SINKING FUNDS | How to Create and Implement Sinking Funds
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- Опубліковано 21 сер 2024
- SINKING FUNDS | How to Create and Implement Sinking Funds
Sinking Funds have changed our finances in a way nothing else has. Join me as I walk through what they are, how to create them, and how to manage them!
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MY 2018 BUDGET PLANNER SET-UP VIDEO
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BOOK: TOTAL MONEY MAKEOVER by Dave Ramsey
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Thank you so much for watching!
Sinking Funds are my new(er) jam! I couldn’t believe how much stress was lifted off my husband and my shoulders when we did this after a few months. The peace of mind of knowing the money is there is completely worth the large monthly deduction.
wow.... clearly needing to go back and watch every single video you've ever done!!! I am embarrassed. I dont work, we have one child, and my husband makes a great living so we've NEVER had a budget. We buy what we want, we go where we want, we spend what we want, eat out when we want, and just spent the evening wasting time in Target spending $200 on things we just wanted, maybe needed. Ugggh.... I'm going to dedicate my year to spending less, planning better, and saving a lot of money! Thanks for sharing.... needing a video on "step one in starting a budget" or "budgeting for dummies!" would be more appropriate! Thank you!!
debi powell You just described my *exact* life about 7 years ago! We were ok. We were not in trouble. But we were NOT proactive. We should have been getting ahead, and we weren’t. We still had a credit card balance even with a good income and relatively decent fixed expenses! The FANTASTIC news is that with a good income, you can make progress FAST if you are truly committed and you have a plan!
debi powell also. Don’t be embarrassed. Most of us (myself included) just never are taught this stuff, and the nature of most people is to consume. We have to teach ourselves otherwise! Don’t be too hard on yourself. Our past behavior can sometimes be our biggest teacher! 💗
So funny I was JUST telling my hubby about your video and how it really has me thinking about how we should keep track of what we're doing. Girl, we could really stash some cash if we didnt act like money was coming through the faucets when we turned them on!! We have NO debt, large house paid off, 2 cars paid off, and zero credit card debt. We do have Home Owners Assoc fees, and of course real estate taxes (to the tune of $10,000 a year if you can believe THAT!) so we still have lots of bills coming in with just the upkeep of our house/and private school for our daughter, etc) And girl, we STILL dont SAVE a lot of money!! We do have investment accounts, (honestly, not sure what all we even have!) I should be hiding in the closet from feeling so irresponsible NOT watching our money (we want to retire comfortably and at 56 yrs old, we need to start stashing it/saving more!) I have an Erin Condren LP and will make a Sinking Fund page at every month, but need to print the Dave Ramsay worksheets and get started! You're a FABULOUS teacher.... thank you! I'm feeling overwhelmed where to start, but doing to give myself a few months grace period to just start, in order to get a grasp of where we're spending/etc. Have a fabulous weekend!
OMG this is me right now as I am watching Jen's videos. I've followed Jen for a couple years with all the EC planner stuff. I've ignored (avoided) this part of it. Our income has been good for a while, although part of it comes in random spurts. We could have been so much far ahead in life if we had been more disciplined. I need to do this for our security.
This is me and my family but going to turn it around in 2019
I was so excited to get home from work tonight when I saw that you had posted this video. I'm just starting to do sinking funds, because I'm in college and I figured I should start this while I don't really have many expenses. Your videos are so great because you explain things so clearly, thank you!
You'll be set for life if you start now!!!!!
Oh my gosh! $500 to go to emergency! Wow..so blessed to live in Canada. Enjoyed how you explained this! Dave Ramsay needs to hire you! 8)
Our healthcare system is such a mess! Grateful we planned, heartbroken for those who struggle.
THANK YOU!!! I have been trying to figure out this budget thing for so long now. I’m good about keeping track of bills and regular expenses such as food and fuel but we never SAVE anything. Whatever is left from paying that we blow on things we feel we need or want. Now mind you it’s never outlandish stuff but things like clothes or eating out.
This video has been my light bulb and I thank you so so much for that!! I plan on sitting down with my husband tomorrow night and going over our bills and budget to start putting money back. I know we have the income we just need to be proactive now.
Finally finished this video! I started using YNAB and I’m hoping I can consistently manage sinking funds without seeing it as free money. Thank you Jen!
just about to start the sinking fund, just made a list of my finances and it scares me how broke I'm am at the end of the month. I don't make a lot and most of my income goes to daycare. It will take me a long time to save . But I need to try and get out of debt. thanks for the video.
I hope you are well 😘
Yes! “If the money is there and doesn’t have “a job to do” I’m going to spend it too! Lol
Car tags and oil changes always sneak up on me until about a month before hand. Sinking funds for the win !!!
Thanks for the explanation of sinking funds. After watching 2018 Budget Set-Up I have decided to make this one of my "highlights" for 2018. My hubby takes care of the finances although I know how important it is to be move involved, plus it gave me another excuse to add to my EC collection. My monthly deluxe arrived yesterday! I'm going to need a separate budget just for my EC obsession. :)
Thank you, Jen. I started following you last year and your ideas and suggestions have really helped me tremendously with my budgeting. Great explanation here of how to manage sinking funds. I tried the sinking funds process last year in March and April. What I realized, being in Baby Step 2, is that all that I was saving in the sinking funds could go towards my debt (gazelle intense). I opted to put the money towards student loan debt and then cash flow things that might come up. I like the idea of starting sinking funds again, but only when my BS2 debt is lowered.
My girlfriend shared this. My teen boys knew about this from Dave Ramsey Personal Finance class and I got the concept but didn't like have envelopes all over the place. Then it hit me: when my grandma died, there was a coupon organizer-type thing in her stuff that I almost gave away but then realized it would be perfect for sinking funds! Need to save for a Catholic conference next summer NOW. Need to save for pool stuff starting now. Car stuff. Clothing. Christmas. Love this so much! Thank you!
I have been "budgeting" for a while and just always took what we had set aside for things that would be in the sinking funds and said "oh we $300 extra because we didn't spend money on clothes or the car this month." Then away it went on whatever at the store or maybe it toward a new washing machine if ours broke down. This plan is a total game changer for me! This was so clear and helpful. Thanks so much for taking the time to break this down so well. I love sinking funds too, now! ☺
💺grabs my seat and notebook.
This is a GREAT video.❤️ Such thorough explanations!!! I started sinking funds a while back and then stopped. I have an a nice emergency fund, but you have motivated me to start up sinking funds again. *grabs notebook and paper* (I’m a paper girl too!!!)
you are changing my life. OMG. this explanation and the fact that you use PAPER. I love, love, LOVE this!!! we went to the dave classes and just couldn't pull it together. i'm going back to mint.com and I'm going to use your monthly budgeting and sinking fund ideas. WE CAN DO IT!! I want peace.
You can do it!!!!!!!!
Hubby and I just started on our sinking funds, and it’s already feeling like a weight has been lifted knowing we have specific money aside for the things that come up. This video really is a wonderfully comprehensive look at sinking funds and you explain yourself so well!
It's such a good feeling! Happy for you!!!
When I did this system I used a wallet from thirty-one.. The wallet Has many dividers works great.. I need to get back to using it.. Great video!
It was nice too hear you prefer paper and pencil!!! Me too!!! My husband makes fun of me for it (lovingly) but he knows that's what i prefer!
I just started budgeting a couple months ago, I love your videos! Currently I'm figuring how I want to budget for 2020 considering prices are starting to increase so I was referring back to this video. I absolutely love your handwriting!!
YAY!! you have explained this in a whole new way for me. I was telling my fiance that we need to separate our money because when he sees that we have x amount in the checking account he thinks its spending money and before I can check my book he wants an answer. He prefers to do thinks mentally and it makes me go crazy because he doesn't account for everything.
Shalonda Swansonp
I love how you just use an extra checking account. That makes much more sense to me than what I've seen people do with withdrawing their paychecks and then doing the cash envelope system and then they'd have to deposit some of that money back into the bank for their subscriptions. Way too many trips to the bank for, so using the checking account is exactly what we are just starting to do. And love paper and pencil too!
Thanks for the explanation -- I just got Dave Ramsey's book and looking forward to digging in to it. I can see where sinking funds can be a helpful tool.
I use multiple supplemental savings. I don’t mind the 6 transactions limit because I don’t take money out of them multiple times a month. Most don’t get touched for months, others like my sinking fund for my dogs is used less than one time per month.
Just caught this video at the tail end of 2019. Though I had an idea of what sinking funds were, watching this video cleared some doubts that I didn’t realize I had...because I’d never actually implemented this. Now that I have these details, I’m eager to put it in action ASAP.
Thank You!
This is exactly what I was looking for. I dont feel so comfortable doing everything in cash. I’m just starting out, and this video explained everything 👌🏽
I’m so happy i stumbled onto your channel! I was originally just looking for planner reviews, but I’ve found so much value from your advice in these! Thanks for the fantastic content!
Thank you, thank you, thank you. I have been watching other sinking fund videos and have never really understood them and how to do them until this video. You did a wonderful job. Now I can make my own and feel confident about it.
I'm so glad you found it helpful!!!
I didn't realize this had a name, but my husband had to go to a budgeting class when he was getting out of active duty and learned this and we started doing it immediately. We actually have a second checking account that we transfer (what we coined our "nonmonthly expenses") into. That way there is no accidental spending of the money at all. It's out of sight, out of mind :) It's really nice to not have to worry about where money will come from when something comes up.
LOVE that they taught this!!!
Thank you so much for this video!!! My husband and I are just starting out with sinking funds so we are super excited to see how this will work for us. Thank you again!!!!
Thank you for watching!
Thanks Jenn -- this made me add more sinking funds to what I already have!
I've never done sinking funds before but I'm totally inspired to do them now!! You explain everything so well. Thanks so much Jen!!
This is so helpful!! I feel like I finally know what to do with my money every month, instead of just letting it all sit there. Thank you!
This is the first time I have ever been able to understand sinking funds, and how they work...you explained it simply and clearly, and it makes so much sense! Thank you, thank you, thank you! And I love the way you use your planner to track it each month. Awesome!🙂
Thank you so much! I'm so glad it was easy to understand! I LOVE SFs and I just love when people grasp them because they really make a HUGE difference!
Your penmanship is gorgeous!!!
Haven’t watched this yet but I was just getting started on this part. So glad you were able to post this today!! Thank you for sharing this info with all of us! God bless you & your family!
Thank you for making such a detailed and clear video. I will definitely be adding sinking funds to our budget.
Such a great video! I'm glad you shared how to manage the sinking fund when you don't have enough yet. So helpful!
HiJen - back to your videos to refresh my memory - your upbeat way of training is so motivating... got out of these good habits and want to go back to managing my time and money better. You're the best! I learned so much from you. Miss you much, hope all is well with you and your family :).
More budgeting videos please!! They’re so helpful!
Very helpful video. I just started BS3 and I still don't feel like I've quite mastered my sinking funds, so it's helpful to see how others manage them. You've given me some good ideas on how to refine my process so that I can keep better track of what I've saved in each category. Thanks!
If my husband contributes to a HSA through work( it's a debit card), should we use that as our medical sinking fund? Great video, I'm learning a lot from you!
Tanya DeMillo exactly my thought! I'm going to use my medical FSA account as my sinking fund. I deposit enough to cover everything annually and I deposit each pay period, so sounds like it qualifies. Unless I feel I need more than what is on my FSA debit card, I'm proceeding that way.
Tanya DeMillo I would say yes as long as it covers your yearly out of pocket max. Ours is $5K for example, but only $200 currently goes in each month from work (though we could add more). So we're still short in that arena, if that makes sense.
thank you for this been needing to do something like this for awhile jut didn't know how to go about it!
Great video! Awesome examples. Ive had sinking funds for years and importance of them is crucial to not going into debt.
Thank you for explaining exactly what sinking funds are. I’m now very excited for starting my own. I will also be subscribing and reviewing your past videos.
This was GREAT!! At first I was like, this is complicated but I totally get it!! It’s brilliant!
I've tried sinking funds and have failed, planning and gathering info to do it again and SUCCEED!
I've been trying to figure out a good way to do this for years. I tend to overthink and over complicate things. You've explained this AMAZINGLY! Thank you so much! I am SO excited to start working on this!
I'm so glad it made it more simple!
This was fantastic! I didn't really understand sinking funds and you explained it perfectly. Thank you!
Thank you so very much for taking the time to explain this and do the video! I am starting mine this month! So excited!
Hi Jen! Great video - thank you! I have been doing sinking funds for about a year now, but I do have them in separate savings accounts, but thinking of switching them into a secondary checking account, for the very reasons you described here. Question about that - in your example family, would they just have a secondary checking account with $5400+ in it, and then they just know how much is in each fund based on their keeping track on paper (or an app)? What I like about the savings accounts is I can have a separate account for each sinking fund, and I guess it worries me a little to have it all lumped together in one account, but it does make sense. Thanks!
Nice to see your face🙂and great video! Finances can be so complicated for some of us.
Omg this is so simple! Thank you for the lesson!
Love your videos! I taught myself to budget in a similar way to this, but your way is much more efficient and easier to track! The only question I have is ... for example with medications, is that for regular medications the family takes such as asthma meds? Or is this for more unexpected medications and you budget for expected medications separately? Thanks x
Both! Although I do include most OTC meds (ibuprofen, cough medicine, etc) in our grocery budget, because I usually pick it up while grocery shopping and count that more as personal care. Anything that isn't in that basic category comes from Rx/Medical.
Great explanation. How-to starts at 9:53
I love excel but as I am a newbie to the sinking fund process; paper and pen are bit easier right now. thank you for the great tips!!
I prefer pen and paper, too!
We just opened two more checking accounts; one for bills and one as a sinking fund!
Hi Jenifer. great video me and my husband thank you a lot for showing us and your followers these amazing video. it's going to help us a lot were beginning to budget. I'm a first grade teacher sometimes its hard for me to keep on track of our bills. It will help us stay on track of our payments. I wish you and your family a great weekend. I also follow you on Instagram. May God Bless You and your family always.
Shayna Marina thank you so much for your kind words! Happy for you and your husband! 💗
Hiii!! I find your videos sooo helpful!! Should I keep sinking funds while trying to pay off debt??? Thanks 🙂
YES! Essential sinking funds are important even when you're paying off debt!
Yes, yes, yes, yes! I have wanted you to make this video!!! I love ALL of your budget content on YT & IG! It is so helpful! My husband and I started our first sinking fund for gift giving because of you. I'm so excited about it. I just used it for the first time to buy a birthday gift and it was SO nice to know I had the money and knew how much I was going to spend!! Thank you for sharing so much about budgeting.
It's such a great feeling! Thanks for watching!
Love this concept, i've never heard of it before and i've never checked out anything from Ramsey. I opened the links you gave us even before you finished as this year it is my plan to get a hold of my finances. Thank you so much for doing this!
living realistically sucks, once you go beyond the learning curve, there is no going back, no matter how frustrated sometimes it can get, this system, you feel got your back. You own something, you need to include it in your budget somehow.
Really want to get into budgeting as a new homeowner! Is this just one separate account or do you need one for each fund?
Thank you for posting!! This is really helpful! We for sure can't put that much in monthly but we will be doing what we can!
This was such a great video and everything you said resonated. I have to start this!
You did a great job explaining this! I could've have said it better myself! I'm with you too, I love having sinking funds! I track my in a very different way, but in the end its the same result. And I completely agree with putting your sinking fund money in a different account!! I'm the budgeter in my family and my husband just goes with whatever I said, he want nothing to do with it, but when I tell him we have x number of dollars left over for the months and he compares that to the bank statement he saw in the mail. He says how it that possible. So I have to explain and then he say ok never mind. I'm looking into moving all our sinking funds to a different account very soon. We are debt free and one the SF you didn't mention was property and school taxes. I save for these and pay annually in January. Thanks for sharing and have a great day!
Ah, yes! Our property taxes are all in escrow - included in our monthly mortgage payment!
When does the sinking come into play for the Dave Ramsey steps? Is that after or during when you’re saving for your emergency fund? Before after or while you’re paying debt?
Necessary sinking funds are part of a complete budget, so they come first. Depending on how intense you are on your debt payoff, you can add the less-necessary ones later!
applejuicyjuice on the EveryDollar app/site it allows you to turn certain items into a sinking fund. It has a piggy bank logo.
Thank you so much for this, note I have a better understanding of sinking funds and how to budget for those categories
Okay legit this video is awesome. I really appreciate how much detail you went into showing how it works.
So I have always done this but would quit because I thought I was overthinking things. Ive used envelopes since college but this coming together like is a big wow. 2ndly I love love love that you included the tithing. Thank you for all your hard work
BRAVO! This video.is life changing for me. Thank you! 💖💖💖 Keep these videos coming! I.am going straight to work tomorrow & creating my sinking fund! 💖💖💖
This is a game changer! Amazing. quick question. do i have to start at the beginning of the month or can i start doing a sinking fund like today. I use the Every Dollar app but I love seeing it on paper. Love your tips.
Also, my company that I work for pays for my health insurance and I have a HSA account that my company funds. Should I still have the Medical budget?
The bank that I use doesn't charge for moving money around more than 6 times. I have a Savings account for purchasing a home. should I make a savings account for the Sinking fund?
Great questions! I'd budget whenever you want to in the month as long as you're consistent! If you have an HSA, I'd just cover the gap between what your HSA holds and your out of pocket. Check with your bank on the Reg D charge, because it's a federal fine, not a bank fine. I'd keep the SF separate from house, yes!
I thought I was doing all I could with a budget and using only two accounts (chq. & sav). I was so wrong. I got confused and wondered why I had transferred, for example, $20 into my savings account. This video answered the last couple of questions I have about sinking funds. Now I can't wait to go to the bank I deal with and open six other accounts. I use EveryDollar so I need to set that up as well. I've never been this excited about budgeting and saving up for important things.
Great video, I'm wanting to start a sinking fund and this was very helpful and an eye opener for sure.
Just loved this. I'll probably be watching it number of times! Thank you!
Great Video, this should be taught in high school Thanks for sharing
this is great...question...what do you do first? sinking funds first or debt pay off? right now all extra cash goes to debt pay off but it seems sinking funds would stop the swiping of credit cards in emergencies though.....
First, a complete budget with at least necessary sinking funds! Then, $1,000 EF, then debt payoff. Exactly for the reason you said!
Awesome tutorial! Can't wait to check out your other videos.
Thanks so much Jen. You put this important topic in understandable terms. And your example was spot on! Great video. Thanks again 😀
YOU ARE THE BEST! Now just have to get my other half to face the budget!
brownmommylife I'm in the same boat! I wanna just DO THIS! But I've gotta butter the hubs up with coffee and the promise of a short budget meeting. 🙄
What are some tips for initially getting started. I've been working on this, but I never seem to get them all going at once like I would like, I mostly just end up focusing on main things that are coming up quick like christmas, car insurance or school tuition and etc.
Ok is sinking funds after you pay of your debt or during while u still have debt.
Paula Thompson necessary sinking funds before you pay off debt! You can add the wants in later or a little at a time! Except I’d keep spending money ;) everyone needs a little freedom to spend.
JenPlans thanks jen for clarifying
You are awesome Jen! Thank you so much! I always had problems starting budgeting and I finally really get it and it is because of you and your videos!
Thank you so much! I'm so glad it's been helpful!!!
Thank you! I was wanting to know how much and plan to put end amount on envelope
Appreciate this video! Cant wait to see what your coming out with next!
Excellent explanation. Thank you for this video.
Hi! You're video is an eye opener. Where did you get the monthly cash flow that you have used? 😇
Excellent step by step and expainations of why and how!
I just came across your channel and this video was super duper helpful... thank you sooooo much!!! I'm just starting to budget I'm pretty good with money so hopefully this will be pretty easy to stick with.. God bless!!!
Thank you from the single mom! We save quite a lot, but I’d like it better if it were done more precisely.
Your budget videos are so helpful! Thank you so much !!!
This is amazing, thank you! Question: Our water and garbage bills come out every 3 months, would those be considered sinking funds?
Ashley - Ideally, do try to cash flow these quarterly expenses by separating the amounts you need to pay for them by deducting (or saving) them from your paycheck the month prior to payment. This said, if the amounts for each are too high to extract them within the prior month, then by all means add these costs and then plan to deduct/save these amounts in 3 equal parts from your monthly paychecks or 5 to 6 equal parts from your biweekly paychecks. By the time those bills arrive to you, you will ready to welcome them at your door. You go girl!
I feel bummed because I feel like we barely make enough to cover our regular monthly bills. I don’t know how to get to this point.
Jacqueline O’Connell one day at a time. Start where you are and move forward! Each month is a new start and up for tweaking.
This was so helpful! Thank you for walking through it all!
This is one of the realest, and best budgeting videos I’ve ever seen. Extremely helpful - thank you!! Previously I’ve just dumped money into a misc savings, with no idea what I would need it for and always hesitated to use it! I’m going to look into utilizing these going forward.
Thanks a lot for your explanation. Is a very specific video. How can I determine if I have a lot of categories in sinking fund?
There really shouldn't be an issue of "too many" because it varies from person to person what is necessary. We have 20-25, because that's the life stage we're in (homeowners, with kids, etc). I would just go by what is necessary in your personal situation!
I have an account like that. I call it my ESCROW account. I got the idea from my mortgage escrow account. I try to start by having 2% of the value of my house. Once we got that amount I added a minimum of 6 months each of living expenses. This took us more than 2 years while still paying a minimum of 50 dollars more on my mortgage. During this timeframe emergencies came up but we took care of them. After all that was done I added what you called a sinking fund savings inside my ESCROW. I also have an emergency account that I call shit happens account (SHA) because shit happens. I keep them in a savings account that is hard for me to access. That way I am not tempted. My SHA is kept in my savings account and it's the middleman for my ESCROW account.
Not to be weird but qq, I make about 200k a year and no debt besides a mortgage and car note. Are sinking funds worth doing? I have medical and dental through work. I’m not sure if it is just better to increase my emergency fund.
Great great video honey. I learned a lot. And it helps me cause I’m bout to buy my first home. So this will be what I will be using. Thanks again honey
Wow. Neta, que video tan mas genial. Encerio explicas las cosas, claras como el agua. Mucho amor y bendiciones para ti y tu familia.