Sinking Funds
May 17, 2025
Sinking Funds: The Financial Glow-Up You Didn’t Know You Needed
Saving money sounds about as exciting as watching paint dry... on a humid day... in a beige room.
But sinking funds?
Sinking funds are like giving Future You a hug, a coffee, and a crisp $100 bill at just the right moment.
Let’s talk about why sinking funds are the unproblematic heroes of your financial life—and why you need them ASAP.
What Is a Sinking Fund?
A sinking fund is just a fancy term for saving up a little at a time for something you KNOW is coming. It’s easier to save for predictable expenses by breaking them down into manageable monthly contributions.
It’s not 'Oh no, I’m surprised!'
It’s 'Yeah, I saw that coming a mile away, and guess what? I’m ready.’
Things like:
- Car repairs (because apparently tires only last 2 hours and one pothole now)
- Christmas gifts (because December 25th...shocker...shows up every year)
- Back-to-school shopping
- Insurance premiums
- Vacations (the GOOD kind—not the 'cry in the Motel 6 bathroom' kind)
Instead of scrambling when those bills hit, you pre-pay Future You a little at a time.
Why Sinking Funds Matter — Loving Reality Check
Here’s the thing friends.
Most people don’t get crushed by normal bills.
They get crushed by surprise bills they should’ve seen coming, but didn’t plan for.
And it’s not because they’re dumb, lazy, or bad with money—NO.
It’s because no one taught us about sinking funds.
But guess what?
Now you know.
Here are some of the other reasons of why we need sinking funds:
- Reduces Financial Stress: By setting aside money regularly, you avoid the stress of scrambling to cover large expenses all at once.
- Prevents Debt: With a sinking fund, you’re less likely to rely on credit cards or loans for these expenses, helping you avoid accumulating debt.
- Helps with Budgeting: It makes budgeting easier because you know exactly how much you need to save each month for specific goals.
- Improves Financial Planning: Sinking funds encourage better financial planning and discipline, leading to more organized finances.
How to Start
Here’s your simple, zero-stress guide to starting sinking funds:
- List the Stuff You Know Is Coming.
Like birthdays, holidays, car tags, insurance renewals, your cousin’s wedding you can't pretend you didn’t know about...
- Figure Out How Much You’ll Need.
Be honest. If Christmas usually runs you $600, don't lie and say $200 to feel better. We’re grown here. ✋
- Divide That Amount By the Months Left.
Like, if Christmas is 6 months away and you need $600, boom—$100 a month.
- Set Up a Separate Spot for It.
Checking account, savings account, envelopes, shoebox—you do you. Just keep it separated from your regular spending so it doesn’t mysteriously "disappear" at Target.
As you set up and manage your sinking funds, be aware of these common mistakes.
Not Saving Enough: Make sure your monthly contributions are sufficient to meet your goal within the time frame.
- Using Sinking Funds for Non-Goals: Stick to your original goals. Your emergency fund is for unplanned expenses.
- Not Adjusting Contributions: Life changes, and so should your savings. If your financial situation changes, adjust accordingly.
Quick Real Talk: It's Okay to Start Small
Listen, I know right now you might be thinking.
'Eva, I can barely pay my bills, and now you want me to save for Christmas and tires??'
I hear you.
Start with $5 a paycheck. Start with $10 a month.
It’s not about the amount.
It’s about building the habit of respecting Future You.
And trust me, Future You deserves it.
If you’ve ever felt like money was out of your control—sinking funds are one of the first steps to taking your power back.
It’s not magic. It’s not luck. It’s not 'for rich people only.'
It’s for you.
Right now.
Right here.
And I’m cheering you on every step of the way.
If you found this helpful, go ahead and hit that like button, subscribe if you want more real-world money advice without the judgment, drop a comment telling me what your first sinking fund is going to be.
Let’s build it together.
