How To Set Up Sinking Funds | Financial Goal Setting | Aja Dang

I'm Aja Dang and this video is all about how to build sinking funds for both monthly bills and trips! Saving up for things in advance is the best way to stay on financial track, especially if it's for a huge expense like a vacation/wedding/car. Thanks to Empower for sponsoring this video and download the Empower app using my link: bit.ly/Empower...
Empower is the money management app I’ve been using for a few years now. I trust the Empower Card* with my sinking funds, and I recommend you try it out because you get paid up to 2 days faster^, earn cashback up to 10%†, and can count on Cash Advance up to $250** with no interest or late fees if you’re ever in a jam between paychecks.
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[@AjaDang]

Just to reiterate - you do not need to have sinking funds for your monthly bills - I am a psycho. Focus on things that are most important to you. But please also remember, your sinking fund is NOT your emergency fund. Those are two different things with different purposes.

[@rdkllducky]

Pro tip: if you don't have friends you won't need to go to destination weddings.

[@AmbersJourney13]

Lol Def my life

[@yyyid9518]

😂

[@DebtFreeDee]

Bills saved for the year?! 😳 this is what I'm talking about! 💃🏾👏🏾 When I was paying off my consumer debt I couldn't get with sinking funds but before starting to pay off my mortgage debt, I started funding a couple and I REALLY like them! Great Beyonce-level vid! 😁

[@AjaDang]

sinking funds are the best! I didn't start mine until after I became debt free as well.

[@C_0873]

Off topic, but the BANGS! I love them.

[@kathleenannvincent9477]

I stayed up all night recreating all of the tracking sheets and being real with my budget. Love all the resources! Eyeing the release for more physical MSTRPLN and academic journal!

[@AjaDang]

launching August 2!

[@jenniferleth1187]

Your videos on personal finance are so encouraging. You've inspired me to get a hold of my finances and pay off my student loans aggressively! Thank you :)

[@AjaDang]

congrats on taking those steps!

[@idakramerjensen1249]

You're such a boss, thank you Aja! I really put my money into a proper system last year, because of you. I'm reaping the benefits now, being without income for months, and having my emergency fund and sinking funds saving my ass. Also I am taken ABACK by the cost of destination weddings - the balls it takes to encourage people to spend this kind of money 👀 I of course don't know the situation or full story, but just in general... That's a shit ton of money 🙈

[@V3Music23]

I have a sinking fund for everything from Christmas to getting my hair cut, I'm obsessed and it's changed my life! 💖

[@AjaDang]

glad we're both obsessed with sinking funds!

[@jneworleans]

The intro won me over! "The Beyoncé of sinking funds"

[@michellechristie6854]

I set up a sinking fund this year! Set aside funds to pay for my car insurance in august and funds for a wedding I'm in September. Definitely like saving money for specific events that I know will come up!

[@AjaDang]

yessss!

[@Elena-er7zp]

I can understand why Aja has a sinking fund for her bills - with the type of work she does, her income must fluctuate monthly. But for someone like me - who’s income is the same every single month and will only change if there is an emergency like illness or losing the job and then an EF would be used, a sinking fund for bills is unnecessary. My sinking funds are for home maintenance, a new-to-me car, travel, and then this lump account for gifts, holidays, annual things like flood insurance, auto insurance, car registration, car maintenance etc. Not nearly as organized as Aja but it works for me. :) Sinking funds really do relieve a lot of stress.

[@AjaDang]

sinking funds are the best!

[@candy2325]

I need to have a sinking fund just for eating out 😅 I cook at home often but those restaurants and eating out trips definitely add up especially with this summer weather when i want to go out every weekend. I just started putting money away in my vacation account and it’s great because I’m leaving for Cape Cod this weekend and I’m happy I have money put aside for it. I love budgeting and saving money, so this is fun for me When I go on vacation I hate penny pinching. I put enough aside so that I can enjoy my vacation rather than stressing about paying for every little thing 😓 I like to spend money on experiences/food so i always have a large cushion for those categories.

[@Nosilla928]

I don’t know, I am torn about sinking funds. I get it when you’re first getting started, someone like you with unpredictable monthly income, or a larger goal of course. Your point about prepaying bills makes sense if you can get a discount. Otherwise I’d rather just cashflow things as they come up and get the money working in the market instead of sitting in a bank account waiting…but really helpful explanations, thanks for a great video!

[@AjaDang]

how ever you feel most comfortable handing your money is 💯 the way you should go

[@Nosilla928]

@@AjaDang as the cliche goes, personal finance is personal! :) thanks again, have a great weekend!

[@missmalexa]

You inspired me to get my shit together and start budgeting with the new year. I told myself if you could pay off 200k that I could pay off $3k of credit card debt and $20k of student loans. I’m tackling my CC debt and I’m on track to finish paying it off in December:) I don’t know how or why I never budgeted before it has helped me so much

[@AjaDang]

YESSS!!! Congrats! You'll zero consumer debt for 2022 - how exciting is that?!

[@missmalexa]

Freeing lol

[@amandar5373]

Yessss I get so excited to see new aJa videos !

[@nerd09]

Trying to mentally prepare myself to look at all of my expenses and to not have an instant panic attack. Thank you for your videos and for the encouragement. ♥️

[@AjaDang]

the moment you look at your expenses, I promise you, you'll feel more empowered than panicked. You think you'll have a panic attack because you're avoiding it but once you face if head-on, you know how to tackle it (speaking from financial avoidance experience)

[@2brokenthumbs]

These are great financial habits. Your advice helps people enjoy themselves by relieving their financial stress from spending.

[@tinytarakeet]

this was soooo fascinating to watch you explain! definitely gonna spend a weekend to organize my sinking funds after this!

[@AjaDang]

it's honestly pretty fun.

[@C_0873]

on topic. I really needed this. I'm working towards getting sinking funds for my insurance. I've always paid monthly and I hate having it take up space in my head every month.

[@AjaDang]

it'll be a game changer

[@swabrren]

This was super helpful, thank you! Laid mine out in google sheets.

[@amandawong638]

I can’t wait to start creating my sinking funds. My goal in 2022 is to be more financially responsible and your videos are such a big help. Thank you for breaking it down to where it’s not so scary!

[@oleanderwyvern]

I've just been calling sinking funds "subsavings" because my credit union allows me to open as many subsavings as I want for free and I can name them whatever I want. Got my first double-digit per hour job this year and immediately set up automatic distributions for any "excess" income to the subsavings/sinking funds, each of which is named after a goal (I have....11? I think? Everything from car maintenance/repair to clothing to travel to wedding decor/vendors/bride&groom expenses). It's been SUCH a lifesaver. And of course I'm working on my emergency fund too. If it's a goal with an endpoint, like the wedding, I already have plans for what to rename the subsavings when the goal is reached.

[@mikailagray]

This is great for me right now, my sister and her best friend are doing a 30th bday trip and I and her friends sister are coming too. It’s a Europe trip so I’ve got to start saving now

[@amandale8761]

This video came in divine timing!!!!! I’m one paycheque from being debt free and needed a nudge of information in the right direction!!!! Emergency fund then sinking funds… so excited!!!!!

[@littlemichellebelle]

Congratulations!

[@Ohole]

A sinking fund is for expensive items you are saving for, like a gucci bag for Christmas 🎄 I’m so confused, sinking funds for bills? What kind of bills?

[@xleaz]

I don’t get it for bills either… I pay for bills monthly so I just pay them monthly…. Not really “saving” any money since I pay it already? Am I missing something? 😅 AJA - please help explain the differences 😭😭😭

[@michellesobiech8463]

Greetings from CLT -- Charlotte is not walkable. Coming from CA it was probably the biggest adjustment, also not bike friendly city. Food recommendations: Kindred in Davidson is absolutely worth the drive/Uber, Haberdish in NoDa has fantastic brunch with great cocktails (the heirloom Bloody Mary is a serious chef's kiss moment). Hope you enjoy the Queen City and how sweet everyone here can be!

[@AjaDang]

thank you!!! How about anything fun to do for our free Friday?

[@DearDebt]

Love this video. Sinking funds are such an important part of a budget. They have saved our budget multiple times this year when we had things come up that needed to be dealt with, especially as home owners things are constantly popping up it feels like! 😩

[@AjaDang]

and you're able to save for sinking funds while still kicking debts ass

[@DearDebt]

@@AjaDang yes ma’am 😍❤️❤️❤️

[@NancyLiliG]

I juuuuuust realized that I’ve been using my emergency savings as sinking funds 😅 Yes, this distinction and separation is useful! Thank you!

[@AjaDang]

omg omg! so happy I could clear that up for you! That would've been such a bummer if you had spent your emergency fund money on sinking fund purchases!

[@aznpridebuhhd]

I really enjoyed this video! Both explaining what a sinking fund is, and showing us a real example of a sinking fund was super helpful!

[@briiii64]

For charlotte I recommend renting a car, my fiance and I also book with Turo and have always had the BEST experiences and you can always find good deals!

[@tiffanymorris7399]

Have you considered getting a credit card with points to filter all your expenses through and then you would be able to cover flights and/or hotel for free?

[@amathisporter]

I am in the middle of paying off my CC debt & i am glad to see that I am using sinking funds right for my situation right now. I am so ready to be done paying off my CC, so I can get really into sinking funds. I have a long list of things I want to save/invest for!

[@lee-13]

Can’t wait for you to be done 🎉

[@amathisporter]

@@lee-13 thanks!!!

[@Porcelynnn]

I love sinking funds! I like using Ally bank with their 10 buckets feature.

[@Memelovespeace]

I need to start doing sinking funds again. I was comfortable cash flowing things until multiple things came up and made my budget tight. Don’t like that feeling at all.

[@AliseSloan]

OMG the sinking fund for your vacay next year totally inspired me. Thank you! Using this for Europe next year.

[@AjaDang]

omg - aboslutely start a sinking fund for your European adventure!

[@corinnenewtoncastro6607]

Great video!

[@shannoncordey1951]

❤️ I needed this info

[@sweetypashmaloo]

Hi Aja - great video! Curious where you park your down payment ✅ Trying to figure out the best option for ourselves here so any insight would be helpful, TIA🙏✨

[@AjaDang]

my down payment is in a brokerage account. 70% in bonds, 30% in stocks - that way I can get some growth and whenever we're ready to buy, I won't be too worried about a possible dip in the stock market.

[@nataliewong5291]

10:31 subtle product placement HAHA

[@kellylincoln8244]

This is so helpful!

[@AjaDang]

so glad to hear that!

[@teneshaanderson4761]

Look unless you have the money originally then your screwed if your income is not high enough there is no money left over

[@leafkat7827]

Aja is the Beyoncé of all finance youtubers 👑

[@AjaDang]

omg. *CRYING*

[@stefflores]

Now I'm thinking I need an empower account for sinking funds too 🤔 I was trying to combine my savings account with my sinking funds but now I really feel like I need to separate that.

[@AjaDang]

oh no, separate that.

[@Isabella-de7kv]

Random question - I want to get into sinking funds now after paying off my student loan debt. How do I set this up - do I take the money needed for the sinking fund from the money I would sent towards my emergency fund or do I take the money from my "spending money for the month"? I currently calculated to have 450€ to spend for myself (grocerys, eating out etc) and 1250€ for my emergency fund. If I were to take 50€ a month for a sinking fund, where would I reduce money?

[@nataliewong5291]

i think this is up to you. it depends on how quickly you want to build up your emergency fund and your sinking funds. you can definitely take out a portion from the money that you would put into your emergency fund to put into your sinking funds, but this is really up to your comfort level. if you want to build up your emergency funds asap, then maybe focusing on that first might be better, and then you can focus on building your sinking funds. hope this helps!

[@julianneivy]

The couple who’s getting married watching this 😳

[@AjaDang]

lol

[@CassandraBulava]

Is there a reason you choose to do flight/hotel/rental separately as opposed to just renting a car and doing bundles?

[@Arizona_lilly]

If u can pay half quartley try not paying monthly . For insurance or anything it’s comes fast I even do every 3 months if I have too

[@genealotech]

I just watched your debt free video and cried tears of joy for you. ❤️. I have sinking funds and they are a life saver.

[@innsywincy]

Totally unrelated but I KINDA WANT BANGS NOW lol 😅

[@coughcoughimsick6385]

How is a flight within the US more expensive than flying from the UK to the US?

[@tiarradesoto7626]

I love this! I’m not a big numbers girl but the way you do it makes me want to take it more seriously!!! 😍😍😍 i love you!!!

[@kittyp979]

I need to start saving with sinking funds again. They are definitely such a huge help! Love the bangs on you beautiful girl. ❤️

[@Taylor_Constantino]

I'm a huge fan of sinking funds because of you! I am trying to implement this in my own life, and I feel like I'm overthinking some of the logistics lol. Do ALL of your sinking funds go into that one account, and you divvy it up yourself? Or do you have multiple accounts for your Christmas, wedding, and bills savings, etc? I find myself overwhelmed with the amount of savings and checking accounts that I feel like I want to open up to keep all of my goals separated, but I'm not sure if that's necessary! 😬

[@AjaDang]

I have one account for bills + Christmas (bc those are things that will happen every year) and I have another one for trips. I keep trips in a separate account bc I KNOW that I'll be tempted to dip into my bill account to spend some extra money on vacation - so I eliminate that temptation.

[@Taylor_Constantino]

@@AjaDang this is helpful - thank you!!

[@DavyYap]

I loved the demonstration. LOL another wedding in Italy - so expensive T_T

[@justinaacorn5721]

But beautiful!

[@mookhohtee1319]

I literally have a wedding in June 2022 in North Carolina 👀. What are the odds 😂

[@alessiagandolfo9305]

This was incredibly useful to see you breaking it down ! And so inspiring , I want to truly start one

[@sangmayday]

Charlotte is a huge brewery town, if you’re into that. But I would recommend going to some bomb local spots like Deli Street and Tacos Rick-o!

[@AjaDang]

thanks for the suggestions! We aren't beer drinkers.

[@devviedowner13]

Holy shit that is super pricey for a domestic flight, I paid less to go to Iceland from Texas! I feel like you'd be getting ripped off if you bought that ticket!

[@laurengauthier3866]

That’s what shocked me- she chose as if she was leaving the next weekend. You book a flight a couple months at least in advanced and that would cut the cost by half or a third.

[@Yasmine_hanna]

Hey Aja ! Thank you so much for this video ! I have a question : How do you take into account the fact that even though the wedding is in 12 months you may have to start paying some parts (flights, hotel...) before that date ?

[@AjaDang]

chances are I'll have a good chunk saved up by the time I'm able to buy tickets so I'll use what I have. I doubt the cost of the flight and hotel would change too drastically over the next year. Or you can pay for it out of pocket and pay yourself back.

[@misciasimmons5337]

Charlotte, has areas where you can walk, but there is crime as well. It is also a very spread out city. You might want to make it a longer trip and fly to TX then on to Charlotte. It might save you money. We will go to Atlanta to fly places, because it is so much less expensive. I hope you find less expensive flights!

[@AjaDang]

I thought about a layover in Houston before the wedding bc that's where Brian is from. Something to consider!

[@skybluecrafts5494]

@@AjaDang I agree non-stop flights are so much nicer BUT I have a flight booked to Charlotte at the end of August through Southwest with 1 stop and my flight is only $312 round trip! Thanks for the great video.💛

[@MadisonFalcoFoods]

Watching these calms me so much Thanks for sharing

[@AjaDang]

love how budget videos calm you haha

[@MadisonFalcoFoods]

@@AjaDang It’s the most calm feeling you can have in my opinion hahah knowing where your money is going☺️

[@curlyprincesa]

Charlotte in the house 🙌🏽 … would love to meet up I live in the city. My sister is a food blogger look up her IG : a_yo_bees_eats

[@calikvistad9965]

Futobuta Ramen in Charlotte is one of my favorite restaurants in the US. I spent just under a week in Charlotte for work, and I ate here almost every night. I was able to chat with the owners at the “bar” space and get to know their story. They also have a huge selection of imported sake and they do sake flights. I still dream about their food. ♥️ check them out on Instagram? I hope this helps!

[@calikvistad9965]

I ended up buying my two favorite sake bottles from them before leaving town too. I drank the sake and I put fairy lights inside the bottles because they were so beautiful. 💙 both bottles are blue. One is short and square with a dimple texture and cork opening called Bunraku, and the other is shaped like a basic wine bottle with a yellow screw top cap. I have that one tucked away right now and I can’t remember the name. 💙

[@AjaDang]

yummm - thanks for the suggestion!

[@keelyroaart]

Amazing. Wonderful watching your process. Thank you for sharing. 💖

[@kristinambickford]

Hey girl! Did Empower finally set up their system to have "buckets" like Ally? And did you personally get rid of Ally? @ajadang

[@kallistoindrani5689]

Pff, I don't know if I would even go to a wedding that could be so expensive for me. I'd probably just buy them a gift and that's it. But here it's also not that normal to have to take a plain to go somewhere because Belgium is far smaller then America :D

[@jazzawockeez1]

Hey Aja! First! Congratulations on your engagement! Do you plan on making any budgeting videos for your wedding? I just recently got engaged too and I’m a little stressed about planning it.

[@anhnguyenthingoc9504]

I love the idea of sinking fund. I already saved money for my shopping season (Thanksgiving and Xmas). With this, I will not overspend (that is very often for everyone). However, I don't get the point of sinking funds for the internet or other utilities. I think these costs should be included in the emergency fund. Am I correct? In addition, just leave your money in the bank (even high yield bank) is not a great idea. I want to put this kind of money to my investment account. Overall, I love the idea and do it every day but for just some specific stuff.

[@AjaDang]

You absolutely do not have to build siking funds for all your bills - I'm just a psycho. Just remember that emergency funds and sinking funds are different!

[@swabrren]

but this money isn't meant for long term savings, it's meant to be spent in the short term, so putting into an investment account wouldn't make sense.

[@Confusedkoalascalamity]

Don't UBER in NC get a rental car from an airport its cheaper. Nothing is close to anything here.

[@fairyfreak1]

For clarification, do you have a separate account for each sinking fund (I.e., internet, vacation, gym, etc.)? Or you just have one account and you know how much you’ve saved for each?

[@AjaDang]

Good question, which I should've clarified: I have 1 sinking fund account for all my bills (gym, internet, insurance, etc) but for larger sinking funds, like the vacation - I put it in a separate account

[@Nedas2108]

@@AjaDang Hi, I was wondering the same! Seems like the bank charges for managing all the different accounts could easily add up! Do you have a different system in place that eliminates that, is that actually one of the benefits of your peach card provider? ☺️ I don't think we have a similar service in my country, just regular banks... Love your content, really inspiring ♥️

[@AjaDang]

@@Nedas2108 so Empower has my bill sinking funds (and my emergency fund) - they charge a fee. Any extra accounts (for personal and business taxes, larger sinking funds, etc) are with Ally bc they are all free.

[@AlexandraAnnette]

ill make a sinking fund for skydiving certification

[@khoxha83]

Cheapoair is better than booking with American airlines direct.

[@434sweetness]

U can try and air bnb it may be cheap to were u can shop and cook your own food that might cut some of you cost to

[@Tesla-Cannon]

My parents don’t understand why I have different accounts for different sinking funds (nor do they understand sinking funds in general 😂) but it’s just the way of the future

[@sofondadavis5028]

It is really an Ole School technique. Just one the previous generation didn't learn because of the credit card culture.

[@heyykristee]

Thank yo so much! You made this so easy to understand!

[@jglessner2430]

Love you Aja!

[@robyntaylor4054]

Very helpful thank you for sharing

[@fromonroe6060]

just an fyi, charlotte is not very walkable at all & the public transportation system isn’t super intricate. certain pockets are, like downtown for example. but they’re very car dependent so it should be reflected in your transportation budget! thanks for such a thorough video xx

[@AjaDang]

do you think it would be better to rent a car?

[@fromonroe6060]

@@AjaDang if you plan on doing a little sightseeing in different areas. if not I think lyft and ubers are just fine

[@Hello11235]

This is my favourite kind of video

[@teachangel275]

Do you need to get approved when opening an empower account?

[@iaong96]

This was very much needed, thank you Aja!

[@augustajoseph3943]

Thank you this was a great video.

[@ambrianajones9551]

do you still utilize the qapital app?

[@jennya1995]

I asked the same thing but my comment was never posted. I’m guessing she no longer used it. I cancelled my Qapital account because the customer service is HORRIBLE. I was never able to get my funding account linked and none of my support tickets were resolved. Different agents kept closing my support tickets with no comments or updates. I got fed up and asked that they close my account immediately. It’s a shame too because I was really excited about using the app.

[@emmssi8714]

My bf and I missed a wedding this year because of how expensive it is to fly there, food, drinks, clothes, room, and driving - we were like no lol. Destination weddings are beautiful, but man these times are hard for it