I love sinking funds! For those of you who don’t know what a sinking fund is, it is a category that you save money for a little at a time because you know there is a bigger expense coming down the line. I currently have eight categories of sinking funds; emergency, medical, car insurance, car, gas, school, renter’s insurance and property taxes/vehicle license.
The really exciting thing about my sinking funds is I have finally been doing this long enough to start building up a decent amount of cash in each category. Some categories I only save exactly what I will need like my car insurance for every six months and my renter’s insurance that I pay once a year. My favorite category is for the car. It is a combination of vehicle repair and saving for a new vehicle I will be purchasing when I return home.
All eight of my categories are kept together in one savings account. I keep up with the balance of each category on an excel spreadsheet. Any interest I earn goes into my favorite category; the car.
Sinking funds is just one more way that you can achieve financial peace!
Yeh, I have a ’sinking’ feeling that the medical savings is kind of dwindling this week.
Comment by Amy — June 28, 2007 @ 10:14 pm
congrats on keeping your sinking funds afloat! (I know that was a bad bad pun). I can’t wait to follow more of your progress, you seem to have your priorities straight and a strong conviction. Cheers!
Comment by Caleb Elston — June 28, 2007 @ 11:28 pm
I just wanted to say I absolutely love your blog. I check it through a RSS reader to make sure I never miss a post.
Comment by audrey — July 2, 2007 @ 10:35 pm
Thanks Audrey, I appreciate that!
Comment by Joel — July 2, 2007 @ 10:38 pm
Hi Joel, I’ve been reading your blog for several months and I just love it–you help DH and I keep up our intensity. Anyway, we are starting some sinking funds and we have been told that ING accounts are the best for sinking funds. Have you ever looked into this and if so, why have you chosen not to use them?
Thanks in advance,
Kelly
p.s. Keep up the great work!
Comment by Kelly — July 10, 2007 @ 3:59 am
I think ING funds would be good for sinking funds from what I hear. I guess I have never looked into them out of convenience; I like my credit union and being able to transfer the money to checking without a fee from over here in Afghanistan. Once I get back home, I may try to get some more interest; but that’s not my main goal with the funds.
Comment by Joel — July 13, 2007 @ 9:15 pm