The Barefoot Investor Budget can help you take control of your finances and reduce financial stress. Let’s take a look at Scott Pape’s approach to budgeting!
The Barefoot Investor is none other than Scott Pape, an Australian financial advisor who’s written a bestselling book that millions of Aussies swear by. His approach to money is unique and user-friendly, and he calls it ‘the only money guide you’ll ever need.’ A big call, so let’s take a closer look!
CaptainFI is not a Financial Advisor and the information below is factual review information, not financial advice. This website is reader-supported, which means we may be paid by advertising on the site, or when you visit links to partner or featured sites. For more information please read my Privacy Policy, Terms of Use, and Financial Disclaimer.
Understanding the Barefoot Investor’s Budget
Scott Pape’s strategy breaks down your after-tax income into several ‘buckets’ designed to control your spending and help you save more effectively. It’s called the 60-20-20 rule, and these three main budgeting areas are;

Daily Expenses (60%)
This bucket is for all your everyday recurring ‘baseline’ expenses, including bills, rent or mortgage, groceries, transport, etc. The Barefoot Investor budget suggests the following breakdown;
- Housing: 30%
- Utilities (power, gas, water, internet, phone): 5-10%
- Transport: 5-10%
- Insurance: 5%
- Food: 5-10%
Savings – Grow (20%)
This is the portion of your income that is used for long-term savings – for things like buying a home, paying off your mortgage quicker, boosting your superannuation, and buying shares. This is where your FIRE investment would come from! Scott recommends initially using your savings to fuel a ‘Fire extinguisher account’ for putting out financial fires such as personal debts, and once you are debt-free to then direct this toward boosting your emergency fund even further.
“An emergency fund is money you save to cover urgent or unexpected costs. This could be car repairs, unexpected travel or an urgent medical bill. It provides a financial safety net so you don’t have to borrow money if something happens to you or your family.”
moneysmart.gov.au
Blow (20%)
This bucket is for deliberate spending – Scott Pape breaks this down further into two separate accounts or ‘buckets.
- Smile account (10%) that is used for saving up for longer-term delayed gratification on things like holidays or a new car
- Splurge account (10%) for your more everyday impulse luxury spends like coffee, movies or even getting a massage.
Now let’s see how it works and how it might be used to align with your financial goals.

Applying the Barefoot Investor’s Budget to your Household
The beauty of the Barefoot budget is in its simplicity. Rather than getting into the nitty-gritty of every line item, it allows you to set aside broad categories of spending and savings. So how can we use this to manage our spending and achieve our financial goals?
- Set up your Buckets: The first step is to open up two separate barefoot investor bank accounts at different institutions. This is in order to keep your Emergency fund (Mojo) separate from your transaction account. Pape recommends having these with different banks to avoid the temptation of transferring money easily between them. The first set of Barefoot investor accounts or buckets are your Daily Expenses (transaction), Splurge (transaction), Spend (savings), and Grow (savings). The second separate bank account is your Emergency Fund – the Mojo account, which should be a high-interest online savings account with one of the barefoot investor banks.
- Automate your Finances: Automating your money flow is key to success with this strategy. Set up direct transfers into your Daily Expenses, Smile, Splurge and Grow accounts each payday. This way, you’re paying yourself first and not leaving savings to whatever might be left over at the end of the month. The way I did this is to have my income landing directly into my Daily expenses account and then transfer the money straight out – 10% to Smile, 10% to Splurge and 20% to the Grow (fire extinguisher bucket).
- Budget your ‘Daily Expenses’ Bucket: Here’s where you’ll need to keep a close eye on, make the most deliberate decisions, and keep track of your spending habits. Remember, it needs to cover all your day-to-day living expenses – this is where conscious spending comes into play – Focus on spending your money where it matters most to you and cut back on unnecessary spending – remember this is your baseline level of expenses and includes the following areas:
- Housing: 30% for Rent or (minimum) Mortgage repayments
- Utilities (power, gas, water, internet, phone): 5-10%
- Transport: 5-10% for car Fuel, Registration, Car Insurance, Maintenance and public transport fares
- Insurance: 5% – for example Home / contents insurance, Trauma insurance
- Food: 5-10% – for household groceries (not including dinner dates!)
- Grow your ‘Grow’ Bucket: This is where your future wealth lies. Whether you’re investing in real estate, shares, or your superannuation, make sure you’re making sound, long-term investments. This is where the power of compound interest really starts to shine! The Barefoot investor recommends using your Grow bucket firstly as a fire extinguisher to put out any financial fires such as personal debt (credit card, personal loan or car loans) and then once that’s sorted to boost your emergency fund, make additional superannuation contributions and pay down your mortgage.
- Secure your ‘Mojo’ Bucket: Having an emergency fund provides peace of mind and financial security. You never know when an unexpected expense will pop up. That’s when your Mojo bucket comes into play. Initially, it should have at least $2,000 to start, which you eventually grow to a 3-6 month emergency fund – that is three to six months’ worth of your expenses. It’s not an investment but rather a form of self-insurance for your financial well-being.
“My kids think I’m a farmer. My kids’ teachers think I’m unemployed … because I do the drop-off most days. Some people think I run a cult. The truth? I’m just a country bloke from the bush who enjoys helping people take control of their own money.”
barefootinvestor.com/about

Captain FI’s Verdict
The Barefoot Investor approach is a straightforward, simple way to get your finances under control without needing a finance degree. It simplifies the process of budgeting, and gives example breakdowns which for many is a daunting task. The approach is practical, straightforward and designed to help you save money, create good money habits and reduce financial stress. There are many online budgeting calculators available such as this ING Budgeting calculator, which can be useful to help you break down your expenses.
While the 60-20-20 allocation might not work for everyone (depending on your personal circumstances and goals), the concept of separating money into different buckets or separate bank accounts is a powerful one. It’s particularly useful for those starting their journey to financial independence.
I would say, from the flavour of the FIRE community, the breakdown might more usually look something like 40-10-50 (Daily Expenses, Spend, Grow),
Remember, achieving financial independence and potentially retiring early is all about making your money work for you. The Barefoot Investor’s budget is a valuable tool in that arsenal. It’s worth considering if you’re looking for an easy and effective way to manage your household finances.
Until next time, remember – Financial independence and financial success isn’t just a dream; it’s a journey.

Financial Disclaimer
Financial Disclaimer: CaptainFI is NOT a financial advisor and does not hold an AFSL. This is not financial Advice!
I am not a financial adviser and I do not hold an Australian Financial Services Licence (AFSL). In this article, I am giving you factual, balanced information without judgment or bias, to the best of my ability. I am not giving you any general or personal financial advice about what you should do with your investments. Just because I do something with my money (or use a particular service or platform) doesn’t mean it is automatically appropriate for your personal circumstances. I do not recommend nor endorse any financial or investment product, and my usage or opinion of any product should not be interpreted as an endorsement, advertisement, or intent to influence.
I can only provide factual information based on my journey to Financial Independence, and that is provided for general informational and entertainment purposes only. I make no guarantee about the performance of any product, and although I strive to keep the information accurate and updated as it changes, I make no guarantee about the correctness of reviews or information posted.
Remember – you always need to do your own independent research and due diligence before making any transaction. This includes reading and analysing Product Disclosure Statements, Terms and Conditions, Service Arrangement and Fee Structures. It is always smart to compare products and discuss them, but ultimately you need to take responsibility for your use of any particular product and make sure it suits your personal circumstances. If you need help and would like to obtain personal financial advice about which investment options or platforms may be right for you, please talk to a licensed financial adviser or AFSL holder – you can take the first steps to find a financial advisor by reading this interview, or by visiting the ASIC financial adviser register and searching in your area.
For more information please read my Privacy Policy, Terms of Use, and Financial Disclaimer.
Captain FI is a Retired Pilot who lives in Adelaide, South Australia. He is passionate about Financial Independence and writes about Personal Finance and his journey to reach FI at 29, allowing him to retire at 30.
This budget template is a game changer! I love how straightforward and practical it is. It really helps to break down my expenses and make saving feel achievable. Thanks for sharing such valuable insights!