diff --git a/app/Actions/CreateBucketAction.php b/app/Actions/CreateBucketAction.php
new file mode 100644
index 0000000..d37be7f
--- /dev/null
+++ b/app/Actions/CreateBucketAction.php
@@ -0,0 +1,105 @@
+<?php
+
+namespace App\Actions;
+
+use App\Models\Bucket;
+use App\Models\Scenario;
+use Illuminate\Support\Facades\DB;
+use InvalidArgumentException;
+
+class CreateBucketAction
+{
+    public function execute(
+        Scenario $scenario,
+        string $name,
+        string $allocationType,
+        ?float $allocationValue = null,
+        ?int $priority = null
+    ): Bucket {
+        // Validate allocation type
+        $validTypes = [Bucket::TYPE_FIXED_LIMIT, Bucket::TYPE_PERCENTAGE, Bucket::TYPE_UNLIMITED];
+        if (!in_array($allocationType, $validTypes)) {
+            throw new InvalidArgumentException("Invalid allocation type: {$allocationType}");
+        }
+
+        // Validate allocation value based on type
+        $this->validateAllocationValue($allocationType, $allocationValue);
+
+        // Set allocation_value to null for unlimited buckets
+        if ($allocationType === Bucket::TYPE_UNLIMITED) {
+            $allocationValue = null;
+        }
+
+        return DB::transaction(function () use ($scenario, $name, $allocationType, $allocationValue, $priority) {
+            // Determine priority (append to end if not specified)
+            if ($priority === null) {
+                $maxPriority = $scenario->buckets()->max('priority') ?? 0;
+                $priority = $maxPriority + 1;
+            } else {
+                // Validate priority is positive
+                if ($priority < 1) {
+                    throw new InvalidArgumentException("Priority must be at least 1");
+                }
+
+                // Check if priority already exists and shift others if needed
+                $existingBucket = $scenario->buckets()->where('priority', $priority)->first();
+                if ($existingBucket) {
+                    // Shift priorities to make room
+                    $scenario->buckets()
+                        ->where('priority', '>=', $priority)
+                        ->increment('priority');
+                }
+            }
+
+            // Create the bucket
+            return $scenario->buckets()->create([
+                'name' => $name,
+                'priority' => $priority,
+                'sort_order' => $priority, // Start with sort_order matching priority
+                'allocation_type' => $allocationType,
+                'allocation_value' => $allocationValue,
+            ]);
+        });
+    }
+
+    /**
+     * Create default buckets for a new scenario.
+     */
+    public function createDefaultBuckets(Scenario $scenario): void
+    {
+        $this->execute($scenario, 'Monthly Expenses', Bucket::TYPE_FIXED_LIMIT, 0, 1);
+        $this->execute($scenario, 'Emergency Fund', Bucket::TYPE_FIXED_LIMIT, 0, 2);
+        $this->execute($scenario, 'Investments', Bucket::TYPE_UNLIMITED, null, 3);
+    }
+
+    /**
+     * Validate allocation value based on allocation type.
+     */
+    private function validateAllocationValue(string $allocationType, ?float $allocationValue): void
+    {
+        switch ($allocationType) {
+            case Bucket::TYPE_FIXED_LIMIT:
+                if ($allocationValue === null) {
+                    throw new InvalidArgumentException('Fixed limit buckets require an allocation value');
+                }
+                if ($allocationValue < 0) {
+                    throw new InvalidArgumentException('Fixed limit allocation value must be non-negative');
+                }
+                break;
+
+            case Bucket::TYPE_PERCENTAGE:
+                if ($allocationValue === null) {
+                    throw new InvalidArgumentException('Percentage buckets require an allocation value');
+                }
+                if ($allocationValue < 0.01 || $allocationValue > 100) {
+                    throw new InvalidArgumentException('Percentage allocation value must be between 0.01 and 100');
+                }
+                break;
+
+            case Bucket::TYPE_UNLIMITED:
+                // Unlimited buckets should not have an allocation value
+                // We'll set it to null in the main method regardless
+                break;
+        }
+    }
+}
\ No newline at end of file
diff --git a/app/Http/Controllers/BucketController.php b/app/Http/Controllers/BucketController.php
new file mode 100644
index 0000000..6142a05
--- /dev/null
+++ b/app/Http/Controllers/BucketController.php
@@ -0,0 +1,217 @@
+<?php
+
+namespace App\Http\Controllers;
+
+use App\Actions\CreateBucketAction;
+use App\Models\Bucket;
+use App\Models\Scenario;
+use Illuminate\Http\JsonResponse;
+use Illuminate\Http\Request;
+use InvalidArgumentException;
+
+class BucketController extends Controller
+{
+    public function index(Scenario $scenario): JsonResponse
+    {
+        $buckets = $scenario->buckets()
+            ->orderedBySortOrder()
+            ->get()
+            ->map(function ($bucket) {
+                return [
+                    'id' => $bucket->id,
+                    'name' => $bucket->name,
+                    'priority' => $bucket->priority,
+                    'sort_order' => $bucket->sort_order,
+                    'allocation_type' => $bucket->allocation_type,
+                    'allocation_value' => $bucket->allocation_value,
+                    'allocation_type_label' => $bucket->getAllocationTypeLabel(),
+                    'formatted_allocation_value' => $bucket->getFormattedAllocationValue(),
+                    'current_balance' => $bucket->getCurrentBalance(),
+                    'has_available_space' => $bucket->hasAvailableSpace(),
+                    'available_space' => $bucket->getAvailableSpace(),
+                ];
+            });
+
+        return response()->json([
+            'buckets' => $buckets
+        ]);
+    }
+
+    public function store(Request $request, Scenario $scenario): JsonResponse
+    {
+        $validated = $request->validate([
+            'name' => 'required|string|max:255',
+            'allocation_type' => 'required|in:' . implode(',', [
+                Bucket::TYPE_FIXED_LIMIT,
+                Bucket::TYPE_PERCENTAGE,
+                Bucket::TYPE_UNLIMITED,
+            ]),
+            'allocation_value' => 'nullable|numeric',
+            'priority' => 'nullable|integer|min:1',
+        ]);
+
+        try {
+            $createBucketAction = new CreateBucketAction();
+            $bucket = $createBucketAction->execute(
+                $scenario,
+                $validated['name'],
+                $validated['allocation_type'],
+                $validated['allocation_value'],
+                $validated['priority'] ?? null
+            );
+
+            return response()->json([
+                'bucket' => $this->formatBucketResponse($bucket),
+                'message' => 'Bucket created successfully.'
+            ], 201);
+        } catch (InvalidArgumentException $e) {
+            return response()->json([
+                'message' => 'Validation failed.',
+                'errors' => ['allocation_value' => [$e->getMessage()]]
+            ], 422);
+        }
+    }
+
+    public function update(Request $request, Bucket $bucket): JsonResponse
+    {
+        $validated = $request->validate([
+            'name' => 'required|string|max:255',
+            'allocation_type' => 'required|in:' . implode(',', [
+                Bucket::TYPE_FIXED_LIMIT,
+                Bucket::TYPE_PERCENTAGE,
+                Bucket::TYPE_UNLIMITED,
+            ]),
+            'allocation_value' => 'nullable|numeric',
+            'priority' => 'nullable|integer|min:1',
+        ]);
+
+        // Validate allocation_value based on allocation_type
+        $allocationValueRules = Bucket::allocationValueRules($validated['allocation_type']);
+        $request->validate([
+            'allocation_value' => $allocationValueRules,
+        ]);
+
+        // Set allocation_value to null for unlimited buckets
+        if ($validated['allocation_type'] === Bucket::TYPE_UNLIMITED) {
+            $validated['allocation_value'] = null;
+        }
+
+        // Handle priority change if needed
+        if (isset($validated['priority']) && $validated['priority'] !== $bucket->priority) {
+            $this->updateBucketPriority($bucket, $validated['priority']);
+            $validated['sort_order'] = $validated['priority'];
+        }
+
+        $bucket->update($validated);
+
+        return response()->json([
+            'bucket' => $this->formatBucketResponse($bucket),
+            'message' => 'Bucket updated successfully.'
+        ]);
+    }
+
+    /**
+     * Remove the specified bucket.
+     */
+    public function destroy(Bucket $bucket): JsonResponse
+    {
+        $scenarioId = $bucket->scenario_id;
+        $deletedPriority = $bucket->priority;
+
+        $bucket->delete();
+
+        // Shift remaining priorities down to fill the gap
+        $this->shiftPrioritiesDown($scenarioId, $deletedPriority);
+
+        return response()->json([
+            'message' => 'Bucket deleted successfully.'
+        ]);
+    }
+
+    /**
+     * Update bucket priorities (for drag-and-drop reordering).
+     */
+    public function updatePriorities(Request $request, Scenario $scenario): JsonResponse
+    {
+        $validated = $request->validate([
+            'bucket_priorities' => 'required|array',
+            'bucket_priorities.*.id' => 'required|exists:buckets,id',
+            'bucket_priorities.*.priority' => 'required|integer|min:1',
+        ]);
+
+        foreach ($validated['bucket_priorities'] as $bucketData) {
+            $bucket = Bucket::find($bucketData['id']);
+            if ($bucket && $bucket->scenario_id === $scenario->id) {
+                $bucket->update([
+                    'priority' => $bucketData['priority'],
+                    'sort_order' => $bucketData['priority'],
+                ]);
+            }
+        }
+
+        return response()->json([
+            'message' => 'Bucket priorities updated successfully.'
+        ]);
+    }
+
+    /**
+     * Format bucket data for JSON response.
+     */
+    private function formatBucketResponse(Bucket $bucket): array
+    {
+        return [
+            'id' => $bucket->id,
+            'name' => $bucket->name,
+            'priority' => $bucket->priority,
+            'sort_order' => $bucket->sort_order,
+            'allocation_type' => $bucket->allocation_type,
+            'allocation_value' => $bucket->allocation_value,
+            'allocation_type_label' => $bucket->getAllocationTypeLabel(),
+            'formatted_allocation_value' => $bucket->getFormattedAllocationValue(),
+            'current_balance' => $bucket->getCurrentBalance(),
+            'has_available_space' => $bucket->hasAvailableSpace(),
+            'available_space' => $bucket->getAvailableSpace(),
+        ];
+    }
+
+
+    /**
+     * Shift priorities down to fill gap after deletion.
+     */
+    private function shiftPrioritiesDown(int $scenarioId, int $deletedPriority): void
+    {
+        Bucket::query()
+            ->where('scenario_id', $scenarioId)
+            ->where('priority', '>', $deletedPriority)
+            ->decrement('priority');
+    }
+
+    /**
+     * Update a bucket's priority and adjust other buckets accordingly.
+     */
+    private function updateBucketPriority(Bucket $bucket, int $newPriority): void
+    {
+        $oldPriority = $bucket->priority;
+        $scenario = $bucket->scenario;
+
+        if ($newPriority === $oldPriority) {
+            return;
+        }
+
+        if ($newPriority < $oldPriority) {
+            // Moving up - shift others down
+            $scenario->buckets()
+                ->where('id', '!=', $bucket->id)
+                ->whereBetween('priority', [$newPriority, $oldPriority - 1])
+                ->increment('priority');
+        } else {
+            // Moving down - shift others up
+            $scenario->buckets()
+                ->where('id', '!=', $bucket->id)
+                ->whereBetween('priority', [$oldPriority + 1, $newPriority])
+                ->decrement('priority');
+        }
+
+        $bucket->update(['priority' => $newPriority]);
+    }
+}
diff --git a/app/Http/Controllers/ScenarioController.php b/app/Http/Controllers/ScenarioController.php
index 5808802..4e3054e 100644
--- a/app/Http/Controllers/ScenarioController.php
+++ b/app/Http/Controllers/ScenarioController.php
@@ -2,6 +2,7 @@
 
 namespace App\Http\Controllers;
 
+use App\Actions\CreateBucketAction;
 use App\Models\Scenario;
 use Illuminate\Http\RedirectResponse;
 use Illuminate\Http\Request;
@@ -19,8 +20,27 @@ public function index(): Response
 
     public function show(Scenario $scenario): Response
     {
+        $scenario->load(['buckets' => function ($query) {
+            $query->orderedBySortOrder();
+        }]);
+
         return Inertia::render('Scenarios/Show', [
-            'scenario' => $scenario
+            'scenario' => $scenario,
+            'buckets' => $scenario->buckets->map(function ($bucket) {
+                return [
+                    'id' => $bucket->id,
+                    'name' => $bucket->name,
+                    'priority' => $bucket->priority,
+                    'sort_order' => $bucket->sort_order,
+                    'allocation_type' => $bucket->allocation_type,
+                    'allocation_value' => $bucket->allocation_value,
+                    'allocation_type_label' => $bucket->getAllocationTypeLabel(),
+                    'formatted_allocation_value' => $bucket->getFormattedAllocationValue(),
+                    'current_balance' => $bucket->getCurrentBalance(),
+                    'has_available_space' => $bucket->hasAvailableSpace(),
+                    'available_space' => $bucket->getAvailableSpace(),
+                ];
+            })
         ]);
     }
 
@@ -34,7 +54,9 @@ public function store(Request $request): RedirectResponse
             'name' => $request->name,
         ]);
 
-        // TODO: Create default buckets here (will implement later with bucket model)
+        // Create default buckets using the action
+        $createBucketAction = new CreateBucketAction();
+        $createBucketAction->createDefaultBuckets($scenario);
 
         return redirect()->route('scenarios.show', $scenario);
     }
diff --git a/app/Models/Bucket.php b/app/Models/Bucket.php
new file mode 100644
index 0000000..d29f91e
--- /dev/null
+++ b/app/Models/Bucket.php
@@ -0,0 +1,178 @@
+<?php
+
+namespace App\Models;
+
+use Database\Factories\BucketFactory;
+use Illuminate\Database\Eloquent\Factories\HasFactory;
+use Illuminate\Database\Eloquent\Model;
+use Illuminate\Database\Eloquent\Relations\BelongsTo;
+use Illuminate\Database\Eloquent\Relations\HasMany;
+
+/**
+ * @property int $scenario_id
+ * @property Scenario $scenario
+ * @property string $name
+ * @property int $priority
+ */
+class Bucket extends Model
+{
+    /** @use HasFactory<BucketFactory> */
+    use HasFactory;
+
+    protected $fillable = [
+        'scenario_id',
+        'name',
+        'priority',
+        'sort_order',
+        'allocation_type',
+        'allocation_value',
+    ];
+
+    protected $casts = [
+        'priority' => 'integer',
+        'sort_order' => 'integer',
+        'allocation_value' => 'decimal:2',
+    ];
+
+    // TODO Extract to Enum
+    const string TYPE_FIXED_LIMIT = 'fixed_limit';
+    const string TYPE_PERCENTAGE = 'percentage';
+    const string TYPE_UNLIMITED = 'unlimited';
+
+    public function scenario(): BelongsTo
+    {
+        return $this->belongsTo(Scenario::class);
+    }
+
+    /**
+     * Get the draws for the bucket.
+     * (Will be implemented when Draw model is created)
+     */
+    public function draws(): HasMany
+    {
+        // TODO: Implement when Draw model is created
+        return $this->hasMany(Draw::class);
+    }
+
+    /**
+     * Get the outflows for the bucket.
+     * (Will be implemented when Outflow model is created)
+     */
+    public function outflows(): HasMany
+    {
+        // TODO: Implement when Outflow model is created
+        return $this->hasMany(Outflow::class);
+    }
+
+    /**
+     * Scope to get buckets ordered by priority.
+     */
+    public function scopeOrderedByPriority($query)
+    {
+        return $query->orderBy('priority');
+    }
+
+    /**
+     * Scope to get buckets ordered by sort order for UI display.
+     */
+    public function scopeOrderedBySortOrder($query)
+    {
+        return $query->orderBy('sort_order')->orderBy('priority');
+    }
+
+    /**
+     * Get the current balance of the bucket.
+     * For MVP, this will always return 0 as we don't have transactions yet.
+     */
+    public function getCurrentBalance(): float
+    {
+        // TODO: Calculate from draws minus outflows when those features are implemented
+        return 0.0;
+    }
+
+    /**
+     * Check if the bucket can accept more money (for fixed_limit buckets).
+     */
+    public function hasAvailableSpace(): bool
+    {
+        if ($this->allocation_type !== self::TYPE_FIXED_LIMIT) {
+            return true;
+        }
+
+        return $this->getCurrentBalance() < $this->allocation_value;
+    }
+
+    /**
+     * Get available space for fixed_limit buckets.
+     */
+    public function getAvailableSpace(): float
+    {
+        if ($this->allocation_type !== self::TYPE_FIXED_LIMIT) {
+            return PHP_FLOAT_MAX;
+        }
+
+        return max(0, $this->allocation_value - $this->getCurrentBalance());
+    }
+
+    /**
+     * Get display label for allocation type.
+     */
+    public function getAllocationTypeLabel(): string
+    {
+        return match($this->allocation_type) {
+            self::TYPE_FIXED_LIMIT => 'Fixed Limit',
+            self::TYPE_PERCENTAGE => 'Percentage',
+            self::TYPE_UNLIMITED => 'Unlimited',
+            default => 'Unknown',
+        };
+    }
+
+    /**
+     * Get formatted allocation value for display.
+     */
+    public function getFormattedAllocationValue(): string
+    {
+        return match($this->allocation_type) {
+            self::TYPE_FIXED_LIMIT => '$' . number_format($this->allocation_value, 2),
+            self::TYPE_PERCENTAGE => number_format($this->allocation_value, 2) . '%',
+            self::TYPE_UNLIMITED => 'All remaining',
+            default => '-',
+        };
+    }
+
+    /**
+     * Validation rules for bucket creation/update.
+     */
+    public static function validationRules($scenarioId = null): array
+    {
+        $rules = [
+            'name' => 'required|string|max:255',
+            'allocation_type' => 'required|in:' . implode(',', [
+                self::TYPE_FIXED_LIMIT,
+                self::TYPE_PERCENTAGE,
+                self::TYPE_UNLIMITED,
+            ]),
+            'priority' => 'required|integer|min:1',
+        ];
+
+        // Add scenario-specific priority uniqueness if scenario ID provided
+        if ($scenarioId) {
+            $rules['priority'] .= '|unique:buckets,priority,NULL,id,scenario_id,' . $scenarioId;
+        }
+
+        return $rules;
+    }
+
+    /**
+     * Get allocation value validation rules based on type.
+     */
+    public static function allocationValueRules($allocationType): array
+    {
+        return match($allocationType) {
+            self::TYPE_FIXED_LIMIT => ['required', 'numeric', 'min:0'],
+            self::TYPE_PERCENTAGE => ['required', 'numeric', 'min:0.01', 'max:100'],
+            self::TYPE_UNLIMITED => ['nullable'],
+            default => ['nullable'],
+        };
+    }
+}
diff --git a/database/factories/BucketFactory.php b/database/factories/BucketFactory.php
new file mode 100644
index 0000000..b390035
--- /dev/null
+++ b/database/factories/BucketFactory.php
@@ -0,0 +1,123 @@
+<?php
+
+namespace Database\Factories;
+
+use App\Models\Bucket;
+use App\Models\Scenario;
+use Illuminate\Database\Eloquent\Factories\Factory;
+
+/**
+ * @extends Factory<Bucket>
+ */
+class BucketFactory extends Factory
+{
+    public function definition(): array
+    {
+        $allocationType = $this->faker->randomElement([
+            Bucket::TYPE_FIXED_LIMIT,
+            Bucket::TYPE_PERCENTAGE,
+            Bucket::TYPE_UNLIMITED,
+        ]);
+
+        return [
+            'scenario_id' => Scenario::factory(),
+            'name' => $this->faker->randomElement([
+                'Monthly Expenses',
+                'Emergency Fund',
+                'Investments',
+                'Vacation Fund',
+                'Car Maintenance',
+                'Home Repairs',
+                'Health & Medical',
+                'Education',
+                'Entertainment',
+                'Groceries',
+                'Clothing',
+                'Gifts',
+            ]),
+            'priority' => $this->faker->numberBetween(1, 10),
+            'sort_order' => $this->faker->numberBetween(0, 10),
+            'allocation_type' => $allocationType,
+            'allocation_value' => $this->getAllocationValueForType($allocationType),
+        ];
+    }
+
+    /**
+     * Create a fixed limit bucket.
+     */
+    public function fixedLimit($amount = null): Factory
+    {
+        $amount = $amount ?? $this->faker->numberBetween(500, 5000);
+        
+        return $this->state([
+            'allocation_type' => Bucket::TYPE_FIXED_LIMIT,
+            'allocation_value' => $amount,
+        ]);
+    }
+
+    /**
+     * Create a percentage bucket.
+     */
+    public function percentage($percentage = null): Factory
+    {
+        $percentage = $percentage ?? $this->faker->numberBetween(10, 50);
+        
+        return $this->state([
+            'allocation_type' => Bucket::TYPE_PERCENTAGE,
+            'allocation_value' => $percentage,
+        ]);
+    }
+
+    /**
+     * Create an unlimited bucket.
+     */
+    public function unlimited(): Factory
+    {
+        return $this->state([
+            'allocation_type' => Bucket::TYPE_UNLIMITED,
+            'allocation_value' => null,
+        ]);
+    }
+
+    /**
+     * Create default buckets set (Monthly Expenses, Emergency Fund, Investments).
+     */
+    public function defaultSet(): array
+    {
+        return [
+            $this->state([
+                'name' => 'Monthly Expenses',
+                'priority' => 1,
+                'sort_order' => 1,
+                'allocation_type' => Bucket::TYPE_FIXED_LIMIT,
+                'allocation_value' => 0,
+            ]),
+            $this->state([
+                'name' => 'Emergency Fund',
+                'priority' => 2,
+                'sort_order' => 2,
+                'allocation_type' => Bucket::TYPE_FIXED_LIMIT,
+                'allocation_value' => 0,
+            ]),
+            $this->state([
+                'name' => 'Investments',
+                'priority' => 3,
+                'sort_order' => 3,
+                'allocation_type' => Bucket::TYPE_UNLIMITED,
+                'allocation_value' => null,
+            ]),
+        ];
+    }
+
+    /**
+     * Get allocation value based on type.
+     */
+    private function getAllocationValueForType(string $type): ?float
+    {
+        return match($type) {
+            Bucket::TYPE_FIXED_LIMIT => $this->faker->numberBetween(100, 10000),
+            Bucket::TYPE_PERCENTAGE => $this->faker->numberBetween(5, 50),
+            Bucket::TYPE_UNLIMITED => null,
+        };
+    }
+}
\ No newline at end of file
diff --git a/database/migrations/2025_12_29_205724_create_buckets_table.php b/database/migrations/2025_12_29_205724_create_buckets_table.php
new file mode 100644
index 0000000..03e74cd
--- /dev/null
+++ b/database/migrations/2025_12_29_205724_create_buckets_table.php
@@ -0,0 +1,32 @@
+<?php
+
+use Illuminate\Database\Migrations\Migration;
+use Illuminate\Database\Schema\Blueprint;
+use Illuminate\Support\Facades\Schema;
+
+return new class extends Migration
+{
+    public function up(): void
+    {
+        Schema::create('buckets', function (Blueprint $table) {
+            $table->id();
+            $table->foreignId('scenario_id')->constrained()->onDelete('cascade');
+            $table->string('name');
+            $table->integer('priority')->comment('Lower number = higher priority, 1 = first');
+            $table->integer('sort_order')->default(0)->comment('For UI display ordering');
+            $table->enum('allocation_type', ['fixed_limit', 'percentage', 'unlimited']);
+            $table->decimal('allocation_value', 10, 2)->nullable()
+                ->comment('Limit amount for fixed_limit, percentage for percentage type, NULL for unlimited');
+            $table->timestamps();
+
+            // Indexes for performance
+            $table->index(['scenario_id', 'priority']);
+            $table->unique(['scenario_id', 'priority'], 'unique_scenario_priority');
+        });
+    }
+
+    public function down(): void
+    {
+        Schema::dropIfExists('buckets');
+    }
+};
diff --git a/resources/js/pages/Scenarios/Show.tsx b/resources/js/pages/Scenarios/Show.tsx
index f0ce8b4..bd61c21 100644
--- a/resources/js/pages/Scenarios/Show.tsx
+++ b/resources/js/pages/Scenarios/Show.tsx
@@ -1,4 +1,5 @@
-import { Head, Link } from '@inertiajs/react';
+import { Head, Link, router } from '@inertiajs/react';
+import { useState } from 'react';
 
 interface Scenario {
     id: number;
@@ -7,11 +8,67 @@ interface Scenario {
     updated_at: string;
 }
 
-interface Props {
-    scenario: Scenario;
+interface Bucket {
+    id: number;
+    name: string;
+    priority: number;
+    sort_order: number;
+    allocation_type: string;
+    allocation_value: number | null;
+    allocation_type_label: string;
+    formatted_allocation_value: string;
+    current_balance: number;
+    has_available_space: boolean;
+    available_space: number;
 }
 
-export default function Show({ scenario }: Props) {
+interface Props {
+    scenario: Scenario;
+    buckets: Bucket[];
+}
+
+export default function Show({ scenario, buckets }: Props) {
+    const [isModalOpen, setIsModalOpen] = useState(false);
+    const [isSubmitting, setIsSubmitting] = useState(false);
+    const [formData, setFormData] = useState({
+        name: '',
+        allocation_type: 'fixed_limit',
+        allocation_value: ''
+    });
+
+    const handleSubmit = async (e: React.FormEvent) => {
+        e.preventDefault();
+        setIsSubmitting(true);
+
+        try {
+            const response = await fetch(`/scenarios/${scenario.id}/buckets`, {
+                method: 'POST',
+                headers: {
+                    'Content-Type': 'application/json',
+                    'X-CSRF-TOKEN': document.querySelector('meta[name="csrf-token"]')?.getAttribute('content') || '',
+                },
+                body: JSON.stringify({
+                    name: formData.name,
+                    allocation_type: formData.allocation_type,
+                    allocation_value: formData.allocation_value ? parseFloat(formData.allocation_value) : null
+                }),
+            });
+
+            if (response.ok) {
+                setIsModalOpen(false);
+                setFormData({ name: '', allocation_type: 'fixed_limit', allocation_value: '' });
+                router.reload({ only: ['buckets'] });
+            } else {
+                const errorData = await response.json();
+                console.error('Failed to create bucket:', errorData);
+            }
+        } catch (error) {
+            console.error('Error creating bucket:', error);
+        } finally {
+            setIsSubmitting(false);
+        }
+    };
+
     return (
         <>
             <Head title={scenario.name} />
@@ -39,30 +96,197 @@ export default function Show({ scenario }: Props) {
                         </div>
                     </div>
 
-                    {/* Coming Soon Content */}
-                    <div className="rounded-lg bg-white p-12 text-center shadow">
-                        <div className="mx-auto h-16 w-16 text-blue-600">
-                            <svg fill="none" viewBox="0 0 24 24" stroke="currentColor">
-                                <path strokeLinecap="round" strokeLinejoin="round" strokeWidth={1} d="M13 10V3L4 14h7v7l9-11h-7z" />
-                            </svg>
-                        </div>
-                        <h2 className="mt-4 text-xl font-semibold text-gray-900">
-                            Scenario Dashboard Coming Soon
-                        </h2>
-                        <p className="mt-2 text-gray-600">
-                            This will show buckets, streams, timeline, and calculation controls
-                        </p>
-                        <div className="mt-6">
-                            <Link
-                                href="/"
+                    {/* Bucket Dashboard */}
+                    <div className="space-y-6">
+                        <div className="flex items-center justify-between">
+                            <h2 className="text-xl font-semibold text-gray-900">Buckets</h2>
+                            <button 
+                                onClick={() => setIsModalOpen(true)}
                                 className="rounded-md bg-blue-600 px-4 py-2 text-sm font-semibold text-white hover:bg-blue-500"
                             >
-                                Return to Scenarios
-                            </Link>
+                                + Add Bucket
+                            </button>
+                        </div>
+                        
+                        <div className="grid gap-6 sm:grid-cols-2 lg:grid-cols-3">
+                            {buckets.map((bucket) => (
+                                <div
+                                    key={bucket.id}
+                                    className="rounded-lg bg-white p-6 shadow transition-shadow hover:shadow-lg border-l-4 border-blue-500"
+                                >
+                                    <div className="flex items-start justify-between">
+                                        <div className="flex-1">
+                                            <h3 className="text-lg font-semibold text-gray-900">
+                                                {bucket.name}
+                                            </h3>
+                                            <p className="text-sm text-gray-600 mt-1">
+                                                Priority {bucket.priority} • {bucket.allocation_type_label}
+                                            </p>
+                                        </div>
+                                        <span className="rounded-full bg-blue-100 px-2.5 py-0.5 text-xs font-medium text-blue-800">
+                                            #{bucket.priority}
+                                        </span>
+                                    </div>
+                                    
+                                    <div className="mt-4">
+                                        <div className="flex items-center justify-between">
+                                            <span className="text-sm text-gray-600">Current Balance</span>
+                                            <span className="text-lg font-semibold text-gray-900">
+                                                ${bucket.current_balance.toFixed(2)}
+                                            </span>
+                                        </div>
+                                        
+                                        <div className="mt-2">
+                                            <span className="text-sm text-gray-600">
+                                                Allocation: {bucket.formatted_allocation_value}
+                                            </span>
+                                        </div>
+                                        
+                                        {bucket.allocation_type === 'fixed_limit' && (
+                                            <div className="mt-3">
+                                                <div className="flex justify-between text-sm">
+                                                    <span>Progress</span>
+                                                    <span>
+                                                        ${bucket.current_balance.toFixed(2)} / ${Number(bucket.allocation_value)?.toFixed(2)}
+                                                    </span>
+                                                </div>
+                                                <div className="mt-1 h-2 bg-gray-200 rounded-full">
+                                                    <div 
+                                                        className="h-2 bg-blue-600 rounded-full transition-all"
+                                                        style={{
+                                                            width: `${bucket.allocation_value ? Math.min((bucket.current_balance / Number(bucket.allocation_value)) * 100, 100) : 0}%`
+                                                        }}
+                                                    />
+                                                </div>
+                                            </div>
+                                        )}
+                                    </div>
+                                    
+                                    <div className="mt-4 flex gap-2">
+                                        <button className="flex-1 text-sm text-blue-600 hover:text-blue-500">
+                                            Edit
+                                        </button>
+                                        <button className="flex-1 text-sm text-red-600 hover:text-red-500">
+                                            Delete
+                                        </button>
+                                    </div>
+                                </div>
+                            ))}
+                            
+                            {/* Virtual Overflow Bucket (placeholder for now) */}
+                            <div className="rounded-lg bg-gray-50 p-6 border-2 border-dashed border-gray-300">
+                                <div className="text-center">
+                                    <div className="mx-auto h-8 w-8 text-gray-400">
+                                        <svg fill="none" viewBox="0 0 24 24" stroke="currentColor">
+                                            <path strokeLinecap="round" strokeLinejoin="round" strokeWidth={2} d="M12 6V4m0 2a2 2 0 100 4m0-4a2 2 0 110 4m-6 8a2 2 0 100-4m0 4a2 2 0 100 4m0-4v2m0-6V4m6 6v10m6-2a2 2 0 100-4m0 4a2 2 0 100 4m0-4v2m0-6V4" />
+                                        </svg>
+                                    </div>
+                                    <h3 className="mt-2 text-sm font-medium text-gray-500">
+                                        Overflow
+                                    </h3>
+                                    <p className="text-xs text-gray-400 mt-1">
+                                        Unallocated funds
+                                    </p>
+                                    <p className="text-lg font-semibold text-gray-600 mt-2">
+                                        $0.00
+                                    </p>
+                                </div>
+                            </div>
+                        </div>
+                        
+                        {/* Placeholder for future features */}
+                        <div className="rounded-lg bg-blue-50 p-6 text-center">
+                            <h3 className="text-lg font-medium text-blue-900">
+                                Coming Next: Streams & Timeline
+                            </h3>
+                            <p className="text-sm text-blue-700 mt-2">
+                                Add income and expense streams, then calculate projections to see your money flow through these buckets over time.
+                            </p>
                         </div>
                     </div>
                 </div>
             </div>
+
+            {/* Add Bucket Modal */}
+            {isModalOpen && (
+                <div className="fixed inset-0 bg-gray-600 bg-opacity-50 overflow-y-auto h-full w-full z-50">
+                    <div className="relative top-20 mx-auto p-5 border w-96 shadow-lg rounded-md bg-white">
+                        <div className="mt-3">
+                            <h3 className="text-lg font-medium text-gray-900 mb-4">Add New Bucket</h3>
+                            <form onSubmit={handleSubmit} className="space-y-4">
+                                <div>
+                                    <label htmlFor="name" className="block text-sm font-medium text-gray-700">
+                                        Bucket Name
+                                    </label>
+                                    <input
+                                        type="text"
+                                        id="name"
+                                        value={formData.name}
+                                        onChange={(e) => setFormData({ ...formData, name: e.target.value })}
+                                        className="mt-1 block w-full rounded-md border-gray-300 shadow-sm focus:border-blue-500 focus:ring-blue-500 text-gray-900"
+                                        placeholder="e.g., Travel Fund"
+                                        required
+                                    />
+                                </div>
+
+                                <div>
+                                    <label htmlFor="allocation_type" className="block text-sm font-medium text-gray-700">
+                                        Allocation Type
+                                    </label>
+                                    <select
+                                        id="allocation_type"
+                                        value={formData.allocation_type}
+                                        onChange={(e) => setFormData({ ...formData, allocation_type: e.target.value })}
+                                        className="mt-1 block w-full rounded-md border-gray-300 shadow-sm focus:border-blue-500 focus:ring-blue-500 text-gray-900"
+                                    >
+                                        <option value="fixed_limit">Fixed Limit</option>
+                                        <option value="percentage">Percentage</option>
+                                        <option value="unlimited">Unlimited</option>
+                                    </select>
+                                </div>
+
+                                {formData.allocation_type !== 'unlimited' && (
+                                    <div>
+                                        <label htmlFor="allocation_value" className="block text-sm font-medium text-gray-700">
+                                            {formData.allocation_type === 'percentage' ? 'Percentage (%)' : 'Amount ($)'}
+                                        </label>
+                                        <input
+                                            type="number"
+                                            id="allocation_value"
+                                            value={formData.allocation_value}
+                                            onChange={(e) => setFormData({ ...formData, allocation_value: e.target.value })}
+                                            className="mt-1 block w-full rounded-md border-gray-300 shadow-sm focus:border-blue-500 focus:ring-blue-500 text-gray-900"
+                                            placeholder={formData.allocation_type === 'percentage' ? '25' : '1000'}
+                                            step={formData.allocation_type === 'percentage' ? '0.01' : '0.01'}
+                                            min={formData.allocation_type === 'percentage' ? '0.01' : '0'}
+                                            max={formData.allocation_type === 'percentage' ? '100' : undefined}
+                                            required
+                                        />
+                                    </div>
+                                )}
+
+                                <div className="flex gap-3 pt-4">
+                                    <button
+                                        type="button"
+                                        onClick={() => setIsModalOpen(false)}
+                                        className="flex-1 px-4 py-2 text-sm font-medium text-gray-700 bg-gray-200 rounded-md hover:bg-gray-300"
+                                        disabled={isSubmitting}
+                                    >
+                                        Cancel
+                                    </button>
+                                    <button
+                                        type="submit"
+                                        className="flex-1 px-4 py-2 text-sm font-medium text-white bg-blue-600 rounded-md hover:bg-blue-700 disabled:opacity-50"
+                                        disabled={isSubmitting}
+                                    >
+                                        {isSubmitting ? 'Creating...' : 'Create Bucket'}
+                                    </button>
+                                </div>
+                            </form>
+                        </div>
+                    </div>
+                </div>
+            )}
         </>
     );
 }
\ No newline at end of file
diff --git a/resources/views/app.blade.php b/resources/views/app.blade.php
index c84bff7..8fbdc96 100644
--- a/resources/views/app.blade.php
+++ b/resources/views/app.blade.php
@@ -3,6 +3,7 @@
     <head>
         <meta charset="utf-8">
         <meta name="viewport" content="width=device-width, initial-scale=1">
+        <meta name="csrf-token" content="{{ csrf_token() }}">
 
         {{-- Inline script to detect system dark mode preference and apply it immediately --}}
         <script>
diff --git a/routes/web.php b/routes/web.php
index 8e91046..dc66e76 100644
--- a/routes/web.php
+++ b/routes/web.php
@@ -1,5 +1,6 @@
 <?php
 
+use App\Http\Controllers\BucketController;
 use App\Http\Controllers\ScenarioController;
 use Illuminate\Support\Facades\Route;
 use Inertia\Inertia;
@@ -10,6 +11,13 @@
 Route::get('/scenarios/{scenario}', [ScenarioController::class, 'show'])->name('scenarios.show');
 Route::post('/scenarios', [ScenarioController::class, 'store'])->name('scenarios.store');
 
+// Bucket routes (no auth required for MVP)
+Route::get('/scenarios/{scenario}/buckets', [BucketController::class, 'index'])->name('buckets.index');
+Route::post('/scenarios/{scenario}/buckets', [BucketController::class, 'store'])->name('buckets.store');
+Route::patch('/buckets/{bucket}', [BucketController::class, 'update'])->name('buckets.update');
+Route::delete('/buckets/{bucket}', [BucketController::class, 'destroy'])->name('buckets.destroy');
+Route::patch('/scenarios/{scenario}/buckets/priorities', [BucketController::class, 'updatePriorities'])->name('buckets.update-priorities');
+
 Route::middleware(['auth', 'verified'])->group(function () {
     Route::get('dashboard', function () {
         return Inertia::render('dashboard');
diff --git a/tests/Unit/Actions/CreateBucketActionTest.php b/tests/Unit/Actions/CreateBucketActionTest.php
new file mode 100644
index 0000000..6ac8b16
--- /dev/null
+++ b/tests/Unit/Actions/CreateBucketActionTest.php
@@ -0,0 +1,269 @@
+<?php
+
+namespace Tests\Unit\Actions;
+
+use App\Actions\CreateBucketAction;
+use App\Models\Bucket;
+use App\Models\Scenario;
+use Illuminate\Foundation\Testing\RefreshDatabase;
+use InvalidArgumentException;
+use Tests\TestCase;
+
+class CreateBucketActionTest extends TestCase
+{
+    use RefreshDatabase;
+
+    private CreateBucketAction $action;
+    private Scenario $scenario;
+
+    protected function setUp(): void
+    {
+        parent::setUp();
+        $this->action = new CreateBucketAction();
+        $this->scenario = Scenario::factory()->create();
+    }
+
+    public function test_can_create_fixed_limit_bucket(): void
+    {
+        $bucket = $this->action->execute(
+            $this->scenario,
+            'Test Bucket',
+            Bucket::TYPE_FIXED_LIMIT,
+            1000.00
+        );
+
+        $this->assertInstanceOf(Bucket::class, $bucket);
+        $this->assertEquals('Test Bucket', $bucket->name);
+        $this->assertEquals(Bucket::TYPE_FIXED_LIMIT, $bucket->allocation_type);
+        $this->assertEquals(1000.00, $bucket->allocation_value);
+        $this->assertEquals(1, $bucket->priority);
+        $this->assertEquals(1, $bucket->sort_order);
+        $this->assertEquals($this->scenario->id, $bucket->scenario_id);
+    }
+
+    public function test_can_create_percentage_bucket(): void
+    {
+        $bucket = $this->action->execute(
+            $this->scenario,
+            'Percentage Bucket',
+            Bucket::TYPE_PERCENTAGE,
+            25.5
+        );
+
+        $this->assertEquals(Bucket::TYPE_PERCENTAGE, $bucket->allocation_type);
+        $this->assertEquals(25.5, $bucket->allocation_value);
+    }
+
+    public function test_can_create_unlimited_bucket(): void
+    {
+        $bucket = $this->action->execute(
+            $this->scenario,
+            'Unlimited Bucket',
+            Bucket::TYPE_UNLIMITED
+        );
+
+        $this->assertEquals(Bucket::TYPE_UNLIMITED, $bucket->allocation_type);
+        $this->assertNull($bucket->allocation_value);
+    }
+
+    public function test_unlimited_bucket_ignores_allocation_value(): void
+    {
+        $bucket = $this->action->execute(
+            $this->scenario,
+            'Unlimited Bucket',
+            Bucket::TYPE_UNLIMITED,
+            999.99 // This should be ignored and set to null
+        );
+
+        $this->assertEquals(Bucket::TYPE_UNLIMITED, $bucket->allocation_type);
+        $this->assertNull($bucket->allocation_value);
+    }
+
+    public function test_priority_auto_increments_when_not_specified(): void
+    {
+        $bucket1 = $this->action->execute(
+            $this->scenario,
+            'First Bucket',
+            Bucket::TYPE_FIXED_LIMIT,
+            100
+        );
+
+        $bucket2 = $this->action->execute(
+            $this->scenario,
+            'Second Bucket',
+            Bucket::TYPE_FIXED_LIMIT,
+            200
+        );
+
+        $this->assertEquals(1, $bucket1->priority);
+        $this->assertEquals(2, $bucket2->priority);
+    }
+
+    public function test_can_specify_custom_priority(): void
+    {
+        $bucket = $this->action->execute(
+            $this->scenario,
+            'Priority Bucket',
+            Bucket::TYPE_FIXED_LIMIT,
+            100,
+            5
+        );
+
+        $this->assertEquals(5, $bucket->priority);
+    }
+
+    public function test_existing_priorities_are_shifted_when_inserting(): void
+    {
+        // Create initial buckets
+        $bucket1 = $this->action->execute($this->scenario, 'Bucket 1', Bucket::TYPE_FIXED_LIMIT, 100, 1);
+        $bucket2 = $this->action->execute($this->scenario, 'Bucket 2', Bucket::TYPE_FIXED_LIMIT, 200, 2);
+        $bucket3 = $this->action->execute($this->scenario, 'Bucket 3', Bucket::TYPE_FIXED_LIMIT, 300, 3);
+
+        // Insert a bucket at priority 2
+        $newBucket = $this->action->execute($this->scenario, 'New Bucket', Bucket::TYPE_FIXED_LIMIT, 150, 2);
+
+        // Refresh models from database
+        $bucket1->refresh();
+        $bucket2->refresh();
+        $bucket3->refresh();
+
+        // Check that priorities were shifted correctly
+        $this->assertEquals(1, $bucket1->priority);
+        $this->assertEquals(2, $newBucket->priority);
+        $this->assertEquals(3, $bucket2->priority); // Shifted from 2 to 3
+        $this->assertEquals(4, $bucket3->priority); // Shifted from 3 to 4
+    }
+
+    public function test_throws_exception_for_invalid_allocation_type(): void
+    {
+        $this->expectException(InvalidArgumentException::class);
+        $this->expectExceptionMessage('Invalid allocation type: invalid_type');
+
+        $this->action->execute(
+            $this->scenario,
+            'Test Bucket',
+            'invalid_type',
+            100
+        );
+    }
+
+    public function test_throws_exception_for_fixed_limit_without_allocation_value(): void
+    {
+        $this->expectException(InvalidArgumentException::class);
+        $this->expectExceptionMessage('Fixed limit buckets require an allocation value');
+
+        $this->action->execute(
+            $this->scenario,
+            'Test Bucket',
+            Bucket::TYPE_FIXED_LIMIT,
+            null
+        );
+    }
+
+    public function test_throws_exception_for_negative_fixed_limit_value(): void
+    {
+        $this->expectException(InvalidArgumentException::class);
+        $this->expectExceptionMessage('Fixed limit allocation value must be non-negative');
+
+        $this->action->execute(
+            $this->scenario,
+            'Test Bucket',
+            Bucket::TYPE_FIXED_LIMIT,
+            -100
+        );
+    }
+
+    public function test_throws_exception_for_percentage_without_allocation_value(): void
+    {
+        $this->expectException(InvalidArgumentException::class);
+        $this->expectExceptionMessage('Percentage buckets require an allocation value');
+
+        $this->action->execute(
+            $this->scenario,
+            'Test Bucket',
+            Bucket::TYPE_PERCENTAGE,
+            null
+        );
+    }
+
+    public function test_throws_exception_for_percentage_below_minimum(): void
+    {
+        $this->expectException(InvalidArgumentException::class);
+        $this->expectExceptionMessage('Percentage allocation value must be between 0.01 and 100');
+
+        $this->action->execute(
+            $this->scenario,
+            'Test Bucket',
+            Bucket::TYPE_PERCENTAGE,
+            0.005
+        );
+    }
+
+    public function test_throws_exception_for_percentage_above_maximum(): void
+    {
+        $this->expectException(InvalidArgumentException::class);
+        $this->expectExceptionMessage('Percentage allocation value must be between 0.01 and 100');
+
+        $this->action->execute(
+            $this->scenario,
+            'Test Bucket',
+            Bucket::TYPE_PERCENTAGE,
+            101
+        );
+    }
+
+    public function test_throws_exception_for_negative_priority(): void
+    {
+        $this->expectException(InvalidArgumentException::class);
+        $this->expectExceptionMessage('Priority must be at least 1');
+
+        $this->action->execute(
+            $this->scenario,
+            'Test Bucket',
+            Bucket::TYPE_FIXED_LIMIT,
+            100,
+            0
+        );
+    }
+
+    public function test_create_default_buckets(): void
+    {
+        $this->action->createDefaultBuckets($this->scenario);
+
+        $buckets = $this->scenario->buckets()->orderBy('priority')->get();
+
+        $this->assertCount(3, $buckets);
+
+        // Monthly Expenses
+        $this->assertEquals('Monthly Expenses', $buckets[0]->name);
+        $this->assertEquals(1, $buckets[0]->priority);
+        $this->assertEquals(Bucket::TYPE_FIXED_LIMIT, $buckets[0]->allocation_type);
+        $this->assertEquals(0, $buckets[0]->allocation_value);
+
+        // Emergency Fund
+        $this->assertEquals('Emergency Fund', $buckets[1]->name);
+        $this->assertEquals(2, $buckets[1]->priority);
+        $this->assertEquals(Bucket::TYPE_FIXED_LIMIT, $buckets[1]->allocation_type);
+        $this->assertEquals(0, $buckets[1]->allocation_value);
+
+        // Investments
+        $this->assertEquals('Investments', $buckets[2]->name);
+        $this->assertEquals(3, $buckets[2]->priority);
+        $this->assertEquals(Bucket::TYPE_UNLIMITED, $buckets[2]->allocation_type);
+        $this->assertNull($buckets[2]->allocation_value);
+    }
+
+    public function test_creates_buckets_in_database_transaction(): void
+    {
+        // This test ensures database consistency by creating multiple buckets
+        // and verifying they all exist with correct priorities
+        $this->action->execute($this->scenario, 'Bucket 1', Bucket::TYPE_FIXED_LIMIT, 100, 1);
+        $this->action->execute($this->scenario, 'Bucket 2', Bucket::TYPE_FIXED_LIMIT, 200, 1); // Insert at priority 1
+
+        // Both buckets should exist with correct priorities
+        $buckets = $this->scenario->buckets()->orderBy('priority')->get();
+        $this->assertCount(2, $buckets);
+        $this->assertEquals('Bucket 2', $buckets[0]->name); // New bucket at priority 1
+        $this->assertEquals('Bucket 1', $buckets[1]->name); // Original bucket shifted to priority 2
+    }
+}
\ No newline at end of file