sink·ing fund
ˈsiNGkiNG ˌfənd/
noun
plural noun: sinking funds
a fund formed by periodically setting aside money for the gradual repayment of a debt or replacement of a wasting asset.
I have not been doing the Dave Ramsey plan long enough to really give my testimonial on the idea of a sinking fund, but what I can share is what categories I have decided to save for! From what I do know I believe my categories are a little different for my family because we are not homeowners, when you own a home you could have other expenses arise that I, as a renter, would not be responsible for.
Currently I have 6 sinking funds:
MEDICAL
ANNIVERSARY
BIRTHDAY
CHRISTMAS
RANDOM GIFTS
EYEBROWS
Ok, weird? Maybe. Let me explain.
MEDICAL
Lucky for me, my health insurance is pretty good so I personally have never had an experience where I owed a lot of medical bills after a doctor visit (With that being said, my dental sucks!). I've been putting $25 a month into this fund to cover any copays or medications.
ANNIVERSARY
My first wedding anniversary is this August, and I had originally planned on going small for gifts like we usually do, until my husband mentioned microblading (WHAT?! We'll get into that later!). This meant that he was planning on going pretty big for this anniversary which meant I had to rethink my plan. I'm now allotting $25 a month into this saving plan.
BIRTHDAYS
Now maybe I'm lucky in other parts of finance, but birthdays are a different story. Almost everyone I know has a birthday between August - December. we have birthdays every week or two from August to Christmas! What! Why so many in the most expensive time of the year? Who really knows, all I know is this is going to require some money. I have put $30 a month to this savings plan at this point, but I will probably need to add a little more within the next month of so to cover everyone!
CHRISTMAS
Now Christmas is a big one, and I'm not really in a place to put A HUGE amount towards this category just yet. For the past 7 years I have gotten a 3rd paycheck in either September or October which I have always saved for Christmas presents. This is still part of the plan for 2017, but I have been placing $25 a month to give myself a little cushion.
Edit: We DO NOT go crazy for Christmas. I have been so lucky with my husband and step children they are so appreciative for what they get. Luckily for the past 5 years or so this has not been a stressful time and we are able to appreciate our time together and not stress about money.
RANDOM GIFTS
This was not one of my original categories, but I did quickly learn things come up. Just in the month of May two co-workers were thrown baby showers which they did request a small donation for a gift card. Of course, this wasn't planned and I did choose to take a couple of dollars from my personal fund to give towards their gift, but if I plan a little in advance it wouldn't be a problem when I need to throw a couple of dollars towards an office gift. I have decided to place $10 a month into this fund.
EYEBROWS
And lastly eyebrows, strange I know. As I said earlier my husband mentioned microblading as an anniversary present. Basically this is tattooed eyebrows. I have been wanting to do this for months so I did decide I would put a small amount towards this every month and when I was able afford it I could do it, but my husband said he'd pay for it as an Anniversary gift. Now as I also mentioned earlier, we don't do big extravagant gifts so I immediately said it was too much, but we decided he'd cover a little more then half as my anniversary and birthday present. I placed half of this procedure into this envelope and it's now ready for the brows!
These envelopes are kept in the safe at home and not carried daily. All of these things are planned events and will not arise without any notice and they don't need to be on me at all times. When the time comes, they'll be there!
What are your sinking fund categories?
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