Sinking Fund Strategies For Beginners
Have you heard of sinking funds? My wife and I used sinking funds before we even knew what they were – and it was entirely by accident.
Sinking Funds Keep You Afloat
With so many unknowns in life, you never know when a financial situation will occur that you’re completely unprepared for. For example, say you’re sitting at home, and your central air stops.
What Is A Sinking Fund And What’s The Purpose?
A fund where a person sets back a certain amount of money over time in order to use it for future expenses.
Each sinking fund serves a unique purpose. They can be for something specific, like an event or future purchase, or they can be set up for any unexpected situations that might occur.
How Do Sinking Funds Work?
Sinking funds work hand in hand with your monthly budget. Think of them as a bill that you pay to yourself.
Sinking Fund – What’s With The Name?
While the word sinking has a negative connotation, it actually has to do with sinking or decreasing, the amount of debt you owe
or might owe
in the future. If you use this type of fund correctly, it can really make life a lot easier.
Why Sinking Funds Are Important
Building sinking funds is essential to being financially literate and responsible. If you’re looking to improve your financial situation, add sinking funds to your strategy.
How To Make A Sinking Fund – For Beginners
Keeping sinking funds separate from your regular money will help you create better financial habits.
These funds can also be used for planned expenses that usually go on a credit card (i.e. vacations)
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