start here.<\/a><\/p>\n\n\n\nNot having anything saved up for emergencies can literally ruin your finances so please make sure you have one in order, even if it\u2019s just a thousand bucks. You need to have some sort of buffer to help you out when needed.<\/p>\n\n\n\n
Ready to take the next steps on setting up your sinking funds? GOOD! Here\u2019s what I would do:<\/p>\n\n\n\n
1 \u2013 Think about the sinking funds that need setup<\/strong><\/p>\n\n\n\nCould be a car, vacation and presents like me. Maybe it\u2019s an emergency fund as well where you add X to your account each paycheck. Maybe you love to go to sporting events, so you want to save $25\/paycheck now so that you have a good amount built up when that sports team\u2019s season comes around.<\/p>\n\n\n\n
It literally can be anything that you are going to spend money on that might throw you off your budget. Plan for it now so you can spend worry-free in the future.<\/p>\n\n\n\n
2 \u2013 Determine the amounts that you need<\/strong><\/p>\n\n\n\nIf you want to go to two NFL games each year and you know they cost you $200\/each, then you need $400. So, maybe aim to save $50\/month from now until then so you have $600 saved for that season\u2019s games. Then you have a nice $200 buffer in case your friends want to go to another game or maybe your team makes the playoffs, and you want to see them play.<\/p>\n\n\n\n
Sure, a playoff game would likely cost more, say $300 instead of $200, but now you only need to come up with $100 because you saved an extra $200 to begin with.<\/p>\n\n\n\n
Same with your presents, car, or anything else. Think about what\u2019s likely on the horizon for you. Christmas is coming up \u2013 how much do you normally spend? How are the tires on your car doing? If they\u2019re bad, maybe inch up your savings number a bit faster\u2026. you can always ratchet it down later.<\/p>\n\n\n\n
For instance, if you need new tires in 3 months, why not try to save $200\/month to cover those? Then once you buy them, go down to $50\/month to fill up that sinking fund. It doesn\u2019t have to be a \u201cforever\u201d amount\u2026<\/p>\n\n\n\n
3 \u2013 Set your money up to auto-transfer<\/strong><\/p>\n\n\n\nThis is so huge because if you don\u2019t do this, you likely won\u2019t save the money. You\u2019ll find a reason not to save it and instead just blow it and then come Christmas, or the time you need the new tires, or your team\u2019s playoff game, you\u2019re SOL. You don\u2019t have any money so you can either spend anyways and ruin the budget\/go in debt, or just miss out on the thing you want\/need.<\/p>\n\n\n\n
Both options are crappy, huh?<\/p>\n\n\n\n
Instead, setup either an auto transfer from your account each month or work with your employer payroll to have it automatically come out of your paycheck like I do. I like this the most so that every time I get paid, I have a lump sum go into my Ally account and then I divvy it up between presents, vacations, and car, just as I\u2019ve explained previously.<\/p>\n\n\n\n
Honestly, it\u2019s a pretty fool-proof system to implement and one that will help you out a ton in the future.<\/p>\n\n\n\n
At the end of the day, a sinking fund is nothing more than a dedicated savings account for a specific purchase, but the lack of one is literally a budget killer \u2013 I can speak from experience.<\/p>\n\n\n\n
Determine what sinking funds you want, pick the amount, auto transfer that money, and plan it all out with your budget calendar<\/a>, and bada boom bada bing \u2013 you just became a budget savant!<\/p>\n","protected":false},"excerpt":{"rendered":"I\u2019m not lying – having a sinking fund is literally the best way that you can stay on budget. I mean, sure – you could just go make a bajillion dollars instead but that\u2019s not exactly a feasible path forward for most of us. So, what is a sinking fund? Before I get into the […]<\/p>\n","protected":false},"author":10,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[5959,5948],"tags":[],"yst_prominent_words":[],"_links":{"self":[{"href":"https:\/\/einvestingforbeginners.com\/wp-json\/wp\/v2\/posts\/17262"}],"collection":[{"href":"https:\/\/einvestingforbeginners.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/einvestingforbeginners.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/einvestingforbeginners.com\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/einvestingforbeginners.com\/wp-json\/wp\/v2\/comments?post=17262"}],"version-history":[{"count":1,"href":"https:\/\/einvestingforbeginners.com\/wp-json\/wp\/v2\/posts\/17262\/revisions"}],"predecessor-version":[{"id":20433,"href":"https:\/\/einvestingforbeginners.com\/wp-json\/wp\/v2\/posts\/17262\/revisions\/20433"}],"wp:attachment":[{"href":"https:\/\/einvestingforbeginners.com\/wp-json\/wp\/v2\/media?parent=17262"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/einvestingforbeginners.com\/wp-json\/wp\/v2\/categories?post=17262"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/einvestingforbeginners.com\/wp-json\/wp\/v2\/tags?post=17262"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/einvestingforbeginners.com\/wp-json\/wp\/v2\/yst_prominent_words?post=17262"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}