How Creating a Sinking Fund Can Eliminate Stress

It's impossible to save for everything but you can surely try! Having a Sinking Fund can make a sticky situation where you're short on cash easy to handle. Say goodbye to worrying about how you'll pay for an unexpected flat tire and hello to adulting and peace of mind.

We've all had a sinking fund at one point whether we realized it or not. The money that we stashed and dipped into when we were short on cash, was in fact a sinking fund.

Having one will not only make your life less stressful, but you won't feel bad about spending money on well... anything

Saving with a purpose can make planning for the unexpected easier to juggle and balance. Life can be hard enough without having to worry more about money.

Keep reading to find out what a sinking fund is, why you should have one, and a few frequently asked questions.

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What is a sinking fund?

It's money put aside for the purpose of spending since it's not meant to be saved for a long period of time. It's not money you'll carry with you until retirement.

Instead you'll use it when you realize you don't get paid until tomorrow but you want to go shopping today.

Do I need a sinking fund?


Sinking funds can be used to cover expenses that you're planning for such as tuition or a recurring bill. It can even be used to plan for a new purchase. If you want to save for a tablet, instead of taking half of your check and buying it, you can put $100 to the side, and keep adding money until you have enough.

Is it the same as my emergency fund?


Your emergency fund is for emergencies. It's for the COVID disaster that corrupted 2020 and left too many people unemployed.

The goal for an emergency fund is different. Hopefully it will never be spent before you're actually in a situation where it's necessary.

A car accident, being short of rent money, a sudden flight, even a medical bill can count as an unexpected event.

What can I spend my sinking fund on?

You can spend it on anything that you want to plan for.

Maybe you know the following semester you'll have to pay for a class or that you want to go on vacation and have spending money.