What is a Sinking Fund?
Sinking funds are a set amount you save every month for non-monthly expenses like car repairs, maintenance of your home, or twice-yearly insurance payments.
Note: Sinking Fund is also a good name for a vessel. You could add this as well. Wish Farm goal.)
I am sure the car will require repairs eventually. All of us know that. We all know that.
What is the estimated cost of repairs? How much will these repairs cost?
Our life insurance premiums must be paid annually. It’s a known expense. What will be the cost of premiums? We have term coverage that is locked for at least 10 years, which comes out to $840 annually.
You can also use sinking funds to pay for medical expenses, holidays, weddings, birthdays or Christmas presents, or other expenses. All of these aren’t eligible. Unexpected expenses can still feel like that when they come up again.
List of other Sinking fund categories You might want to include this in your budget.
What Should I set aside?
