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Sounds like sinking ship, but it doesn't have anything to do with pirates, aye. Sinking Funds is a budgeting system to help alleviate the stress of planning for and making large purchases.

Sinking Funds - What is it?

A money saving system designed to help you set aside money for a future expense ie. a vacation, braces, a new car, down payment, etc.

An envelope system called Cash Stuffing is commonly used where funds for each category are housed in a designated, labeled envelope for each fund category.

At a pre-determined time (1st of the month, every Monday, etc.), you will make a trip to the bank/ATM and withdraw the amount of cash you need to fill your envelopes. Use Teller Slips to make these trips easier on you and your bank teller.

Develop a Sinking Funds System

• Decide on a system, like a dedicated binder with envelopes.
• Determine your sinking fund categories and amount needed for each category. Example: Annual taxes $2500, Summer vacation $5600.
• Determine the amount of time needed to save up the total amounts for each category. Be realistic with your timeframes.
• Divide that by the periods you intend to set aside funds (each pay period, monthly, etc.).
• Prepare your sinking funds index aka cheat sheet and place at the front of the sinking funds section of your binder/folder. This will allow you to recall your goals easily.
• Label your envelopes and organize in a manner that makes sense to you.
• Add funds at the dedicated timeframe, ie. Pay day, the 1st and 16th of the month, every Monday - whatever you choose. Stay consistent.
• Utilize trackers to help you keep track of the amounts set aside. When you set aside funds, in your envelopes, mark your tracker. 
• Review periodically to ensure you are staying on track. 
• Make adjustments as needed, but really try to stick to your plan.
• Repeat periodically, usually each pay period or monthly.

If you have any questions, feel free to reach out in the comments, our Contact Form, or on socials!

Happy budgeting!