sinking fund categories

Disclaimer: This post may contain affiliate links. I would earn a little money with no extra cost to you. The opinions expressed are my own. Read my disclaimer to learn more.

Do unexpected expenses give you a sense of impending doom? Are you tired of sweating through your clothes every time your car starts making a strange noise? 

Fear not, my friend! Sinking funds are here to save the day (and your budget).

Think of sinking funds, and your sinking fund categories as little money-saving superheroes. 

Sinking funds are budgeting tools that help you save for specific expenses over time, so you’re prepared when they come up. It’s like having a secret stash of cash, except it’s not so secret, and it’s not just for emergencies.

With sinking fund categories, you can save for anything from home repairs, a wedding, vacations, to tuition fees, all while keeping your budget intact. Plus, setting up automatic transfers to your sinking funds means you won’t even have to think about it. 

It’s like having a personal financial assistant who’s always looking out for you.

In this article, we’ll explore everything you need to know about sinking fund categories, from how to organize them to what categories to consider. So sit back, relax, and let’s dive into the world of sinking funds.

What is a Sinking Fund?

To put it simply, a sinking fund is a separate savings account that you set up specifically for a particular expense or goal and add money to it every month. And the good news is you don’t need a separate savings account for each savings goal. 

This sinking fund spreadsheet will help you organize all of your sinking fund categories in one, simple to use spreadsheet.

Unlike an emergency fund, which is meant to cover unexpected expenses, a sinking fund is a proactive way of preparing for expenses that you know are coming up in the future.

Setting up a sinking fund for beginners is easy. 

Use sinking funds for expenses like home repairs, medical bills, education, travel, and holidays to avoid credit card debt or dipping into your emergency fund.

Even saving as little as $50 a month can make a huge difference in the long run. That’s like skipping out on one fancy dinner a month or brewing your own coffee instead of shelling out $5 for a latte every day.

We’ve even used sinking funds to save up for a trip to Ireland for our 5 year anniversary – we’re not rich, we’re just good at budgeting (and we really wanted to see some castles).

Sinking funds can be used for all kinds of expenses, big or small.

So, don’t be afraid to embrace your inner responsible adult and start setting up those sinking funds. It’s like having your own little army of piggy banks, ready to tackle any expense that comes your way. You’ve got this!

Related Post: How to Make a Debt Snowball Spreadsheet

How to Organize Sinking Funds

Setting up a sinking fund is like having your own personal piggy bank, except you’re a responsible adult and you don’t have to break it open with a hammer when you need the money. 

Here are some tips to help you set up and organize sinking funds.

Identify your financial goals

Before you can start organizing your sinking funds, you need to identify your financial goals. This will help you determine what expenses you need to save for. Ask yourself questions like:

Once you have your financial goals figured out, use my sinking fund tracker to keep your sinking funds organized in one place. I use ours every single month.

Determine the amount needed for each sinking fund category

Once you’ve identified your financial goals, it’s time to figure out how much money you’ll need for each sinking fund category. Here are the steps you can take:

When you add your savings goals to your budget, you can treat it like an expense and guarantee you’ll save more money. Planning ahead is better than hoping there’s money left at the end of the month.

Set up automatic transfers to your sinking funds

Setting up automatic transfers is the easiest way to ensure you’re consistently contributing to your sinking funds. Here’s how to do it:

By organizing your sinking funds in a clear and thoughtful way, you’ll be well on your way to achieving your financial goals. So grab a spreadsheet or a pen and paper, and get started!

Related Post: How to Divide Your Income with the 50/30/20 Budget Rule

35 Sinking Fund Categories for Your Budget

Sinking funds can be used for a wide range of expenses, from home repairs to tuition fees. By creating sinking fund categories that align with your financial goals and needs, you can ensure you’re prepared for anything life throws your way. 

Here are some common sinking fund examples to consider. I’d say several of these are essential sinking funds, but there’s a lot of freedom and flexibility to create any sinking fund examples that align with your budget and money goals.

Home-related sinking funds

Car-related sinking funds

Health-related sinking funds

Travel-related sinking funds

Education-related sinking funds

Miscellaneous sinking funds

The possibilities for sinking fund categories are truly endless. These are just a few examples of sinking fund categories you can create.

The key is to identify expenses that are important to you and your financial goals.

Add any of these sinking fund categories to help you save money and start using sinking funds in your budget.

Related Post: 17 Cheap Date Ideas with No Money


By now, you should have a clear understanding of what sinking funds are, how to organize them, and some good categories to consider. 

Remember, sinking funds are like your own personal financial superheroes. They help you avoid credit card debt, reach your goals faster, and provide a sense of security and peace of mind.

So, take some time to: 

Next, go read more about the 50/30/20 budget template to help you include all of your sinking funds into your monthly budget. If you want to keep reading about saving money, try sinking funds for beginners to take your next steps.

Our budget and goals changed our lives and it can change yours too.

35 Sinking Fund Categories Ideas to Help Your Budget35 Sinking Fund Categories Ideas to Help Your Budget35 Sinking Fund Categories Ideas to Help Your Budget

2 Responses

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.