What You Need To Know About A Sinking Fund

Sinking funds can be a gamechanger for individuals and households. It is a valuable tool to add to your financial toolbox for savings.

This strategy helps those who want to manage their finances better and gain peace of mind.

Setting up a sinking fund is easy to do and enhances your ability to save money for large purchases you will make in the future.

Budgeting is an essential tool for understanding your income sources less fixed and discretionary expense categories.

Review Your Budget

Make a list of fund categories, break them down into more specific items. Then determine the target amounts for each.

List Your Planned Purchases

You can open an FDIC-insured saving account for each type or have one large sinking fund with named sub-accounts.

Where Your Savings Will Go For Purchases

Whatever you decide to do, each sinking fund should be in an FDIC-insured savings account that is readily accessible.

Need An FDIC-insured Account

When you have a good understanding of your budget, your fixed living costs, it is easier to plan for discretionary spending.

Better Budgeting

When you set up your sinking fund, you essentially are planning to buy something you need or want for your home or life.

Conscious Spending

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