What Are Sinking Funds, And Should I Have Them?

Want a way to ward off financial antsy-ness, surprise expenses, and the reach for more debt? Sinking funds are allllll the rage. Learn how sinking funds will get you one step ahead of the paycheck to paycheck cycle (or maybe 12), why you need them in your budget, and how this trusty pillar of budgeting will give you the most financial confidence you've ever had.

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[BrandonBurch]

Even though I already know all this, I still love soaking this stuff up because I'm a nerd.

[lugo_ayana]

Sinking fund pro here…I have one for car insurance, repairs, medical deductibles, vet bills, Christmas, and the IRS. These are life savers.

[debratakagawa]

I just started YNAB this month and I am getting hit left and right with those you know they’re coming unexpected expenses. Thank you for reminding me that this time next year things should be more mundane thanks to sinking funds.

[richardparobeck]

She explains the concept of a sinking fund better than anywhere else.

[brookarisa]

This video feels relevant. Only been using YNAB for a few months. But I just had to use my car repair sinking fund last week. Granted the repair was more than I’d saved. But it was such a relief to have a decent portion of the amount.

[kmed]

I love that ynab is teaching financial concepts broadly rather than only within the context of their app. I'm a loyal ynab user, but this is something everyone should be doing, ynab user or not, and they showed you how using any budgeting method. Financial education is more important to them than making a buck from their app and that is much appreciated!

[vincentapa]

Oscar for the scene "What in the ..."; Looking forward to the sequel, "700 dolla, no problema"

[lizp.]

Sinking funds are how I saved for my last vehicle and my tiny house! They allowed me to jump on deals because I had a lump sum already saved, even though in both cases it was a couple of years earlier than I had planned! I love that it's so easy to do on the app 🥰

[ksk]

I have a "Future Debt Prevention" category with 14 sub categories (sinking funds), I transfer the money that I set aside each month into one savings account. When one of those bills come due, I just transfer the appropriate amount into my checking account and pay it. It's funny, but I've never been tempted to touch the money in that account. I have some regular expense categories that I can move money between (groceries, household, spending, etc) but never the sinking funds. This is a huge win for me ... I'm actually saving money for things!

[Apollo]

I've been picturing my life with that mug you've got now... and it's looking alot better than the life I'm in. Help?

[Liriel]

I really enjoy your presentation of information. I've done sinking funds in the past but taking them out in cash, then swiping and doing deposits was to many obstacles for me to stick to. I love that YNAB just keeps track but its all in the same account so if you make an online purchase or swipe your card its easy to track where your at. This is also the first program (i've tried a lot) that i'm not thinking "How do I spend all this money this month" but rather "How far into the future can I make our money go". Its really changed my spending habits and avoid unnecessary spending, simply because I like to move a month ahead and place money. Thanks YNAB and your crew for the program and video information!

[catherinefoley]

Congratulations on your wedding Hannah! Wishing you every happiness x

[Tesla-Cannon]

I have 10 sinking funds and used to have a savings account for each one. It’s really helped me reach my goals, but I am trying to consolidate for simplicity. Ally’s savings account let’s me visually break out the money into “10” buckets. That way the money is in one place, but I can still see all my goals. Plus, it’s easier to track in YNAB.

[AUSSIEYNABBER]

One thing I love about YNAB is that you can check the average spent, and use that as the amount to put away each month.

[quepasajohn]

My budget category with Doctor, Medicine, Auto Maintenance etc was named "Intermittent Spending", and I just changed the same to "Sinking Funds". Thanks for the tip.

[kng]

In my YNAB day they were called “Rainy Day Funds” you whippersnappers!

[BethAnnesBest]

I changed these in ynab to "Annual Bills" I think this also helps from having a blind "savings" category. What I do is I fund all these categories in a few months so i don't have to worry about it.

[LJSinWA]

LOL Rather than “sinking” (think I’ll watch Titanic tonight), I call ours a “reserve fund.” Every month an auto tsfr goes into it. Works like a charm!

[Danny-xihb]

glad these videos exists. Keep it up YNAB

[sharlarivera]

I've been using YNAB for 7 years (!) and have used sinking funds all along but never knew it! One big one that we do is our medical insurance deductible (this is obviously US-centric). It took us a while (again, we've been YNABing for years), but we saved up a "medical" category that would cover all/almost all of our family's deductibles if we ever needed it all at once.