• Rebekah Gamble

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.

Related Post: This is why you can't save money

Related Post: A Quick and Easy Guide to Starting an Emergency Fund

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.

Another example, is wanting to plan for a date night. A Christmas Fund is a HUGE way to prevent holiday blues and not bring unnecessary bills into the new year.

From each check you can put money into one fund [or into multiple] and when you need it, the money will be there.

How do I budget for it?

You can do it the same way you do any other basic budget. Add up your expenses subtract it from your income and see what's left over.

Just remember to be realistic. It's nice to have a sinking fund that actually hits your goal of savings. But if you end up dipping just record the amount that's missing and keep it moving.

This is an ever growing and decreasing fund that comes without guilt.

Where do I save it?

You can do whatever feels comfortable. Try using both cash and an account to see which one feels easier to manage.

Savings account

If you put it in a savings account you can use your regular bank provider or you can choose an account with a high yield percent interest. I use Chase bank and the percent interest is about 0.01%.

For me choosing another bank would not be convenient because there aren't any near me.

But if you live near other branches or are interested in commuting, you can watch your fund passively grow over time.


Another method is saving it in a trusted and safe environment in the form of cash. For this you can use the cash envelope system, or store it anywhere else available.

Cash Envelopes is a saving/ budgeting method in which you store your money in little baggies or envelopes to keep track of your spending/saving

If you don't trust yourself to hold it, you can ask someone else too but keep in mind you want easy access to your funds.

On my Instagram you can see how I make use of storing cash in my easy to use printable envelopes. And soon you'll be able to access your own inexpensive, printer friendly templates by shopping on my website!

What are the benefits of a sinking fund?

You can invest in a shopping trip with friends. Blow $100 on equipment needed to learn how to do acrylic nails at home, or spend $50 on overpriced airport food and know that you still have savings at home.

Your bank account remains unscathed and this is a great way to support your desired lifestyle responsibly.

And with this, you are in full control when it comes to how you set up your financial goals.

In conclusion a sinking fund is a must have once you learn what it is. It's never too late to start one and you wont regret it. Don't beat yourself up over not having a fund already and remember that you are going through life at your own pace.

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Blissful Wallet by Rebekah Gamble 2020-2021

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