💰 Sinking Funds 💰
This week I posted on stories about feeling a bit of financial stress about paying for some small medical bills. It was only $100, but I hadn’t thought about where in my budget these costs where going to come from. My money all has a purpose, I pay myself first and leave only a minimal amount in my daily expenses fund. So when bills like this come up it causes me a bit of stress. I felt similar to this at Christmas time, I saved up my splurge account for a free months to pay for gifts.
To alleviate this stress going forward, I’m setting up sinking funds, so I know exactly where I will find this money next time! I kinda already had a few, but I’m bumping it right out to have a few more categories.
Currently I have a general bills accounts (phone, electricity, health insurance etc) and a car account (for rego, services, insurance). I also have an emergency fund, but I’ve only touched that once. Usually when I run short for a fortnight I dip into my bills account. But a few budget changes last year meant this account doesn’t really grow.
Going forward these are going to be my sinking funds
I’ve opened the accounts with UP, once I have my head around it I will move some money in and update my budget to fund them.
I like my budget to be set and forget, somehow this is going to be my third time updating my budget this year? Hopefully the last for a while!! Do you use sinking funds? Is there anything else I should be making one for?