Kumiko Love Instagram – Let’s talk sinking funds!
I implemented sinking funds into my budget early on in my financial journey. Sinking funds are what allowed me to save towards things that I wanted to do, without feeling guilty that every last dime wasn’t going towards debt. I was able to save a small amount of money every single month, so by the time my event rolled around I was prepared in cash.
Sinking funds allow you to still do and spend money on things you enjoy, while still focusing on your other financial priorities.
When I first started paying off debt, I only had one sinking fund – Christmas. As I paid my debts off, I implemented more sinking funds into my budget. Now, I have multiple different sinking funds that I save for each month and I keep them in sinking fund cash envelopes or different savings accounts at my credit union (I keep the larger sinking funds at my credit union).
The purpose of a sinking fund is to essentially compartmentalize your income into your different sinking fund accounts, which will ultimately allow you to avoid dipping into your emergency fund.
What is one sinking fund you have implemented into your budget?
#thebudgetmom #sinkingfunds #tgif | Posted on 08/Apr/2025 00:25:29
