SINKING FUNDS | Our Categories and Tracking Strategy Explained

Sinking funds explained. In this video I share a detailed explanation of what a sinking fund is, what sinking funds we have, how we structure our ten bank accounts to include sinking funds into specific categories, and how we track them all. Plus I discuss sinking funds while getting out of debt. Should you have them at all, while you focus on debt payoff.

What sinking fund categories does your family use?

#DebtFreeDana #SinkingFunds

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Hey there! I'm Dana. I'm a wife and Mother to 4 kids, including twin boys and two girls. I work full time outside the home in finance as a Corporate Accountant, but enjoy sharing my personal and parenting journey online. We live in the Philadelphia area.

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[lovealwaysjasmine]

1. Christmas
2. Car repair
3. Home repair
4. Hearing aids
5. Kids
6. Vacation
7. Emergency fund
8. Main account for bills
9. Business
10. Savings acct for kids car

[brittanyr]

I do this too! I love it! I have one huge savings account for future investments and several mini ones/ sinking funds for yearly car insurance, birthday parties for my kids, vacations, and so on. It makes my life so much easier...no stress about which paycheck to pull a couple of hundred dollars from every couple of months.

[jncchang]

I wanted to thank you about this "sinking fund". I'm so relieved. I never understood how to save when I'm still trying to get out of debt, cuz I never knew what I was saving the money for. I wanted to save for retirement. I heard about the Xmas fund. Vacation fund. But it always seemed no matter how much I save, I always needed the savings for something for the house or car or kids. There was always something. Like the movie "Up!" We always had to break the jar of savings for something or other. So I hear you. This makes me feel better. Set up several different funds for specific uses. Difficult, but not impossible.

[CherylMacKayf]

I use Capital One 360. You can have a plethora of accounts in one account.

[Maryculligan]

Debt free Christimas: I buy gifts all year (dry, boring items such as a pen etc) & I attach a gift card to go along with this. I cannot stomach expensive gifts except for cash gifts for family.

[ashvagle]

I feel like your content lately is exactly what I need to hear or need reminding about. I look forward to Tuesdays.

[thegabbybshow]

Dana,
I've been a subscriber for a while now and just wanted to say that your videos are awesome thank you so much for putting them out there for the world to see! I constantly will watch and take notes, especially when I am feeling stuck (currently I am on BS1)
Thanks!

[irhonda]

Thanks for making the distinction about not starting sinking funds for certain things, while you’re still working on debt payoff. That made a lot of sense.

[chillinretreat]

guess you can keel everything very well organized that way...like separate cash (bank instead) envelopes. thanks for sharing.

[GraceHappens]

Are these fee free accounts? Seems like the monthly fees would add up quickly. Thanks for the videos and your uplifting attitude. It’s nice to find someone who is not condescending when talking about money.

[CentsibleLivingWithMoneyMom]

Hooray I love sinking funds I have one for my house taxes and it's a lifesaver because when I get my tax bill in November I can pay all the taxes because of my sinking funds

[pennyb]

Very good. Never really thought about splitting all those things up. I'm going to give it a try. Thx.

[rainbowphoenix]

Hi Dana! Interesting video. We are both pretty frugal by nature so we just have a main savings account and a budget. The budget is very detailed and we just plunk what’s left over into savings. Seems to work for us...thanks for brightening up Tuesday’s again now that I’m back to work!

[sgist]

I love sinking funds, and I use YNAB for this as it's super simple. Very important to have an emergency fund, then start key sinking funds like Christmas etc, pay off debt etc.

[ourdebtfreejourney]

This is the part that we are a little stuck on...thank you for the video, would help greatly with our own journey to be debt free

[terigroce]

I don't have traditional sinking fund accounts. I have a Christmas club, no debit card, it comes second week of October every year. Afraid if i have a debit card i wont be able to control myself. I was banking at 3 different banks, but when my bank merged with another bank they began charging me $4.00 per month service charge, so i closed that account. i do have an account at the credit union, i put my coupon savings money and my coin saving money. If i save 1.50 with a coupon i transfer that amount or take it out of my grocery envelope and put into the savings. I also take my saved coins once a month as well. I saved 18.03 the month of august. I haven't decided yet what to use that money toward, but I anticipate being debt free my truck will be paid for in January. I have one other debt with an 800 balance which is a credit card and it will also be paid completely by January as well. It has been a long journey trying to become debt free, your an inspiration! thanks!!

[CoCMember]

Simple Bank changed my life. One bank and I made expenses for monthly bills and goals for sinking funds. One account. It auto spends and auto funds each bucket. I tried the 5+ bank accounts and it was too much.

Simple was truly life changing.

[waterlily]

I love these videos. Such great information! Thanks Dana.

[PassiveIncomeTom]

That is a lot of accounts. 👍 I have a few different accounts - car, vacation and emergency fund.

[emilyswinarski]

Love your videos like this one! Really helpful. Thank you!!