Behind The Scenes Of Successful Budgets, Sinking Funds | Archived Episode

We’ve all experienced the stress and headaches of an unplanned yet necessary expense popping up and destroying our well-intentioned monthly budget. If you’re getting frustrated with budgeting because some unexpected expense comes up each month to sabotage all your grand plans, you need sinking funds. 

Learn everything you need to know about sinking funds, how to set them up, the categories to consider, how to calculate sinking funds, and how much to put toward them each month. Remove the shock-factor from the surprise expenses and avoid accumulating debt to cover them by creating mini savings accounts and making irregular costs an expected part of your budget. 

If you plan, you’ll know how much you can spend.

In this episode, listen for:

• Perhaps you’ve set a monthly budget and are building your emergency fund. Have you noticed how often something “unexpected” comes up? It’s basically every month. 
• Without a sinking fund, you may scramble for funds or default to using a credit card any time there’s hiccup. However, with a sinking fund, you already have cash set aside to cover the expense!
• Holidays, birthdays, home repairs, kids orthodontics, car tires and maintenance, and back-to-school clothes are all “surprise” expenses that you can anticipate.  As your kids grow, your finances adjust, and you can add or remove categories.

In this episode, you’ll also hear:

 

[00:03:32] What’s the difference between sinking funds and sunk costs? These terms may sound unpleasant, but I'll explain what they really mean so you can see how they affect your finances.

 

[00:09:47] By establishing sinking funds, you’re setting yourself and your family up for a brighter, more financially-free future. You eliminate unexpected costs by expecting them  - let’s face it, the car will need maintenance, you will have an ER visit at some point, the home will need some repairs. 

 

[00:14:45] Everyone's spending patterns, income, and financial considerations are different. It’s okay if your plan looks different from mine, as long as you have one.

 

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