Sinking Funds: An easy way to save for upcoming events

I use cash for almost all of my purchases and the last week of December I had almost no money left! December sort of wrecked my budget. We had two birthdays, Christmas parties, and Christmas dinner just to name a few. I had budgeted well for gifts, and thankfully was even under budget. But I didn’t do a great job of planning ahead for some of the other things. This year I am getting back to something I used to do regularly - sinking funds.

What are sinking funds? A sinking fund is a way to save for something you know is coming up. It can be gifts for something like Mother’s Day or birthdays or for dinner for an anniversary.

What do I need to save for? Whatever date or event that you want to be sure to have the funds for. My current sinking funds are:

• Anniversary

• Mother’s Day/Father’s Day

• Kids’ Camps

• Birthdays

• Christmas (presents, party, and dinner)

But these can be anything that works for you!

• Some suggestions are:

• Valentines Day, Easter (or any holiday!)

• Back to School supplies and clothing

• Vacation Fund

• An upcoming large purchase

How do I save money for my funds? I had some cash starting the year out and started my funds. You can budget a certain amount each month to set aside for these or add money as you can from extra income or money leftover at the end of the month.

I enjoy knowing that I have the cash on hand to pay for an upcoming birthday or anniversary. It makes it easier for me to feel good about spending the money.