Sinking fund?

iVillage Member
Registered: 05-23-2010
Sinking fund?
4
Fri, 07-23-2010 - 5:34pm

While reading through posts (current and old), I have noticed a lot of talk about "sinking funds" and am curious... what is this?


Thanks :)

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iVillage Member
Registered: 03-27-2005
In reply to: cm06andcg10
Fri, 07-23-2010 - 6:56pm

Think of a sinking fund as a mini savings account for those bills you know you will have come up during the year.


I have money in my sinking funds to cover things like tax preparation, car tags, car insurance, routine vet care, emergency vet visit, snow camp for ds, dental deductables, eye glasses, etc..


This way when these things do come up, I have the cash to pay for them in full, without worrying about it.

iVillage Member
Registered: 05-23-2010
In reply to: cm06andcg10
Fri, 07-23-2010 - 8:46pm
Oh my! This is exactly the thing I have been looking for! While I was working on my family's budget, I came up with a "Random things" category that had those random expenses in it! THANK YOU! :)

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Avatar for indexlady
iVillage Member
Registered: 03-29-2003
In reply to: cm06andcg10
Sat, 07-24-2010 - 9:41am

Another way to view sinking funds is for those things you don't know about.


Since

iVillage Member
Registered: 12-04-2006
In reply to: cm06andcg10
Sat, 07-24-2010 - 7:33pm
I think that your explanation is the best one I've seen for sinking funds. The one advantage that I can see of using the method you set out is that the emergency fund won't take a hit unless it is absolutely necessary.
Lyn

Lyn