EP. 27 What A Sinking Fund Is + Why You Need One

No one likes when an unexpected expense pops up and ruins their otherwise well-organized budget! So what do you do? Grab a credit card or dip into your emergency fund? NOPE…that’s what a Sinking Fund is for! Think of it as a big “Miscellaneous Fund” for things like Annual Bills, Holidays, and Home + Vehicle Repairs. I’m sharing what exactly a Sinking Fund is and how to set one up so these expenses won’t sneak up on you anymore.

In this episode, I share about:

What exactly a Sinking Fund is

How to budget for miscellaneous expenses that are unexpected but necessary

Why a Sinking Fund should be in addition to an Emergency Fund

What type of expenses belong in a Sinking Fund

Example of Sinking Fund categories (see examples below)

How much money and how often to contribute to your Sinking Fund

Where to keep your Sinking Fund (Savings, Debit, or Cash)

Where a Sinking Fund Belongs on your Budgeting Worksheets

How to perfect your Sinking Funds over the years

The main goal behind Sinking Funds

Examples of Sinking Fund Categories:

Large purchases

New Car

Weekend Events/Vacation

New computer or new phone

Holidays

Christmas, Halloween, Easter, Anniversaries, etc

Family, Friends, or Co-workers’ Birthdays

Wedding, Baby Showers, etc

Overlooked Expenses or Unexpected Events

Irregular Bills (Quarterly or Annually)

Insurance

Taxes (Income, Property, etc)

Annual Registrations or Licenses (Could be vehicle or job related)

Clothes (We shop seasonally)

Pets

Health (doctor’s visits, medicine and prescriptions, new glasses or contacts, braces)

Kids (Activities, extracurriculars, field trips, school supplies)

Maintenance + Repairs

Home (Maintenance and upkeep, HOA, property taxes, pest control, furniture replacement, and appliance repair)

Vehicle Maintenance (Maintenance and repairs, tires, oil change, car tag, toll fees)

Resources Mentioned:

Podcast Home Page

(A Sunny Side Up Life Podcast) EP. 03 How To Organize Your Bank Accounts

(Full Budgeting Course) Your Sunny Money Method

(Digital + Printable Budgeting Worksheets) Budgeting Starter Pack

My Instagram

My Facebook Community

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HEY I'M SAMI WOMACK

I'm the wife to my high school sweetheart, Daniel, + homeschooling momma to our 3 girls. I'm the Budgeting Coach + Motivational Speaker behind 
A Sunny Side Up Life.

My family used to be in $490k of debt + living paycheck-to-paycheck, but after we hit rock bottom everything changed for us!

Now that my family has become debt free + gained financial freedom, I want to help your family do the same! My passion is inspiring women to live abundant lives through budgeting, intentional living, and positive thinking.

I offer a jump start into budgeting with my free 8-day Declutter Your Budget Challenge + full budgeting experience with my course, Your Sunny Money Method.