Start a Sinking Fund

Money comes and go very swift

First thing you need to manage the income wisely. You need to keep a track of incoming and

outgoing of your income. if not, you would be out of money by end of the cycle.

Most of us will track the amount that we spend regularly each month.

This is where a sinking fund comes in.

What’s a sinking fund?

A sinking fund is something that you have to spend for sure, but it is not a part of your

regular spending.

Sinking fund necessity pop up once in a while or even just one a year.

It is very hard and tough to pay of such necessity bills and expense without maintaining

sinking fund.

A sinking fund really helps you plan intentionally for the year of spending ahead.

Necessity spends like:

• House repairs/improvements
• Clothes for growing kids
• New school uniform and kits
• Dentist work
• Birthdays
• Festivals
• Holidays

A sinking fund help to remove stress and pressure of not having money when something

creeps up.

We all know the festival season is ahead, you would be having some plans how we would

be celebrating and doing it all.

Having a sinking fund avoids credits and paying high interest.

Sinking fund is not just a saving.

While our saving is used to buy new car, new house or maybe a family holiday. if you use

all your savings, then you have got nothing left when you need to get repair your vehicle or

visit a doctor.

How to save Sinking fund?

Make sure, what you need and how much you need to save. The best thing is to math how

much you plan to pay for everything.

For example:

You know a Holiday will cost you up to ₹30000 (maximum cost, depending on where you

go), so you can split that cost across the whole year.

₹30000 divided by 12 months = ₹2500 a month

Then think about Christmas:

Say you want to spend ₹5000 all in with gifts and food…

₹5000 divided by 12 months = ₹416.66 a month

Make sure your math is realistic with what your budget needs to be.

While spending ₹5000 in one hit sounds massive, if you can save money aside each month

in a sinking fund, it makes it less painful.

Where to save?

Do not keep you sinking fund in your main account. Maintain a separate account to save sinking fund.

It is not important to make the sinking fund is easy to access. It should be accessible but not
like as your main account.

Do not save money in an account that locks it. You won’t be able to withdraw and spend it
as you need.

Most banks allow you to set up separate savings accounts and you can rename them so you

like for what you’re saving.

If you like keeping up your money, then get an account with someone like wisely you can

save for individual goals.

Alternatively with Outlook Money you can create lots of different “pots” and save money

for your own target.