We're in danger of getting into a semantic swamp here with respect to the cash bucket. What exactly is a "normal" expense vs an "unexpected" expense?
To me, a "normal" expense is something that is predictable: a new roof, other major homeowner maintenance, typical major vehicle maintenance, and obviously the normal household operating expenses, including taxes, insurance, food, etc.
So the cash bucket certainly needs to be adequate to cover 3 to 5 years of those normal expenses. We knew well what those normal expenses were because at an early accumulation stage we kept good records of our ongoing expenses, sorted by category, so that we could separate the necessary from the optional. Optional? Things like vacations, restaurants, wine and liquor. Keep records like that and after 3 or 4 years you pretty well know what's necessary and what's optional.
An "unexpected" expense could certainly be a major medical liability or other tragedy not covered by insurance. Since something like that is unanticipated and unpredictable, frankly I don't really know how to protect against that in advance. Worst scenario it might be necessary to partially draw down both buckets for something like that.
All of this depends of course on what the normal expected income is. If the income is greater than the normal expenses, then there is, to an extent, a cushion there in case of disaster.

Still keeping an eye on ASC Ardmore Shipping out of Bermuda. RSI is high. Better to wait. Hoping to find it under $15 sometime soon.
The Red Sea attacks make things difficult. On the other hand, the situation offers maritime shippers the perfect excuse to raise prices. I wonder which way all of this will shake out? And is ASC thriving amid the situation because they do not sail through the Suez? I can find no recent press releases or announcements.
https://www.morningstar.com/stocks/xnys/asc/quote
One month old:
https://seekingalpha.com/article/4658588-ardmore-shipping-quality-company-discount-to-play-shipping-cycle

The 3 bucket strategy increases complexity and requires too much maintenance.
The author's recommended approach seems prudent:
"Beyond cash, all a retiree needs is one 'bucket' for investments.
The portfolio would hold between 50 and 75% in equities for those
following the 4% rule or similar retirement spending strategies.
The remaining 25 to 50% would be held in intermediate term Treasuries and TIPS."

Harold EVENSKY, the originator of the bucket system, had just 2 buckets - one for short-term money that didn't belong in the market, and another that was in the market for long-term. It just formalized the idea that the money one needed soon didn't belong in the market.
But his followers, especially Christine BENZ at M*, "refined" it into 3 or more buckets. Then elaborate systems followed to fill them up.
So, this 2010 interview of Evensky by Benz is interesting.
https://www.morningstar.com/articles/330323/the-bucket-approach-for-retirement-income
Edit/Add. Also found a related MFO thread from 2021, https://mutualfundobserver.com/discuss/discussion/58461/cash-flow-strategy

That's a good article and video @hank. He seems to be a proponent of 5 years cash and then a portfolio of 50%-60% equity. Well, that seems to me to be a 2 bucket system. Maybe it's just semantics. But his ideas are in line with mine, a cash buffer bucket and then a moderate portfolio bucket. I don't think you need anything fancier unless you are more comfortable separating bonds/income from your equity bucket. Everyone's brain categorizes differently.

@sma3- Well, a main issue here is very similar to what's happening in Ukraine. Cheap and dirty attack hardware costs $4.95 (on sale from North Korea and Iran) and the sophisticated intercept weaponry from the US and Israel works pretty well, but costs $4.95 million dollars per each.
Exaggeration obviously, for sake of contrast, but you can see the problem. Our tax dollars at work.

Here's edited excerpts from a current report from the Washington Post on the Red Sea/Suez Canal shipping situation:
In just a few months, Yemen’s Houthis have taken an outsize bite out of global shipping — and have begun to threaten the economy of their stated target, Israel.
While Israel, which relies on the Mediterranean more heavily than the Red Sea, has proved resilient, experts warn that the attacks already pose a threat to Israel’s economy and could come to take a greater toll if they persist in the face of U.S.-led airstrikes.
The Port of Eilat, Israel’s toehold on the Red Sea, has seen an 85 percent drop in shipping activity, its chief executive told Reuters last month. Without a reversal, “unfortunately we will likely have to furlough workers,” he told the Jeruslaem Post.
Launching missiles at commercial ships in the Red Sea, a choke point on one of the world’s key maritime routes, turns out to be a sure way to draw the ire of the United States and its allies: Nearly a fifth of freight bound for the U.S. east coast usually passes through the Red Sea, en route to the Suez Canal, and global shipping giants have begun to send ships the long way around Africa.
The Houthis have maintained that since they began launching strikes, in solidarity with Palestinians under Israeli bombardment in the Gaza Strip, that their primary goal was not to upend world commerce, but to apply pressure on Israel for a cease-fire in Gaza.
While most of Israel’s maritime trade passes through Haifa and others ports on the Mediterranean — subject to broader delays in global shipping caused by the Red Sea crisis but not necessarily more so than ports elsewhere — Eilat is a key entry point for some imports from East Asia.
The shipping industry has responded to the Houthis’ focus on shipping to Israel. Evergreen, the Taiwanese shipping giant, said last month it would “stop accepting Israeli cargo” immediately “for the safety of cargo, ships and crew.” Maersk last month introduced a surcharge on shipments to Israel to help cover rising insurance costs.
The global economic impacts of the Red Sea strikes, rather than specific effects on Israel, could come to be the larger source of pressure, contributing to a sense among Israel’s allies that the entire region could spiral into violence.
As long as the war in Gaza continues, the risks that the situation in the Red Sea degrades further and that regional skirmishes such as on the Lebanese border develop into war “increase exponentially,” said Dan Arenson, a geopolitical risk adviser at J.S. Held, a global risk consultancy. “I think the Biden administration gets that.”

I believe that a few days ago I read a report suggesting that the route around the horn of Africa would add 3 days to the shipping run, for a fairly modest cost of approximately $5400 per shipping container on container ships. Not expected to have a major influence on inflation. At the moment energy shipping to/from the US and Europe (LNG & various oil products) is coming from a number of sources other than Saudi Arabia, so that route is less critical, at least for now.
Egypt is really taking it in the shorts, though... their national income will be down to almost nothing until this is sorted out, and that certainly isn't going to help Mideast stability... not at all. You think that maybe Egypt might take a very dim view of Israel on this? And where is Israel trying to drive the Gaza Palestinians?? Oh, that's right... the Egyptian Sinai. This should end well...

TFLO invests in floating rate treasury similar to that of USFR, WisdomTree treasury floating rate ETF.

Here's a comparison of TFLO and USFR:
https://portfolioslab.com/tools/stock-comparison/TFLO/USFR
Similar with at least a couple of curious quirks. One is that there is virtually no correlation (R² of 1%) between the two. That's likely due to the fact that these are extremely steady funds and so correlation measures primarily small random zigs vs. zags that are meaningless.
The other is that on Dec 19, 2014, TFLO dropped 4½%, opening at 50.06 and closing at 47.83. It fully recovered at the next open, but what happened? Data glitch?

In term of cash flow, the cash bucket is secured based on your annual living expense minus social security and pension $ for say 3-5 years. Emergency house/car repair can be factored into that cash bucket and back fill that over several years.
Some people have a second bucket in between consisting of bonds and balanced funds to dampen the market volatility and the possibility of prolong drawdown. Dividend growth funds can be part of this strategy. You can decide the % that you feel comfortable to fill the cash bucket every year. Personally, I use both balanced funds and dividend growth funds.
The third bucket is consisting of stocks/stock funds for capital growth.

@fed495, I apologize and stand correct as @JD_co and BaluBalu noted above too. For a moment, I confuse muni bonds with US treasuries. I correct the above comment.

@Crash - Maybe bring me up to speed … What are your primary uses of M*? Is that your main portfolio tracker?
Gosh - there’s lots of alternatives, including dedicated apps - but I realize it’s hard to “change horses” midstream. Long ago I went to 2 separate trackers (both paid apps) for when the inevitable “hiccup” occurs. I do look at M*’s breakdown of fund holdings. But sometimes they aren’t accurate if you compare them to what the fund publishes. The ability to X-Ray holdings is nice. I see above now where you use that.
For the price (0) I have no beef with M*. I read a lot of their fund ratings and reviews and suspect they lean too much on recent (3-5 year) performance in drawing conclusions. But don’t we all? :)

For accounts at Fidelity,
FSIXX has a minimum of $1M. FRSXX is the Institutional class of the Treasury Only MM fund and pays slightly higher than FSIXX.

To be clear, both share classes are institutional classes; one is labeled "I", while the other is labeled "Institutional". Sort of like Vanguard offering multiple institutional share classes with labels "Institutional" and "Institutional Plus", such as VINIX and VIIIX. 

FRSXX does not seem to say what the minimum required is but I presume it is not accessible to retail clients. Is that right?

The top of the page for FRSXX, right below the fund name and NTF, reads:
"This fund has a minimum initial individual, IRA, and Group Investment of $10,000,000."
https://fundresearch.fidelity.com/mutual-funds/summary/31607A802
As far as being open to retail investors, Fidelity generally seems amenable to retail investors so long as you meet the requirements for investing. (For example, JLPSX is open to retail customers at Fidelity, but while Schwab lowers the min to $100K it limits access to only institutional customers.) I suspect that VHNW individuals would be allowed open a position in FRSXX.

Why does Fidelity make it less advantageous to keep money at Fidelity, rather than move to Merrill Edge? Is it record keeping costs and convenience that Merrill offers to Fidelity?

Does the reason matter? Many fund families let third party brokerages sell their institutional shares with much lower minimums than when the shares are sold directly. For example, Schwab offers PIMIX with a $2.5K min rather than the $1M stated in the prospectus. It seems that Merrill likewise offers easier access to institutional share classes of funds. But at Merrill that improved access is largely limited to MMFs.
If it bothers you enough, let Fidelity know. If enough people clamor for something, it might have an effect. Three days ago when speaking with a Fidelity rep (on a three way call as a favor to a friend), I was asked what Fidelity could do to make it more attractive. Making some of their cheaper share class funds available at a more reasonable min was one of my suggestions.

dividends are 99.9% tax exempt in my state

@Fred495, if I am correct, treasury bonds/ ETFs are federal tax-exempt, not state exempt. TFLO invests in floating rate treasury similar to that of USFR, WisdomTree treasury floating rate ETF.

Sven, as far as I know, interest on US Treasury bonds is taxable at the federal level, but exempt from state and local income taxes.
TFLO currently invests 99.98% in Treasuries, hence only 99.98% of the fund's interest is tax exempt at the state and local level.

@sma3 & @Sven I agree that having a cash bucket makes sense. Mine is held outside the investment accounts described above. It currently equals about 13% of the total held in those accounts. It is intended to temporarily provide funds to mitigate the effects of a prolonged downturn in investment portfolio returns and to temporarily help fund significant required expenditures like replacing a leaking roof. It is also intended to provide transition funds to cover the waiting period before long term care benefits become available if my wife or I suffer from a rapid decline in health status. The buffering benefits of exclusively using dividends to fund investment account releases potentially helps limit the necessary size of that bucket. But, perhaps it would be prudent for me to increase it to at least 15%. Thanks for your comments.
@bee Yes. And a link to Portfolio Visualizer's Monte Carlo portfolio simulator may be useful too.
https://www.portfoliovisualizer.com/monte-carlo-simulation

dividends are 99.9% tax exempt in my state

@Fred495, if I am correct, treasury bonds/ ETFs are federal tax-exempt, not state exempt. TFLO invests in floating rate treasury similar to that of USFR, WisdomTree treasury floating rate ETF.

Not Federal tax exempt.

dividends are 99.9% tax exempt in my state

@Fred495, if I am correct, treasury bonds/ ETFs are federal tax-exempt, not state exempt. TFLO invests in floating rate treasury similar to that of USFR, WisdomTree treasury floating rate ETF.
Edits: @fred495 is correct that TFLO is exempt from state and local income taxes, not federal tax.

For accounts at Fidelity,
FSIXX has a minimum of $1M. FRSXX is the Institutional class of the Treasury Only MM fund and pays slightly higher than FSIXX. FRSXX does not seem to say what the minimum required is but I presume it is not accessible to retail clients. Is that right? I invest in FDLXX, another Treasury Only, has a 4.97% (vs 5.25% for FRSXX) (7 day) yield as of 1/19 and does not have a minimum. Why does Fidelity make it less advantageous to keep money at Fidelity, rather than move to Merrill Edge? Is it record keeping costs and convenience that Merrill offers to Fidelity?

Thanks @Fred495 Easy pease 100% tax exempt.