Life’s Golden Buckets Book Review: Kieron Sweeney’s Budgeting Habit

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At a weekend event, I saw Kieron Sweeney speak in person many years ago. It was an enjoyable experience. He was funny and very informative. He made light of the fact that some people think he looks similar to Rowan Atkinson. One of Atkinson’s best-known characters is Mr. Bean, so Sweeney did some impressions of Mr. Bean.

Sweeney’s topic that weekend was the wealth mindset. One example he gave was an inventor of innovative men’s underwear who went on to sell his company for $3,000,000. That example and others show you can create wealth out of pretty much anything, as long as you have the wealth mindset to support your efforts.

On that weekend, Sweeney taught those of us attending what he has since gone on to call Life’s Golden Buckets, which he has spoken about in a TED Talk and which he has also written about in his books, including “Life’s Golden Buckets: The Budgeting Habit of the Super Rich.”

I have previously covered the Life’s Golden Buckets system in my post called “What’s Your Ransom? Find Out Now and Buy Your Freedom.” In this post, I’ll give you my review of the “Life’s Golden Buckets” book, and I’ll tell you about Kieron Sweeney’s budgeting habit.

Life’s Golden Buckets

“Start developing the right mindset to reach your financial goals. … Wealth is a habit. … No matter how you earn a living, (you will) be making decisions about what you do with your income. … The Life’s Golden Buckets system is a wealth-building formula that requires you to divide whatever income you receive into specific categories.” – Kieron Sweeney

It’s important to note here that Sweeney is referring to any money you receive from any source.

“If you get into the habit of following this system with every single dime that comes your way, you’ll soon be amazed at how quickly you’ll be able to significantly improve your financial standing.” – Kieron Sweeney

You can use the system for your personal income and also within any business(es) you may have.

The Life’s Golden Buckets system includes the following seven buckets:

  • Your Tax Bucket;
  • Your Investment Bucket;
  • Your Spending Bucket;
  • Your Wisdom Bucket;
  • Your Fun Bucket;
  • Your Charity Bucket; and
  • Your Life’s Expenses Bucket.

Your Tax Bucket

The tax bucket is primarily referring to your income tax. If you’re an employee, this bucket is already handled for you since the income you receive from your employer is after-tax income.

If you’re self-employed, then the tax bucket is where you’ll put 20% of your gross income. Once you’ve done that, you divide 100% of what’s left over into the other six buckets.

“If you’re paying more than 20% in taxes, you’re not paying your accountant enough money!” – Kieron Sweeney

The remaining six buckets are all after-tax money.

Your Investment Bucket

You’ll routinely put 10% – 20% of your income in the investment bucket. You can start with 10% and work up to 20%.

“There is a rule that can never be broken regarding this account. It’s a one-way street. You must NEVER touch these funds.” – Kieron Sweeney

Why is that? It’s because the investment bucket is where you let your money grow. The principal amount, the money you invest, is what would remain unspent. But, depending on the type of investment, you might get to spend the income you receive from it.

Your Spending Bucket

The spending bucket is where you’ll put 10% of your income.

“This is where you’ll save for the things you want to buy.” – Kieron Sweeney

The spending bucket keeps you from going into debt to buy things you want, including a home and a car. Instead, you’ll save up and only buy something with cash. You’ll save money on interest, and you’ll get to appreciate what you buy that much more.

That’s wisdom.

Your Wisdom Bucket

“No matter how old you are, you will always need to be learning something.” – Kieron Sweeney

The wisdom bucket is where you’ll put 10% of your income for your education, which can be education in various formats and sources.

“Education is always an investment in your future. … Any time you buy knowledge – in the form of tuition, a live or online course or seminar, a professional training or re-training, a book (like this one), an educational DVD, or an audio program – this is the bucket you’ll use. Even if you don’t have any plans for buying knowledge in the near future, at some point, the opportunity will present itself, and you’ll be glad you have funds set aside for your expansion.” – Kieron Sweeney

That is excellent advice right there. There were so many times when I wanted to buy some education, and I didn’t have the money set aside for it.

“The Wisdom Bucket is your assurance that you will never again have to pass up an opportunity to dramatically improve your situation through gaining some much-needed knowledge. Not everyone is lucky enough to meet a generous person eager to invest in (them).” – Kieron Sweeney

You already have an investment bucket, but the wisdom bucket is about investing in yourself, which can be a lot of fun. You’re worth the investment.

Your Fun Bucket

“Getting rich will require you to start living with all you need, as opposed to all you ever wanted. But along the path to riches, you’re still going to want to have some fun.” – Kieron Sweeney

The fun bucket is where you’ll put 10% of your income.

Sweeney insists you spend the entire amount in your fun bucket every month. Sometimes you’ll want to have more fun than that, so you can save up the money in your fun bucket for more than one month.

“Just don’t save any longer than three months at once, and always make sure this is money you really enjoy spending! … Live life and enjoy every precious moment.” – Kieron Sweeney

Think of the fun bucket as a built-in reward system for being disciplined with all the other buckets. Treat yourself. You deserve to enjoy your life.

And you’ll get to help other people enjoy their lives, too.

Your Charity Bucket

You have multiple options for what to do with the charity bucket. You can put 5% – 10% of your income into it. You can give 5% – 10% of your time. You can also do a combination of putting 5% of your money into the charity bucket and giving 5% of your time. It’s all up to you.

If you’re giving money, you can give it to the same recipient every month or continually change who you donate to.

“If you really feel you can’t spare the money right now, then give your time to a cause. … There are many ways to give back.” – Kieron Sweeney

Now for the final bucket in the Life’s Golden Buckets system…

Your Life’s Expenses Bucket

You’ll put all the rest of your income in the life’s expenses bucket. The percentage will vary based on how much you put into your investment bucket and how much you put into your charity bucket. The percentage remaining for the life’s expenses bucket will be 40% – 60%.

“This bucket is the one that will support all of your basic necessities … and any other expenses … required for your day-to-day survival. … If you currently are spending more than 60% of your income on the necessities for your daily existence, it’s time for you to look at downgrading your lifestyle. … This is how you become wealthy. You stop living beyond your means (or right at the cusp of them).” – Kieron Sweeney

This can be the most difficult bucket of them all. It requires simplification, and that is doable.

It’s All About Your Mindset

“Ask yourself, “Do I really want to spend this money right now, or do I want to be rich?” You can also remind yourself that you are in the process of creating wealth, so whatever restriction you’re feeling in this moment is temporary.” – Kieron Sweeney

I’ve been through that sting with applying the Life’s Golden Buckets system, but it’s necessary. It’s all about your mindset. This is a very effective system for getting out of debt, staying out of debt, and living the life of your dreams.

“Many truly wealthy people live modestly. That’s how they got wealthy and … continue to grow their wealth. … If you adopt the Life’s Golden Buckets system and maintain it long enough, you will eventually become wealthy. Not “maybe.” Not “if you manage some wild stroke of luck.” It will unequivocally happen.” – Kieron Sweeney

Sweeney provides a wealth-building system for you and me to follow. Throughout the “Life’s Golden Buckets” book, he gives examples from his own life and the lives of others who have applied the system.

One of the people who applied the Life’s Golden Buckets system started by applying it to $1. It isn’t the amount that matters. It’s the habit. They built the habit and maintained it. They became a multi-millionaire by applying the habit consistently.

Steer Your Own Ship

Sweeney talks about the vast importance of entrepreneurship. And he’s right to do that. As an entrepreneur, you have opportunities available that you can’t access when you’re only an employee. For example, you could have quite the savings on income tax.

Even if you’re interested in being an entrepreneur, Sweeney advises keeping your job, at least for now.

“Your goal is financial freedom, and there’s nothing freeing about cutting off your dependable source of income before you have a new one securely in place.” – Kieron Sweeney

I’m living proof of that. I quit my job five years ago without having any other income in place, which made for quite a stressful time. Thankfully, I became self-employed, but it was a painful transition period. I used all my savings until I could set up a new source of income.

“I always coach my clients to follow their passions and interests. It only stands to reason that you will excel at what you most love to do.” – Kieron Sweeney

Building a business is challenging enough without it being something you don’t enjoy.

Sweeney gives examples of income-producing opportunities and recommends only buying used, not new, whenever you’re buying cars and boats.

“Even if you’re not in the financial position to start a side business or buy an income-producing asset now, … learn about some options and begin planning for (when) when you’ll have those resources. It requires a bit more work than simple investing, but it’s the best way to speed up the process of growing your assets. Also, … there are many good affiliate marketing opportunities. You can set yourself up as an affiliate with many established companies and earn commissions.” – Kieron Sweeney

I’ve seen that there are a lot more affiliate marketing opportunities than I realized. You’d be surprised how many companies offer affiliate programs. Those companies include many you would recognize, such as Wal-Mart, Best Buy, and Amazon.

Next, Sweeney moves on to the necessity of avoiding wealth killers.

Mortgages Are Wealth Killers

“It’s much better to rent a home until you are financially free. I will only buy a home if I can pay cash and it’s in a market that will return double the investment within a defined period of time. … Mortgages and taxes are the biggest wealth killers around. … A down market is the only time it makes sense for you to buy, and it’s not something you want to guess about or try to determine on your own.” – Kieron Sweeney

I very much agree that renting is best. I’ve been around people who object to that and think that renting is throwing away money. No, it’s not. You’re paying for a place to live. It’s the price for not being homeless. Besides, the cost of having a mortgage is so much higher than paying rent.

“Mortgages steal wealth. By the time you pay off your house with a mortgage, you’ll have paid about two and a half times the price you agreed to pay for it.” – Kieron Sweeney

Two and a half times? That’s huge! Why does anyone intentionally do that to themselves?

When you see just how much more having a mortgage costs you, renting where you live looks like an outright bargain.

I’ve always rented. It isn’t always ideal, but it’s better than having a mortgage. If you’re currently stuck with a mortgage, you might be able to switch to a home equity line of credit. It can be worth looking into.

“Rent something economical that fits within the Golden Buckets guidelines. Keep it simple. More than half the world lives in a two-bedroom apartment or its equivalent. Could you do that for ten years, paying a nice manageable rent, knowing that you’d eventually be able to buy a house with cash and not pay a dime beyond its price? It’s a choice.” – Kieron Sweeney

An apartment is all I’m interested in living in. It’s quite sufficient. A smaller space helps me be a minimalist, and it’s also easier to take care of.

There are other wealth killers besides mortgages and taxes, and Sweeney mentions them, too. Wealthy people avoid wealth killers as much as they can.

How else would they be wealthy and stay wealthy?

Wealthy People Know How to Save a Buck

“Cars are another area where you can save a great deal of money. … If you do buy a car, you don’t ever need to buy a new one. … It’s always smarter to buy a used car that’s at least one year old. It’s even better if you can find one … that’s two years old.” – Kieron Sweeney

My first car was almost as old as I was. I walked more often than I used it. My second car is the only one I’ve bought when it was brand new. There were so many problems with it. My third one, also a used car, was a complete waste of time and money. My fourth car, a 2008 Pontiac Vibe, was the best car I’ve owned. It was 11 years old when I bought it, and it was a very reliable car. If only my previous cars had been like that one.

“Before every purchase, … get into the habit of asking yourself, “Do I really need that?” … If you start postponing every purchase by 24 hours, you’ll soon discover how little you actually need to buy. Very often, you’ll find that 24 hours later, the strong desire to buy that item is a long-forgotten memory.” – Kieron Sweeney

I’ve saved countless amounts of money by asking myself if I really need to buy something and then not buying it. When I’ve been disciplined enough like that, life has gone really well.

There’s the flip side, too, naturally. I’ve wasted so much money when I haven’t been disciplined enough. It’s all about not giving in to the temptation for instant gratification.

Sweeney has some more wealth mindset tips to share.

“When you go to the grocery store, make a point to not buy anything you don’t truly need.” – Kieron Sweeney

Makes sense. Food is one of the most controllable expenses we have. Also, if we only buy what we truly need, we’re more likely to make healthier choices. And our bodies will thank us for that.

When I’ve gone to the grocery store with a shopping list and an exact amount in mind for how much to spend, I’ve been the most disciplined. I’ve been pleased when I’ve stuck with the list and the budget.

“When you shop for gifts or other items that bring you into stores full of temptations, get your mindset in place before you even leave the house. Acknowledge to yourself that it’s likely you’ll see things you’d like to buy, and remind yourself that you’ve chosen to become rich instead.” – Kieron Sweeney

I’ve chosen to become rich instead.

What will you choose?


In “Life’s Golden Buckets: The Budgeting Habit of the Super Rich,” Sweeney provides a wealth-building system for you and me to follow. You can start by applying it to as low an amount as $1.00! Creating the habit is what matters the most.

As a reminder, the Life’s Golden Buckets system includes the following seven buckets:

  • Your Tax Bucket (20% of your gross income);
  • Your Investment Bucket (10% – 20% of your after-tax income);
  • Your Spending Bucket (10% of your after-tax income);
  • Your Wisdom Bucket (10% of your after-tax income);
  • Your Fun Bucket (10% of your after-tax income);
  • Your Charity Bucket (5% – 10% of your after-tax income and/or 5% – 10% of your time); and
  • Your Life’s Expenses Bucket (40% – 60% of your after-tax income).

Sweeney had times when he stopped applying the Life’s Golden Buckets system and suffered for it. Now, he keeps using the system no matter what.

I’ve also had times when I stopped applying the system, and I suffered needlessly. I’m starting all over again, and I applied the system to $1. I put 20% into my tax bucket and 100% of what remained into the other six buckets. Next week, I’ll apply the system to $5. And I’ll keep increasing the amount until I’m applying it to my entire income.

This time, I’ll create the habit and keep it.

Buy the “Life’s Golden Buckets” book. Discover everything I told you about here and everything I didn’t tell you about. It’s an excellent book to review regularly. I recommend applying the Life’s Golden Buckets system to your life. In the comments section below, let me know about your experience and your results with the system.

You are greater than you think, stronger than you know, and more powerful than you realize.

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Until next time,

James Barnett

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