How it works
Take the cost, divide by the months until it is due, and save that each month.
| Cost | When | Save each month |
|---|---|---|
| $600 car insurance | 12 months | $50 |
| $480 holiday gifts | 8 months | $60 |
| $900 new laptop | 18 months | $50 |
Common sinking funds
- Car repairs and servicing
- Annual subscriptions and memberships
- Gifts and holidays
- Medical and dental costs
- Home repairs
- Replacing a phone or laptop
How to keep them
Use a savings account with separate pots or nicknamed accounts, or a simple spreadsheet. Automate the transfers on payday.
Sinking fund vs emergency fund
An emergency fund is for things you cannot predict. A sinking fund is for things you can.
