Sinking funds are awesome!

iVillage Member
Registered: 04-10-2003
Sinking funds are awesome!
31
Tue, 01-19-2010 - 10:23am

Hi all,


I am finally at a place where I have a float in my sinking funds/planned spending accounts and its great! Yesterday I had to pay $60 for dodgeball. I was trying to figure out where it was coming from until I remembered I have an account that I drop $20 each week into for fun stuff for me. It had $80 in it, so I wrote a cheque and life was good.


Then last night after Toby chewed up a baseball (it was my sister's MVP ball from when she was 6, yikes!) we decided that obedience needed to be fasttracked. Happily, there is a class running at the community centre by our house for 7 weeks and it cost $76 (the private places want $150 for the same thing!!!). At first I was thinking I would have to forgo my gym membership, but then I checked the pet account and it had more then enough money to cover it, his check up next week AND


Bex -

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Avatar for colomom99
iVillage Member
Registered: 03-28-2003
Tue, 01-19-2010 - 10:34am

That's great! I love the name "sinking fund" since I feel like I'm sinking most of the time. I am a little confused how they work. Probably I'm a little ahead of myself since I need to fund my e-fund and I have a Mount Everest of cc debt to deal with. But I was wondering: do you have actual physical accounts for each category or do you divide it up mentally within a general savings account. I think I read Mary Hunt or someone a long time ago who talked about actual physical savings account -- like five or six of them. Is that what you do? How much do you fund in each?

iVillage Member
Registered: 04-10-2003
Tue, 01-19-2010 - 10:45am

I personally am a "fund flipper" as Karen likes to call me, lol. I have physcially separate accounts, but have been known to transfer from one to another as needed (hence the fund flipper term).


I pay into these "sinking" accounts (or Planned Spending as Gail from Til Debt do us Part calls them) every payday. In total I have $230 taken off of each paycheck that goes to savings and planned spending. They are all ING direct accounts. I have:


$30 to go to car maintenance/license/repair (Not a huge amount but I have a brand new car under warranty. Once the car is paid off, the payments I was making will go here)


$40 to house maintenance. I would like to increase this one as there is ALWAYS something to do


$20 to


Bex -

iVillage Member
Registered: 08-04-2008
Tue, 01-19-2010 - 11:53am

I am starting




iVillage Member
Registered: 11-14-2008
Tue, 01-19-2010 - 1:28pm

Very nice kids fund flipper! I was hoping for a pic of you but I will take it!

Yes the sinking funds is supposed to take the stress out of things you know you will have to spend money on. The efund is supposed to take care of the rest.

I track my sinking funds with one savings account(I would have to pay for other accounts if I wanted more) and an excel spreadsheet. I like the spreadsheet because I can flip(LOL) things around if I need to on the computer without having to do transfers. We can ponder different options. It is on the second sheet of my budget(which also changes as life changes). I have many categories for sinking funds including property taxes, propane for winter, camp for kids, clothing, student loan savings for repayment, car maintenance, house maintenance, gifts, house savings, car licenses etc. That would be a lot of accounts. Some I do not fund each category every month. Some I do. For instance, I have 6 months to now save for summer camp. I usually start after Christmas. If I don't spend the entire Christmas budget I flip it to summer camp. I think I flipped 60 bucks to summer camp last week. Then the cycle continues. For property taxes I put in a set amount each month based on last years total divided by twelve plus a little increase(they always seem to go up so I am learning).

Complicated? Probably, but you have to do what works for you!


iVillage Member
Registered: 04-10-2003
Tue, 01-19-2010 - 1:55pm
I see your point. It is MUCH easier to flip funds if you just have to change a line on a spreadsheet. Hmmm, something to think about . ..

Bex -


"Yesterday is history, tomorrow is a mystery, today is a gift -thats why its called the present."


Bex -

Avatar for colomom99
iVillage Member
Registered: 03-28-2003
Tue, 01-19-2010 - 2:46pm

Sorry to be so dense but where do credit card repayments come in? I get that you need $1,000+ for an e-fund and I get the practicality of sinking funds. For me it would be school stuff for kids (just got notice of $199 due for my son's sixth grade trip and the other kids have big trips in summer of 2011) and my car and home repairs. I just have so much cc debt that I basically use up any and all money after regular bills are paid.

Do you wait until cc payments go down enough that you fund the sinking funds or what?

Jenny

iVillage Member
Registered: 08-04-2008
Tue, 01-19-2010 - 4:00pm

Ok how about a typical budget, I just put in some obscure amounts until you get the idea - I do have a zero budget spreadsheet you can use to calculate all this if you email me:


Food




iVillage Member
Registered: 01-12-2010
Tue, 01-19-2010 - 4:23pm

Please clarify for me:

Is a sinking fund an emergency storage of money? (Like a mini E-fund for different categories like vehicle, pet etc)

Or

Is it just the money you PLAN on spending? (Like I plan on spending $30 on clothing, $40 on pet, $25 on vehicle M&R each month etc).

I have a planned spending account for my rental, where every month I throw in $100 for travel (bcs it's 5 hrs away), $100 for M&R, and $200 for property taxes. Generally we're up there every 3 months or so, and that's when the money (except PT) gets spent. Is this what y'all consider a "sinking fund"?

Just trying to wrap my head around this.

(And yes I googled it, but all I'm getting is stuff about million dollar corporations, which I know none of us are lol)




Edited 1/19/2010 4:26 pm ET by young_momof5
~ Melissa ~ ‎"We need to find the courage to say NO to the things and people that are not serving us, if we want to rediscover ourselves and live our lives with authenticity." - Barbara de Angelis
iVillage Member
Registered: 10-01-2009
Tue, 01-19-2010 - 5:41pm

Bex...Your dogs are absolutely beautiful...


They must make your life sooooo happy


Duke

iVillage Member
Registered: 08-24-2007
Tue, 01-19-2010 - 6:12pm

A sinking fund is a fund or account into which a person deposits regular payments in order to cover off an expense due in the future.

Kate


empty purse

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