How To Use a Sinking Fund

[@libbysworld7649]

My husband did this recently to purchase a new tv. I have had sinking funds for a couple of years, but hubby has never. We just got married in June and he was amazed how quickly it built up. It was fun.

[@HeyItsMaori]

You explained this well. I didn’t know what a sinking fund was and people didn’t really explain it.

[@METVWETV]

Best to have such a fund labeled, "Oh No! The roof needs to be replaced!" Too.

[@OhWell0]

I have a 20k bill to be paid in 17/18 weeks. I've got 1k saved. Lol. I'm working 70 hours a week to get me to my goal. IVF, I'm saving for IVF.

[@tjlarson1991]

Really not the definition of a sinking fund, but still a good idea

[@danaallen6946]

What are other examples of sinking funds?

[@danaeadams2123]

How does this work with your 3-6 months expenses savings that you are trying to build? Should you or can you for example save for a car while you are building the 3-6 months pad?

[@METVWETV]

IRL, it will depend on the urgency of your situation and if necessary, you can pause saving/investing but you should follow the Baby Steps, then ideally, You'll have discretionary Money AFTER Step 3. Then, Simultaneously with Step 4 you can start such a fund. Steps: Step 1. Save $1,000 for your starter emergency fund. Step 2: Pay off all debt (except the house) using the debt snowball. Step 3: Save 3-6 months of expenses in a fully funded emergency fund. Step 4: Invest 15% of your household income in retirement.

[@rhondanerren4797]

Why is it called “sinking fund”?

[@najahbritt3718]

Because the sinking feeling you get always having to pay for something 😭😂

[@AGoldieDog32876]

@@najahbritt3718😂😂😂

[@asma16cool]

Because they aren’t savings, you will eventually use them up. Thus the sinking fund

[@Arizona_lilly]

Not sure what sinking fund is

[@METVWETV]

She just explained it. If you have a need for something and anticipate making a large purchase such as a Car, Divide the purchase price of the car by the number of months before you need to make said purchase, then, Save that amount each month. Ie: I need $10,000 in 10 months, I need to save $1,000/month

[@foxiedogitchypaws7141]

Great if you Have the money To save . It's not That Smart.

[@yagoalmeida3691]

Unless you’re using every penny you have in your expenses, there’s always money to be had at the end of the month. And if that’s the case there’s a bigger problem at hand

[@frostphonic]

Useless.

[@METVWETV]

No one is asking for your Biography

[@frostphonic]

@@METVWETV you are a failure in all things.