Kumiko Love Instagram – Sinking funds are used to save for (in advance) things that you KNOW are going to happen – birthdays, holidays, events, vacations, etc. If you know you’re going to be spending money outside of your regular budget for something, it’s smart to create a sinking fund for it. That way, you can save a little bit every single month or paycheck so you can be prepared for the expense when it comes around. If you have debt, you may be asking yourself, “how many sinking funds should I have? Do I pay off debt or implement sinking funds into my life?” Short answer – it’s up to YOU and YOUR financial priorities. My recommendation is to focus on your high-interest debt as a priority and put a little towards savings outside of your emergency fund. You CAN save and pay off debt. Remember, becoming debt-free isn’t just about being debt-free. It’s about staying out of debt in the future. So, if you know you’ll need the money for something like Christmas, for example, it’s smart to have a sinking fund for that so you don’t rely on your credit card when the time rolls around, ultimately putting you into more debt or back into debt. What is one sinking fund you have in 2024? Is there one you’re most excited about spending? #thebudgetmom #savingsgoals #savingstips #sinkingfunds #savemoney