The key ideas

The Barefoot Investor: The Only Money Guide You'll Ever Need

Scott Pape, 2016

Payday comes, a week later the money is gone, and you can't tell where it went. An Australian finance columnist offers a system where your money is split into buckets once and then sorts itself out. Money dates, a safety cushion, debts falling like dominoes, and an honest look at what you can take from this Australian system for yourself.

Who it is for

For anyone whose pay disappears faster than they'd like, for couples who find it hard to talk about money, and for parents who want to teach their kids how to handle it.

Success isn't about what others see, or buying things you don't need with money you don't have to impress people you won't even know in twenty years.

About the book

Payday was on Friday. A week later the card is almost empty, and it's hard to remember where the money went: nothing big seems to have been bought.

Scott Pape grew up in the small town of Ouyen in the Australian state of Victoria, and for many years he has written a personal finance column under the name Barefoot Investor. In 2016 he gathered his system into a book that became the bestselling money book in Australia.

The book's main question: can you get your money in order without tracking every cent? Pape thinks you can, if you split your pay across accounts the right way once and then let the system run itself. He describes nine steps split into three parts: plant, grow, harvest.

One important caveat. This is the author's personal system, written for Australia, with its banks, taxes and retirement system. The percentages and advice in it are Pape's approach, not personal financial advice. For us, the principles themselves are what matters most.

Idea 1. A date where you talk about money

The book's first step sounds unexpected for a finance guide: go on a date. Pape suggests sitting down with your partner once a week, and later once a month, to calmly sort through your money. He calls it Barefoot Date Night.

As he tells it, he once sketched his system on the back of a paper napkin. Since then, the author writes, he and his wife have used this plan to save for their honeymoon and pay down their mortgage.

The point of the ritual is that money talk gets its own time and stops happening only during a fight or when an unpleasant bill arrives.

A couple argues about money only when the card is declined at the checkout. If the calendar has a calm evening set aside for the topic, there may be nothing left to argue about at the checkout.

A regular, calm talk about money can release some of the tension that otherwise bursts out at the worst possible moment.

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About the author

Scott Pape is an Australian finance journalist, born in 1978 in the small town of Ouyen in Victoria. For many years he has written a personal finance column under the name Barefoot Investor and appeared on TV and radio. He is also the author of The Barefoot Investor for Families and Barefoot Kids.

All books by this author: Scott Pape

Terms from the book

  • Buckets: An image from Pape's book: your income is split in advance into three parts, one for everyday life, one for a safety cushion and one for long-term savings. The author's scheme, not a financial standard.
  • Mojo account: In Pape's system, a separate account for your safety cushion, held at a different bank. First 2,000 Australian dollars, later three months of expenses.
  • Fire Extinguisher: One part of Pape's Blow bucket: about 20% of income for paying off debt and unexpected bills, later for saving towards a home.
  • Domino method: The author's way of paying off debt: from the smallest balance to the largest, with minimum payments on all the others.
  • Superannuation: Australia's system of compulsory retirement savings through funds. In the book it is an important local fact, not advice for other countries.

All terms

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