Why Sinking Funds Are Important | Budgeting Tips | Aja Dang
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- čas přidán 26. 08. 2020
- Hey everyone! I'm Aja Dang and today, as I pay off a large bi-yearly bill, I will show you why sinking funds are so important! I talk about sinking funds and saving up for future goals a lot on my channel. I think it's easy to focus on paying off debt and saving up for your fully funded emergency fund and future investments, but don't sleep on the sinking fund. Saving up for a sinking fund allows you to put aside money every week or month for a future bill - that way you're not surprised and scrambling to find money once the bill is due.
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If it wasn’t for you, I wouldn’t even be able to think I could save almost $10k as a senior in college. If you’re motivated, you make it work! Thank you Aja! 😭❤️
Same ❤️
I'm proud of you!
Marisa Lally thank you 😊
girl what?! That's amazing. I don't think I even saved $20 in college.
same & congrats!
Creating a sinking fund for my dental implant was the *BEST CHOICE EVER* 💖💖💖
The white top with your black hair, the red lipstick... you're gorgeous on top of being smart and resourceful 💪👏
this is the first I've heard the term "sinking funds", wow there is A LOT for me to learn
omg really? I love a sinking fund - helps a lot
I feel overwhelmed by finance in general but her channel has been extremely helpful.
I love sinking funds. They help me stay motivated to accomplish goals.
You 100% inspired me to start sinking funds at the beginning of this year! I have a category for christmas gifts, weddings/gifts and bachelorette parties and new to the list is MY OWN WEDDING! I got engaged this week and cannot wait to start planning and preparing!!
Just set up my sinking funds and I love how they feel like fun challenges! It makes saving actually enjoyable
it's like a game! Everyone loves a goal
Sinking funds is what keeps me away from having to use credit cards for big purchases, they are essential in my budget! Great video!!
exactly!
If you have the cash then it’s great to pay with your credit card and then immediately pay it off so that you build your credit score without incurring interest or debt!
LOVEEEE that you added a screenshot of paying the full bill!! So encouraging
I love rewatching this. It reminds me how easy it is. And me not over complicating things
First month of being secure in my job so worked out my budget (first proper month) and set up a separate current account that I can transfer monies to. I have savings for beauty (eyebrows/hair/ facial), cat, e-fund, subscriptions and Christmas. Setting up a standing order for £150.00 and see how we go. I worked out that I will have saved for my hair cut well ahead of the appointment. This is the big win for me knowing I am prepared. I have 2 big car bills to pay for and thus I have set up a fund to avoid this going forward. The preparation appeals to my Virgo nature.
Hope everyone is having a lovely day xxx
Amazing!
incredible!
I need to start saving for Christmas 🎄 thanks for the motivation! Gotta start my sinking fund.
I like how calm your voice is. makes your videos easier to watch for me (vs other youtubers). :)
Sinking funds are great! If you’re someone like me.. even if I have money readily available, I will still feel guilty for spending money on big purchases for myself. If you dedicate money in a sinking fund, it helps me feel like I deserve it (of course I’m talking about indulging in things and not things like insurance) 😋 Great advice Aja~~
I greatly appreciate this video!
I use sinking funds for my vacations and it feels GREAT when it's time to go...fully relaxed, my next big one will be HOA, Taxes and Decor of my new house
Thank you so much for your videos - you were doing your debt free scream when I was just getting into Dave Ramsey. Following along with you as you’ve transitioned from debt to savings has been really cool.
In the next 2 months I'm going to have a full funded emergency fund and I should also have my sinking fund completed for Christmas! I started my Christmas fund back in February and it's been the best thing ever, I already feel better knowing Christmas will be sorted, especially with my job at risk, I know it's going to be a great end of the year!
Amazing value as always!
Love your information, great job, I do same on my car’s insurance have 2, and one truck, paying off the new Honda Accord early $1,200 a month. And paying off house in 2022 as well! Thanks for all the information, my son lives in LA . Been giving him information on money as well. Thanks love the video s
I will be using sinking funds to meet my financial goals.
Just started doing sinking funds this year! 💰Thanks to your videos 😊 they are amazing. I did a sinking fund for contact lenses, moving expenses, and now Christmas gifts/travel. I can’t save much to the funds because I’m still paying off debt but it is really nice paying for big expenses without going way over budget.
I learned about sinking funds from you last year It inspired me to start saving for sinking funds and I too also just paid my car insurance with my sinking funds! 😊 it felt great not having to worry about it.
I didn't even realize it, but I guess I'm doing what is called a sinking fund for grad school! I hope to save $30,000 in 1.5 years. Wish me luck :)
Joy Callejo you can do it!!
@@melaniesmith1928 Aww thank you! :)
Omg good look!!!!
You can definitely do it! Good for you! 🙌🏽🙌🏽🙌🏽🙏🏽🙏🏽🙏🏽
Thanks for sharing. Some Sinking Fund Ideas
Car Maintenance
Car Insurance
Health Insurance (If Self Employed)
Dental
Medical Expense ( Copays and over the counter expense)
Travel
Gift/ Christmas
Birthdays
Home Improvement
Big purchases ( Car, House)
Family Fund
Kids fund
Clothing ( If you are someone that shops once a year Like I do)
Self care/Beauty
Technology ( for phones, iPad etc)
Wedding
I really appreciate your videos! I’ve been able to pay off 3 credit cards thus far. Going to pay off one more next week and then I can just focus on my stupid sallie Mae loans! I very much appreciate you!
I like your financial advice... very practical, disciplined, and useful.
Great suggestions! This is such an important topic to be discussing right now. I really enjoyed this!
You are such an inspiration for women but especially female students Aja! Thanks so much for teaching "us" a lot about finance.
It is SO refreshing for someone to be so upfront about expenses and their financial decisions. Please keep sharing this content, as a similarly aged girl I've been trying to get my finances in order but have no mentors or resources to rely on. No daddy Dang here 🤣
Definitely a sinking funds fan. I’ve got my car insurance due in Feb 2021 and I’m well on the way to having it fully funded before the due date🙌
Thank you for all your videos. I'm very new to this whole journey in managing my finance, Started in January, with all your videos.
This was great! Those couple of dollars every month really do add up!
I think what your teaching people with these videos is a very responsible way to live. its cool to be in control financially.
I would love to see the planning in your sinking fund book, it looks so organised and easy to use!
thank you so much for sharing enjoyed the video so much!!
🙏
I started my first Christmas sinking fund at the beginning of 2020 and holy crap it’s a game changer!! I usually spend $500-1000 every year on gifts. However, I started saving random amounts that add up to $840. I put 26 amounts on a little piece of papers in a Pirouline tin can, (as I get paid 26 times in a year) and then I would take a piece of paper out each time I got paid and would transfer that to savings. I’m usually trying to use my last three checks of the year on gifts and would always come up short and transfer from my savings. This year, I’m able to use the money I’ve been putting back. It’s a great feeling. Thank you for this video!!!
You really are an inspiration to me Aja!! I never grew up with any kind of financial literacy other than never borrow money LOL. Your journey has helped me so much! Just finished school and am getting ready to pay those student loans! I feel more confident because of you!
Great advice and totally doable
Hi Aja, first thing’s first: I love you 🤟🏻 🥰. Second: just because of you, I startet my sinking founds. I have one for my kids (I have 4 - for Christmas & their Birthdays), one for everything car related (insurance, taxes, inspections), one for home- goods, one for my monthly eating & drinking & gas and one for me (obviously the smallest. But as you says: little thing’s stuck up to a bigger one ... one day 🤷🏻♀️. And you know what? Every year at Christmas I’m soooo happy, having the money already put aside. Also the Birthday of my big girls (twins) are only 2 weeks after Christmas- so I already have that money, too 👏🏻💪🏻🥰💫😇. Thank you for your advices. I’m loving that!
Big hug 🤗 from Germany/ berlin 🙆🏻♀️🥰💫😇
Congrats Aja!
Love the cute empower card. Definitely need to check them out
pro trick : watch series on Kaldrostream. Me and my gf have been using it for watching lots of of movies during the lockdown.
@Kalel Henrik definitely, I've been using kaldrostream for years myself :D
Thank you for this. I am going to save up also.
I love this concept💡 people look at me kind of funny when I describe my sinking funds, but has given me such a heightened feeling of financial security. It is so motivating and I would totally recommend it to anyone 🤩
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I have learnt so much about sinking funds from you. I've never done this before and realize I really should. Thinking of 2 sinking funds: Travel and Move Back to Australia.
Thanks for your tips about Sinking Funds. I will try them soon. 😍🥰😘
My first sinking fund was for the IRS! Do your taxes early so you know how much you have to save every payday, the earlier you know your total (if you have to pay in), the smaller your payments will be.
Loved this video! Can you explain why you don't like Ally?
My boyfriend and I use Qapital to co-fund two sinking accounts. One is for mini vacations, which are typically small weekend trips that we want to take within a few weeks or even days notice. We LOVE having the freedom to rent and air bnb at a moments notice and get away. The other is for our three cats, mainly for vet trips and other more expensive costs. We think it’s really important to have that in case of emergency, but even just to take them for any minor issue without feeling guilty for “wasting” money at the vet.
Amazing video!! The amounts you are mentionning are so high compared to France (in term of revenues and spending) but retirement, unemployment insurance, health insurance and taxes are handled by the government so I guess it makes sense I get less at the end of the month. I've always had sinking funds and I used one to pay my apt Taxe and I have antoher one for travel (which is growing thanks to covid) but never thought about doing one for Christmas or birthday and honestly it's a great idea!!
so that's what they're called! okay yeah i have them for : emergency flights/holidays, aesthetic tx ie. botox, professional exams, my mum staying with me so more money to cover bills, and theres' of course emergency fund + surprises fund
I'll be starting some sinking funds thanks to this video!
🙏
I started my sinking funds in March. My car insurance was due so with tax refund and stimulus check I paid the six month premium. Started saving monthly to pay in September. I also set up motor home insurance and tags.
I got the empower card because of you and it’s legit the best app/card ever!
I'm testing out a lot of other financial apps right now and Empower is definitely the best.
Woah it's crazy the difference in car insurance by state. I'm in NH and my monthly payment is $99 and that covers both my husband and I.
Every line item in my budget that is not a fixed expense, I consider a sinking fund even if I am not saving for anything specific in that category. Basically the balance is rolling for each line item. This provides a cushion for unexpected spending, motivation to save, and a way to treat myself from time to time. It feels like giving yourself permission to spend and I never feel I lack the funds for anything.
My house is paid off. Therefore, since there is no escrow account, I have a sinking fund for my homeowners insurance and property tax. This is a huge expense with both due the same month, and the sinking fund takes away the stress. I also have savings on top of my emergency fund for future home repairs and vehicles. It’s nice not having to stress when the AC breaks and costs thousands to repair!
Ma’am where is the top from?? Btw Aja I love your videos - your commitment to paying off your loans helped me pay off ~a third of my debt in 18 months and buy my first home (which I used a sinking fund to save for for about a year)! Love you!
This is so motivating. Thanks Aja 🤍
🙏
Could you share the terms for the car insurance? Would love to hear this!
I love sinking funds. I have one for annual bills (HOA, AAA, car registration), gifts, vacations, car maintenance and entertainment. I love BBVA for my accounts.
I also set up accounts for groceries and gas each month. I got a credit card with them and payoff the card from each account.
Future sinking funds: home improvements.
Im really glad i found your channel. I looked up GUA SHA videos and. Yours was the one that called me so i clicked.....oddly enough, ive been on a debt crushing journey these past few months and have been trying to figure out how to budget with having a fluctuating income. The law of attraction blows me away every time. Ive now subscribed. Watched a handful of your videos. Taken notes etc. I’m wondering if you have a video on how to do your handwritten bullet journaling for finances. I will look to see, but if not I really hope you make one! Thanks for all the knowledge and advice. I really think it’s going to be a game changer for me.
here it is! czcams.com/video/Wzgvat74ymA/video.html&t
My sinking funds are: kids, cars (taxes and insurence), christmas/ gifts. I also have a small and a ”large” emergency fund and dedicated savings for big one-time expences like installing high speed internet. I also like to have a sinking fund for travel, but that’s not necessary at this time...
Love sinking funds! I have one for tuition, car registration and license renewal, Christmas gifts and a new one to pay for an accountant next tax season! Side note: is that normal USA insurance rates?! I’m in Quebec Canada and pay $58 per month (also got 20% back for a few months because of covid)
This was a good tip i'm going to start a sinking fund for my car insurance and my dream car.
How do you organize your sinking funds? Do you keep them all in the same savings account and then just have dedicated amounts you’ve written down for each sinking fund? Also, could you do a breakdown of all your sinking funds and how you organized your notebook?
I believe she has a video on it. Maybe check the 2020 financial planning video on either January or February. It’s hard to pinpoint the exact video, but she covered it for sure
Did you ever get to save $ on your rental payment? So happy for you, Aja. I’ve seen your entire journey and your smiles are so genuine.
Now I need to stop being too miserable because I don’t share the same success with my student loans. 🥺
My sinking fund goal: to buy a Tesla. Thank you for this video!
I’m glad I started a sinking fund for Christmas in July. Everyone should do it and have the saving withdrawn every week or every other week
🙏
I do sinking funds for water and trash bills, life insurance, car repair, and Christmas.
Would be so nice if we have Empower too or something alike here in the Philippines.
I love that the Empower's auto save will hold if it sees your account doesn't have the money to pull from! That's the biggest reason I'm too scared to set up auto save right now with a zero-based budget.
ya that's so important. That's why I didn't like Mint when I had it years ago. Sometimes you can't even sacrifice $20 for an auto-save.
im the same way any bills i can afford to pay in full i do like my renters insurance
Do a video on How much do you invest in 401K versus IRA?
how do you track your different funds? Are there savings accounts that allow you to separate your money?
Thus us good research on how I want to save. Never heard of sinking funds too much before at least enough to understand it.
oh really? I have some other videos on sinking funds as well. I think they're really important.
@@AjaDang I'm looking them up now so i can better understand how to use sinking funds
Miss your videos!!!
I didn't necessarily realize "sinking fund" was the term to use, but you learn something new every day! I have two friends getting married this year (I am in both weddings) so I started a sinking fund for that since it can be relatively expensive to be in a wedding. I also have one for travel (long-distance relationship...hopefully I will be able to use that soon!), and also a moving sinking fund (moving closer to my partner who is in a different country). I am curious if you keep all of these funds in different accounts and if it is all with the same bank if they are opened as savings accounts? Could this subject potentially be an upcoming video? I love following you and I love your attitude! Always so positive. I have begun my debt-free journey and will be working my tail off at it! Thank you for your videos (:
There's nothing wrong with creating separate accounts if it helps you track money and reach your goals. I have five different accounts with the same bank because my bank lets me have up to 10 accounts for free. Some are high savings if I don't plan on taking the money out (emergency fund) and others are just checking accounts for sinking funds as the money will get used..
Also, check with your current bank/credit union. I have a checking account where part of my direct deposit comes in, but also have 4 savings account with same bank (labeled for the sinking fund). Just transfer money into appropriate account. Some people have one savings account, but track how much belongs in each sinking fund on a spreadsheet or paper. Pick which is easier for you to handle and get comfortable.
@@melaniesmith1928 Thank you so much! It is always helpful to get other people's opinions/what works for them to see what will be best for me...very helpful!
@@francescaeve8776 Thank you! This is very helpful! I will be speaking to my bank this week to try and open up savings accounts/see what they offer at my current bank
Definitely starting a sinking fund for Christmas and I plan on buying a car late next year but I’m gonna start saving up for that as well.
🙏
Ok, but it's completely unfair that your face is perfectly symmetrical.
Super helpful info! What sinking funds were you able to do while you were in debt?
the only sinking funds I did when I was in debt were treats for myself (expensive dinners, etc). You have to treat yourself during the journey or else you'll give up
tell us about your insurance policy please!!!
10:54 the cute lock screen 🐕😍
I discovered your channel about a month ago and you've really inspired me! I didn't even know about sinking funds before. 🙈 Do you do a balance of this while doing the debt snowball precovid? Also you make finances way more fun!
I'm not sure I fully understand your question but yes, you're able to build your sinking fund while paying off any debt. If you have any extra money left over, you can add it to your sinking fund/debt/savings fund (whatever your priority is) OR you can add your sinking fund into your budget.
@@AjaDang That answers it. Thank you!
thank u for ur great advice because of u i save more money this year u encouraged me kisses from algeria
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Damn is car insurance expensive in the states!!! when i upgraded my car last year, my insurance went up but for the year my insurance is less than €900 in ireland. Im hoping that my insurance drops some but when it renews in a few months time 🤞🏻
I did love the credit we got from the car insurance. I just looked to see how much I owed. My mom is on my plan and she pays her part. Maybe I will pay my part and just have her part left.
My bank offers additional sub-accounts for sinking funds and this video has shown me how much I underestimate them :) I have one setup for additional payment of my car credit and another one for my future child’s nursery items (even though I’m not even pregnant right now 😂). I’m already tempted to do another funds since I loooooove this kind of effortless savings!
oh yes, definitely utilize those!
Aja Dang already set up two additional: one for Christmas next year and another called „small emergencies” :) super happy about them!
Can you give us the Daddy Dang approved car insurance terms?
I second this! Would love to hear this!!
I've had an emergency and a wedding sinking fund for a couple of months, but I will be adding a couple more like Black Friday sales for a new laptop and a tattoo :)
Any recommendations where to set up emergency fund/ additional checking or savings account? I recently paid off some debt and looking to organize my sinking funds separate from my emergency savings. not sure I want in same bank as my checking and in my face whenever I go to checking 🤣
I use and like Betterment! It’s online only but it’s very user friendly and they let you set up individual cash saving accounts and an emergency fund account.
Capital One 360 savings or Ally Bank are great too
I stuck staring at the watch constantly jumping in time ... 🤣 love your videos. Really helped me get my shit together ❤
So I was planning to pay my student loans off by December but I got laid off in April then got a new job in July. Thankfully I’ve got 6 months of emergency funds saved and started what I guess is a sinking fund for my student loans. I just don’t know how smart is it to pay off those loans in dec when the sinking fund is fully funded even if I have 6 months of savings since we are living in crazy times. My current company is doing well but you never know.
*Honestly right now is not the time to payoff debt, you should be paying the minimum monthly payment. Use your extra money to grow your emergency fund. Specially because I think they're going to make student loans 0% interest until December 2021.*
@@Jesus-kt5dc †rue, guess wait until things go back to normal...whatever normal will be
if you have a fully funded emergency fund (sounds like you do) you could pay off your debt but whatever you're comfortable with.
@@AjaDang for sure, in a few months hopefully I will have a better idea.
I used to call Sinking Funds Yearly Expenses it wasn't until recently that I knew they had an official name LOL . I have some serious ones and then I have some fun ones. I created one for a fun holiday tour to do around christmas time :)
Could you do a video (another) of what your first practical steps were when you started the debt journey in 2016. Ive paid off my debt- in part thanks to you Aja 🙏❤ but I definitely need help with creating extra income/side hustles
Where do you get your lashes done now? Jamie went back to Korea :(
Do you have a savings account for each sinking fund? Great video, new subscriber--really enjoying your content.
yes I do
Love the idea of using Empower to auto save. Too bad they charge $8/mo after your first month. that's $96 a year!
I think Aja is so gorgeous!
YESSSSS!!! the biggest financial goal for myself this year! it's strange but it's the same for me wrt taxes, i always forget that it's a responsibility and when it's tax season i'm like... w o t NUUUUU this is MY MONEY :( so yes, sinking funds, always
oh girl you HAVE TO save money for taxes. I put aside 30% E.V.E.R.Y. paycheck in a totally separate account that's only accessed for taxes. It sucks seeing half my paycheck walk out the door (20% management fees, 30% taxes) but it saves me so much stress in the long run.
@@AjaDang yeahhhh, didn't want to suffer from that anymore and have that set up after this year's heart attack