How We Simplified Our Banking Strategy for 2025
In 2024, we had a patchwork approach to our banking setup. While our core spending came from ING accounts, we had several other accounts with different banks, each serving a specific purpose. We had a house-building account, a smile account, a travel account, funds in our offset account, and a few other accounts scattered around to maximise interest rates.
However, as mortgage rates remain on hold (and high) in Australia, so do savings rates. In 2025, we decided to simplify our banking and go back to basics. We’ve returned to the essence of the Barefoot Investor’s serviette bucket strategy, with a minor twist.
Splurge and Expenses
Our splurge and expenses accounts are with ING. A setup we’ve had since adopting the Barefoot Investor method. My salary is deposited into the splurge account, and the following day, transfers are made to the expenses account and our smile account (also with ING).
All direct debits, grocery shopping, bills, and other routine expenses come from the expenses account. Previously, medical costs, gifts, or clothing for our children also came from this account. However, in 2025, we’ve introduced a new approach. We opened a UBank account under my wife’s name, and each month, we transfer allocated funds for medical (renamed ‘healing’), gifts, and clothing expenses, regardless of whether we’ve spent anything in those categories.
The reasons for this change are:
Simplifying our budgeting—no more running expenses like a business profit-and-loss statement.
Allowing unused funds to build over time, which will be helpful with two growing children.
Sharing financial responsibility now that my wife is back at work, making this a collaborative effort.
Smile Account
ING offers a competitive savings rate of 5.50% on their Savings Maximiser account, but it comes with strings attached: five card transactions, a $1,000 deposit, and a growing balance each month. I find these requirements cumbersome.
This year, we’ve repurposed this account for travel savings, a category that truly makes us ‘smile’—and moved our house-building savings elsewhere.
FIRE Account
Our FIRE account (or ‘Fire Extinguisher’ as the Barefoot Investor calls it) is focused on accelerating debt repayments. Currently, our only debt is the mortgage on our land. In 2025, as we start building a house, this account will hold funds for that purpose.
Macquarie Bank offers a savings rate of 5.35% for the first four months (and 5.00% thereafter) without any hoops to jump through. This simplicity and competitive rate make it a perfect fit for our FIRE account.
Mojo Account
Our Mojo account, or emergency fund, is kept in our offset account with IMB. While others might prefer high-interest savings accounts, our decision is driven by simplicity and the high variable mortgage rates (over 6%). Keeping these funds in the offset account reduces our mortgage interest and minimises the need for extra accounts.
If we implement a debt-recycling strategy this year, we might consider opening another Macquarie account alongside our FIRE account.
Grow Account
My superannuation is with Hostplus, invested in a high-growth strategy. Based on an Indexed Balanced Fund, Hostplus’ performance has been consistently strong, and it recently won Gold in Money Magazine’s “Best of the Best 2025” awards. It’s reassuring to see my super fund maintain its long-term success.
Other accounts of interest…
Children’s Accounts
Both of our children have accounts with Great Southern Bank, which offers an excellent 5.50% savings rate with no strings attached. These accounts are perfect for accumulating birthday and Christmas money. Over time, these funds will give them a solid financial foundation when they’re ready for their own accounts and financial independence.
Summary
In 2025, we’ve simplified our banking to align with the Barefoot Investor’s bucket strategy, ensuring clarity, efficiency, and collaboration in managing our finances. By optimising our accounts for specific purposes—splurge, expenses, smile, FIRE, mojo, and grow—we’re setting ourselves up for a stress-free and financially secure future. Simplification has not only reduced complexity but also brought us closer to our financial goals while fostering a collaborative approach to money management as a family.