2025 Sinking Funds

[@BrittanyFlammer]

What sinking funds do you have?

[@charity7273]

Car maintenance, home maintenance, Christmas, Gifts, Vacation, Health, House taxes, Employee appreciation, utilities, yearly subscriptions, and self care

[@BrittanyFlammer]

@@charity7273 awesome - I love those! do you own your own business?

[@jeanettemccay]

I’m using capital one as I like having separate savings account and can make,e them I have vacation im doing groceries etc too

[@PSUhockeygirl]

Counterpoint: assuming you can swing the cashflow, you can still pay out of pocket for your healthcare needs and use your HSA as a triple-tax advantaged investment account that you don't touch until retirement. 1. gives you more $$ for healthcare in retirement--including long term care and it remains tax-free PLUS 2. Once you're 65, you can use it tax free as well by 'reimbursing' yourself for those earlier expenses. So, say you're 65 in 2045. In 2045 you withdraw the $5000 you paid out of pocket for X medical thing in 2025 and claim it as a reimbursement for that 2025 expense. The IRS considers that a medical expense and does not apply taxes to it even though you're going to use that $5,000 on a vacation. I had an HSA for years before I knew I could do this so just passing it along!

[@BrittanyFlammer]

Yes- so many people don’t know about the triple tax advantage of the HSA. I’m glad you do! Our current employer just started offering it and I’m thrilled!! We contribute more than we need for medical expenses, but I wish we could contribute more and still cash flow any medical expenses! Thanks for sharing!!

[@DavidKnicks]

Great stuff!! Thanks for teaching peope!

[@BrittanyFlammer]

Of course! I just hope the videos are helpful!

[@yessdls]

Health extra expenses, family gifts/minor home maintenance, and events/leisure (going out or games and extra order for a fun staycation) ❤🎉 Thanks for the lovely video!

[@BrittanyFlammer]

That’s great. Thanks for sharing!?

[@chandrawong8731]

I’m curious how much you have in your emergency fund. What is a safe amount to aim for? Thanks for sharing your knowledge. Great timing for the beginning of the year.

[@BrittanyFlammer]

3-6 months of living expenses is the ideal for an emergency fund. We have 6 months set aside, but it’s a bare bones budget- we’d have to cut back on everything unnecessary to make it last 6 months.

[@T_Harding]

Brittany, thanks so much for these videos. Question on sinking funds: how do you handle starting a budget for the new year and having a large annual bill due say in February? Seems like you have to assume either (1) you must save the entire amount in 2 months or (2) you're using money from Savings and you "seed" the sinking fund at the beginning of the year's budget with the needed money. If #2, then going forward, the money saved in the sinking fund from March through January of the next year, is to pay the next year's bill. Is that right? Can you help more with the mechanics of sinking funds? Thanks!

[@BrittanyFlammer]

Great question. There are a few ways you could handle it. I try to plan ahead - for example we've got a large bill in January coming up, but I planned for it in my sinking funds the past year, so I've already got the money saved for it. That's ideal, but not always possible if you're just starting off with sinking funds. Also, I like to divide my sinking funds up by category. For example, if my vacation fund is $200/month and my house maintenance is $100/month I will transfer $200 into my vacation fund and $100 into my house maintenance fund. Alternatively you could transfer $300 into one big sinking fund. Then, if you've got a big bill due in February you would pull out of it, but then have a chance to save up again before another big purchase. I hope that helps some. Basically, it's not an exact science - it's just being conscience of upcoming expenses so you're not completely blindsided when a bill comes up. Sometimes I haven't had enough in a sinking fund and have borrowed from another.

[@T_Harding]

@ Thanks for the suggestions!

[@dominika____]

Just a semantic note at 1:15 minute, technically, the emergency fund is for emergencies some of which are unpredictable, so saying you are not planning to spend it is misleading.

[@BrittanyFlammer]

Yes - you're right.

[@aaronkor1032]

I was thinking about an auto replacement fund that rolled from year to year. How would you do this?

[@BrittanyFlammer]

Just add to it every month and at the end of the year the full amount would roll over. For a car - I would decide when I'd plan to replace the car and roughly how much it would cost. Say I want to spend $15,000 and I'll want it in 2 years. I'd do 1500/24and plan on setting aside $625/month.

[@aaronkor1032]

@@BrittanyFlammer sounds good. Thanks!