barefoot investor


Barefoot Investor Buckets

In this section I’m going to break down the bank accounts and simplify it for you, so you don’t end up like my friend – who gave up.

I’m well aware of the confusion around the five different bank accounts that you’re asked to set up. 

Basically, he’s saying to put your income into three separate groups. 

  • Blow Bucket: This is where your day to day expenses come from, you got bills to pay, rent, food, etc. Any ordinary ongoing expenses come from this bucket.
  • Mojo Bucket: The mojo bucket is used for your rainy day emergency savings, rather than relying on a credit card you have these funds if something goes wrong.
  • Grow Bucket: This is your money maker bucket. The grow bucket is where you do your investing and look for longer term wealth building.


barefoot investor buckets

In summary, one bucket is for spending money on life, one is for savings for a rainy day/emergency, and another is for long term investments. 

barefoot investor bank accounts



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Blow Bucket

Now that we’ve moved from our three main categories and demystified the use of funny words. 

It’s time to break down what the BLOW bucket means. 

This is the one that causes all the confusion, and for my friend just before, the straw that broke the camel’s back.

barefoot investor blow bucketUnder the blow category, the next step is to set up four bank accounts through ING

This is because ING has no fees and you can use any ATM without being charged.

Now out of the four accounts you have created, in actual fact you only have TWO cards that you can use to access them. 

These are Daily Expenses and your Splurge Account.


Daily Expenses – Your everyday spending you need to live off (60% income)

Everyday spending is pretty self explanatory, but here you need to put in 60% of your income. 

Things like groceries, rent, petrol, coffee and whatever else you spend daily will be thrown into this account. 

This one is also used for car rego, insurance, electricity bills etc. 

You can access it with your bank card and your budget is 60% of your total income.  

barefoot accounts


Splurge – Spending on things you love (10% income)

Next the splurge account is for the finer things in life. 

Here you’re allocated 10% of your income, you might need to say goodbye to your designer goods though.

Things like a new dress, some bling, fancy lunches, a pair or shoes or whatever else you like fall into the splurge. 

It’s basically extra, unnecessary, but nice to have spending.

barefoot investor bucket


Smile – long term savings for fun things (10% income)

The third account is a form of savings account. 

Which isn’t linked to a bank card.

This one’s called smile, and again just like splurge it’s 10% of your income. 

This one is for big purchases that will add to your happiness, like a holiday to the Greek Islands, a new couch or car.

barefoot investor smile


Fire extinguisher – debt and financial stress reduction (20% income)

And finally we have the fourth account which is a fire extinguisher. 

Which isn’t linked to a bank card.

Seriously, the names get more confusing as we go along. But this account takes 20% of your income and the money is moved around.

So what happens here is, the fire extinguisher is used to cut debt and stress from your life that could arise. 

Things like credit card debt, or extra mortgage repayments you hadn’t considered etc. 

Money from fire extinguisher gets saved but then can be used as needed to reduce debt.

Barefoot Investor Bank Accounts Explained


A note to the budget savvy people:

You may struggle initially with the Barefoot Investors concepts because of all the different accounts and set up system. 

So what I recommend you do is streamline the process to suit you. Removing an account and consolidating one of them may help reduce confusion. 



Mojo Bucket

So now that you’ve got your core accounts set up, it’s time to step away and open a separate account. 

This one is called Mojo.

barefoot investor mojo account

For me, I was already with Commonwealth Bank, so it was a matter of just using this bank account and opening the ING ones to set up the first accounts.

Mojo is recommended to be with a different bank.

The Barefoot Investor recommends UBank, but I recommend whatever bank you’re already with to save yourself setting up MORE accounts.


Mojo is your safety money

When it comes to Mojo, you need to start off by gathering as much money as you can to save at least $2,000 to get you kickstarted into gear. 

Whether it’s selling clothes, old iPhones or whatever you can find. It’s about gathering the money to get your Mojo account up and running.

And basically, saving this money is to get rid of your credit card debt. 

barefoot investor mojo accounts

From this day forward, the Mojo account is going to act like your credit card.


But wait, what’s the difference between the Fire Extinguisher and Mojo?

Well, Fire Extinguisher is used to pay off debt that you already have. 

While Mojo is for future payments you want to make. 

Then once you have paid off your debt using fire extinguisher – that money then is moved into your Mojo.

Having this money here is a good buffer for if you can’t work for a while, or need money for unexpected payments.

barefoot investor fire extinguisher

After that, then you’ve got your Mojo building which then the money begins to move into your Mojo that then starts to become your grow bucket.


Grow Bucket

The concept of the Grow bucket is about growing your wealth. 

Money moves through the chain of accounts and from your take home pay and into your Blow bucket through to fire extinguisher and to Mojo then onto Grow. 

barefoot investor grow

You can invest this money however you like.

Whether it’s keep it as savings, as shares, property or cryptocurrency. 

barefoot investing

It’s up to you how you build your wealth.

barefoot investor grow bucket


An example of how the Barefoot Investor accounts work

All of your income goes into the BLOW bucket. 

  • ✅ 60% goes into Daily expenses
  • ✅ 10% Splurge
  • ✅ 10% Smile
  • ✅ 20% fire extinguisher

Then from Fire Extinguisher you pay off debt.

Extra money is then moved into Mojo (which should have $2k already in it) and begins to build up. 

Then extra money is moved into Grow which is your long term wealth.


How to set up the Barefoot Investor accounts?

ING gives out recommendation codes to get $75 when you sign up.

Jump online and put in the code and you’ll be able to set up your account. Otherwise if you don’t have a referral code you can simply go online and set up and account following the prompts here.

Once you’ve set up your bank account, then your two cards will be mailed out to you.

As it’s an online bank, it’s really easy to do from the comfort of your own home. 

They have good customer service if you call them too.

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