Understanding Sinking Funds for Better Budgeting

A sinking fund is a cash reserve in your account that holds calculated funds for future expenses. This is different than an emergency fund!

Purpose of a Sinking Fund

he purpose of a sinking fund is to have enough liquid cash savings to cover anticipated expenses. A sinking fund supports costs related to life events and assets.

Sinking Fund Categories

Sinking fund categories help organize savings and promote responsible spending when needed.

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Examples of Categories:

- Medical -Car Care -Home Fund

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-Figure out how much is needed -Choose where to save funds -Determine how to save -

Setting Up a Sinking Fund

Bottom Line

It’s your responsibility to cover these events, and the only way to safeguard your finances is through a properly established sinking fund.

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