Sinking Funds: Which Ones Do You Need?

Want to know how to decide the sinking funds you actually need in 2018? In this video, I talk about Dave Ramsey's definition of a Sinking Fund and how to decide which sinking funds you actually need. Then I go over the sinking funds we chose and why some of them go AGAINST Dave Ramsey's definition of Sinking Funds.

**********************
We have snail mail:

Wendy Valencia
PO Box 361
Dunn Loring, VA 22027

I'm an Amazon Influencer!!!!

(more links below)

********
Things to watch:

**********************************************
We are a family of three (Wendy & Mauricio and Melina Age 6), living in Vienna, Virginia with my parents while we get the heck out of debt! We are all about having a happy life and a happy home but all while keeping it real about life's ups and downs. On this channel, you will see, us walking through the debt-free process, debt-free motivation, weight watchers and everything working mom! I hope you stick around!

*********
More things I use and HIGHLY recommend:

***Some links may or may not be affiliate links. Using affiliate links will not affect the cost to the consumer.***

[gigimargal]

I just came upon your channel and I LOVE IT!!!! THANKS SO MUCH!!!!

[Luvsread]

I think people are too hung up on a proper definition of sinking funds. Sinking funds should be what you need them to be. I currently have several open ended sinking funds. I haven’t capped them because they are in constant use. I put the money in, and if I need it I use however much I need and then do it all over again the next month. As long as you are saving for the future, to me that’s all that matters.

[jasminesjourney]

You’re awesome. Liked and subscribed ☺️

[alymj]

I have 8 sinking funds that I am currently funding and 1 that I urgently need to add (my hot water system is on its last legs!). All of mine bar one meet the Dave definition in that they have a defined upper limit and an expected use by date. I have a medical fund that I cap at $500 which is my annual health insurance deductible but here in Australia I wont need to touch that most years so I am not sure it meets the "use by date" rule.

[traciestroud]

This is one of my fav sinking funds videos I've watched. Love how you broke it down. We have some open-ended funds, and then we have some that will have a max where we'll stop funding them. It's all about what you need and what works for you.

[CentsibleLivingWithMoneyMom]

What a great video. I am to start two new sinking funds in July.

[kimmicook]

Great video! I’m with you on sinking funds. They give me security in my mind. For example, I have two older dogs who have been pretty healthy but I knew things come up medically for older dogs so I have a sinking fund for them. In the last 2 months they both had medical issues come up that cost me about $1500. I was able to get them the treatment they needed without stressing out about how to pay for it.

[freedominabudget]

When I was in Baby Step 2 I had 7 sinking funds, now that we are done with Baby Step 3 we have 18 Sinking Funds! They really help me stay organized and prepare for anything that may come up. We have enough income at the end of the month that we could cash flow most things, but it makes ME feel a lot better having the money set aside. :)

[djterry]

I really don’t have any sinking funds because I am working on trying to get my debt to sink. That’s right, sink all the way down to zero!

[Alysia]

Thank you as always for an awesome video! We are in BS2 and were looking at increasing our EF for an emergency trip to Peru or Alaska (my husband from Peru, I am from Alaska and we live in DC). I like the idea of identifying it as something separate than the EF while in BS2.

[livinglargeonlifetime]

Always good info, thank you! I didn't know the difference. When I tried budgeting at the first of the year we had SO MANY SINKING FUNDS! Probably at least 15 - hahahaha! It's a tough call.... I like your system though, you always make so much sense!

[kimrodriquez]

I am working on getting us 1 month ahead on our bills right now. This will probably take me the summer as truth be told we are behind on monthly bills. Working my tail off on this. I have it all figured out on a calander. P.s. Love that top on you. Looking forward to that emergency fund being in place.

[alishajasinski]

Thank you very much for this video!! I had 3 sinking funds and I was debating on putting everything else extra to debt. Before this video today created two more and was still debating doing this. Now for sure i am adding them to total 5. Great video explaining sinking funds!!

[Myeverydaywifelife]

Do what works for you! My question to you is where do you keep these funds? All in one account but keep track of each separate fund on paper? Or separate actually accounts for each thing? I don't really have any sinking funds. I watch one youtuber and they had 13 funds and 13 actually separate bank accounts for them. OMG I could not keep track of them all. I just have 2 savings acct. One emergency/sinking fund account when we need something like a new dishwasher we pull from that also in there is 1 year worth of income to live on incase hubby loses his job and then $1, 000min emergency fund. The other savings account is for retire and then a of course another 401k from my hubbies work. I don't do well with having to track of several accounts even if it is jus ton paper and not an actual account. Just easier to have only 2 savings account. Hmm maybe I should do a video?

[WendyLitteral]

Yay! Thank you for doing this video! So I've decided on 6 of my one million different sinking fund ideas, but I'm only focusing on 2 of the "inevitable" ones first (well, I realize they are ALL inevitable, but these two are the tough ones to cash flow): Christmas and our kids' birthday parties. Once they are funded then I'll move onto the important, but not so important ones. But RE: birthdays - it's exactly what you said, it doesn't matter what we do their gifts/parties always end up being a big show. Always. I'm also going to be using this fund to include OTHER kid's birthday parties because every time we turn around there's another one! We've had 5 in the last 4 weeks. 5! What the heck was up 4 years and 9 months ago!? And even though we cut down what we spend on her friend's birthday presents from $20 (Northern VA goals) to $10 (now living in the boonies of Fredericksburg goals), even at $10/kid that was still $50 we unexpectedly had to spend last month! Total tangent here, but I'm sure you can relate - One holdover from the NOVA parties I will always keep is hiring a photographer for the parties. It seems like such a snob thing to do but OH MY GOSH how awesome it is to get those photos! It means Mom gets to enjoy the party too, and they always get such better shots than I could ever get with a cell phone while navigating kids. Up north they were like $150 for 2 hours so I'm hoping they're slightly cheaper down here, but even still, so worth it. We also did small scale catering (read carry out catering from Ruby Tuesdays). Also totally worth it, but all those things drive up the price. Plus the cost of renting a place or moon bounces, etc. It all adds up, and it always happens. And now there are two kids... so sinking funds it is!

[deathrowtodisneyworld]

Our car insurance in FL gets renewed every 6 months. I get a really good discount when I pay up front in one lump sum. April this year, I got an almost 600 dollar savings to pay in advance for this 6 month period. I have 1700 left on my car note, and could have paid it off by the end of April, but the 1500 lump sum for the insurance had to come first! I'll have the car paid of no later than the end of this month. Of course, I had the emergency bar stool purchase, but I won't speak of such! #Don'tBeMadAtMeDave

[lynmorris]

Great video Wendy. While I think it can be easy to go overboard with having too many sinking funds in BS2, and inadvertently cause a slow down on the debt payoff, I also feel like there is a catch 22 on not having sinking funds and having a starter efund. In my situation, a medical sinking fund is crucial (even without having a specific deadline) as it's an ongoing use and replenish situation for health reasons. That said, I actually believe that medical should be a sinking fund that everyone has (ongoing health issues or not) as we know we will get sick at some time just not when.
While it may not fit Dave Ramsey's definition of a sinking fund, I think that sinking funds for the 'it could happen, the efund won't cover it and we would be able to cash flow it' type of expenses is being sensible

[saracash]

I started a emergency fund but I have to hustle up college tuition for this last year for my son 🤦🏾‍♀️ after I get him straight I will try again

[lisafisher]

Very helpful video. I get the whole sinking fund concept now! Hey...as of this morning, my family is debt free. It took us 3 years to pay off $25K because we started the Dave Ramsey plan simultaneously with paying college tuition for our oldest son. Oops!!

[reginak]

Really liked your video until the loud unnecessary scream at the end in my ear.
Very childish