Daily Life

Barefoot Budgeting

July 25, 2017

I’m a terrible budgeter (although I do manage to save for the things I make a priority). I’m not so good week to week. I thought it was time to get sensible about money. After hearing some recommendations online, I’ve recently devoured “The Barefoot Investor” by Scott Pape and I am super keen to start. If you’re not all over your money and it freaks you out, then I highly recommend you read it. This post isn’t sponsored by the way, just a public service announcement. Pape knows about money. He’s an independent financial advisor and knows first hand what it is like to lose everything. He watched his farm and everything he owned burn down in the Victorian bushfires. But was able to turn to his wife at the time and say “I got this”, and he had.  This is the essence of the Barefoot Investor Budget. Pape wants you to be prepared for all possible events, but wants you to have fun too. He asks that you schedule dates to see how you are tracking, and five consecutive ones to get things going. Here are the principles of a Barefoot Budget and how you should allocate your money. Let’s do it.


Expenses = 60% of your income

No more than 60% of your income should be allocated to living expenses (food, accommodation bills). If you’re pushing further than this quota then its going to be hard to do anything. Pape recommends to see a financial advisor if you’re in this situation.

Splurge = 10% of your income

This is fun money. For things like pedicures, drinks at the pub or meals out. I’m pretty good at allocating this. (Too good in fact.) 

Smile (Fun Savings) = 10% of your income

Fun savings. Things like holidays, home renovations, that new couch that you want. Items that take more than two weeks to save for. This is where I currently spent most of my time spending. (Opps).

Fire Extinguisher = 20% of your income

The fire extinguisher is for short term emergencies. Like your car breaking down or your washing machine dying. You could also use this account to save for something meaningful like investing in shares, or pay down your mortgage a little. But you should also have some for some short term emergencies.  This is the account of mine that needs some work.

Somewhere else = MOJO account with 3-4 months of income

This account should be hard to reach, and hard to spend and ONLY touched in a REAL emergency. Like your leg being chopped off or your house burning down. Sitting elsewhere in another institution all together.

So this is what I am trying to implement in my household. Sounds  like a lot of accounts right? I kind of like the idea though, as then it is clear what is where without me trying to think about what money is in which account and why. I have not even made it so far to the super and the insurance section. Yikes. I will get there, and I will be in control!

I hope that in six months I will be in control of my finances and all these little pots will grow…grow little money pots!



Do you budget?

Have you read the Barefoot Investor?

What’s your emergency plan?

Kylie for IBOT

Ashleigh XXX

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  • As much as I want to devour this book our money set up is kinda weird being in a farm family business. Having said that I have all sorts of hidey spots for cash, saving accounts and monthly auto payments to help save for various things. This is the first year I have a Christmas fund!! Very impressed with myself!! I wish I’d got this book for my 21st but then wasting money on yourself is a time to be enjoyed. It doesn’t last for long 🙂

  • We used to budget every single cent for years … but we have now paid off our home so I’m not complaining!!!! Although I must admit I am enjoying having more financial freedom 🙂

  • Tracy

    My eyes tend to glaze over when people start talking budgets. I need something more concrete than vague percentages. Our budget is very, very simple. Mortgage, give, save, bills, food….the rest is discretionary, and I push anything leftover into savings at the end of the month. All of those categories are predictable and somewhat fixed so that makes it simple.

    The biggest thing I’ve learned over time, is to pay cash, or use a debit card with no overdraft. If you don’t have the money, “no” is the answer. It sounds overly simplistic, but it has kept us out of trouble.

  • I’m curious if the advice in this book is based on single or dual incomes? As the sole income earner, much more than 60% of my salary goes to our basic expenses. And that’s with have cheap rent, very little debt and don’t live extravagantly at all.

    In principle it all sounds quite sound, I’ve just always had this feeling that no financial adviser ever wants to say “yeah you’re doing it all right but just don’t earn enough to fit the method”.

    • I hear you. In the book he has case studies of this method and people have saved to buy a house etc. I think it’s about consistency rather than doing it quickly.

  • Hugzilla

    I know so many people who swear by this dude. We are totally unsophisticated when it comes to money but we are also very frugal (I am the second hand queen!) so our expenses aren’t all that lavish. We just pay whatever we can into the mortgage so we have a buffer for emergencies or unexpected but necessary expenses.

  • Love this simple but effective plan. We have a great personal budget however trying to budget in business is a nightmare for us. Does my head in!!

  • I like the look of this – simple but real to achieve #teamIBOT

  • I’m looking at our budget this week. It needs tweaking following our house purchase and my inability to say no to cheap flights. This formula looks fantastic.

    • Cheap flights are my problem. Like I practically sell it to my husband that we would waste money for not booking flights!

  • I’ve heard such good things about this book, so I bought it a few months ago and it’s been gathering dust next to my bed ever since. Your post is perfectly timed to kick my butt into budgeting gear!

  • I need to get my budgeting on track. A friend was also talking about this book. I go through phases. My weakness is books!