Sinking Funds for Beginners | Sinking Funds Explained - How to Set Up Your 2020 Sinking Funds
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- čas přidán 9. 07. 2024
- How to Set Up Your 2020 Sinking Funds - For Beginners!
Have you heard the term Sinking Funds but have no idea how it applies to you? Consider this video Sinking Funds for Beginners. You’ll learn what they are, why you need them, how much money to put in them, and where you should keep them.
After watching this video, you’ll have a clear understanding of Sinking Funds, and you’ll be ready for my next video which will tell you how to add Sinking Funds to your budget.
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In this video I will cover:
1. What are Sinking Funds? - 00:51
2. Why Do You Need Sinking Funds? - 01:06
3. What's the difference between Sinking Funds & Regular Savings? - 01:58
4. What's the difference between a Sinking Fund and an Emergency Fund? - 02:34
5. Types of Sinking Funds - 04:08
6. How Much Money Should be in Your Sinking Fund? - 07:51
7. Where Should You Keep your Sinking Funds? - 09:04
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I had to look up the meaning of sinking fund today, and my only question is WHO would invent such a negative word for a savings account??? Really? Sinking is not what I would ever want to call it!! I would call it *SOARING* or something positive, not sinking!
Please don't tell me this was named or "coined" by Dave Ramsey.
@@Runner8617
All of these envelope stuffers are going off of Dave Ramsey teachings.
Same! I was SO confused too 💀
Exactly!!! I thought the same thing I hate the term sinking ( drowning) fund
For days I have been confused by the word “ sinking “ in regards to saving allocating and saving money. I just don’t get it, and I keep searching sites for better explanations. So negative. Why is this word used, dear folks?
i heard about sinking funds on another creator's video on her sinking funds and i came here to learn more. this is great because it more specific. i love it. my niece's high school graduation is in June and I want to give her a fabulous gift and assist in sending her off to college. this is awesome
Are you kidding me 🙆♀️. This vlog hit it all....👏👏👏. Flawless
Thank you 😊
First around of applause👏🏽👏🏽👏🏽..You touched every topic that I needed to hear . I bought money envelopes and binders, watched sinking fund videos to start saving , but didn’t know how much money to take out ? and I was so confused but I’m glad I found your video thank you!, thank you !, thank you!
Thank you so much! I'm so glad I could help.
I didn’t realize I needed this until I fell down my yearly planner rabbit hole! no wonder I’m such a grinch on Christmas 🎄... it always creeps up on me! This will for sure do the trick. I’m stepping up my budgeting with this method. Thanks for breaking it down so thoroughly!! Bring it on 2021 ! New sub! 🤩
Welcome to the HWS Fam! I know exactly how you feel. When I learned about Sinking Funds I was like WOW. Something so simple that made a big difference.
This was very helpful, and so easily followed! x
I am doing my business math homework and this video helped me SO much ! You know your stuff and I can't wait to watch more ! THANK YOU
I been watching several videos, before starting this 2 months ago.And I found, this really works.
Yes, it has been a game changer for me.
I have been diligently searching for these answers, so for that, thank you so very much!
Wow it seems so simple but your definition of sinking fund vs regular savings was kinda life changing
After three years of learning this I have to go back to the drawing board 😞.. This time around I’m calling it Allocation or Umbrella Funds
Amazing video! Straight to the point, you just cleared my confusion!! Let’s get it :)
I’m so glad I could help. Thanks for watching. 😊
I needed to find out the breakdown of sinking funds. Thank you
It finally makes sense! I have watched a couple videos but yours its the only one that made sense. Thank you!!!!!!
I'm so happy I was able to help. Thanks for watching!
Thank you for giving us a very clear and concise explanation about this meaning. Very much appreciated.
Glad it was helpful!
Learned something new today. Subscribed!!!
One of the best explanations I've seen on the subject. Thank you.
Just heard about a Sinking Fund, thank you for the great explanation!
Thank you for this video.
Wish I knew about this earlier.
They are so great!
Thank you for the information. Great!
Absolutely perfect!!! Everything talked about. I’m sharing with my family 🥳
I'm so glad you enjoyed it!
So well-explained. You're born to do this 👏🏽
Thank you so much ♥️
this video was so thorough and informative! thanks for the great content, shawn -- just subscribed :).
I so glad it was helpful 😁
Thank you so much for this! I was confused on what constitutes a sinking funds versus cash envelope.
You are so welcome!
THIS is the video I’ve been searching for. Clear points, streamlined information - thank you for such a perfect video!
Glad it was helpful!
Thank you, thank you, thank you! 😊 🙏🏽
You are so welcome!
This was great! Thank you for explaining! Much needed info!
You’re very welcome. Are you using sinking funds?
THANK YOU for this video it clears up a lot 🙏
You're so welcome!
fantastic!
Thank you for the explanation! I was confused on the concept of sinking funds.
I'm so glad I could help. Thanks for watching.
Very Helpful, thank you!
Glad it was helpful!
Thank you so much for this great video! Sending love and hugs from Tennessee ❤️🤗
Thank you for all the love ❤️
Loved this video! Thank you so much .
You are so welcome! So glad you enjoyed it!
You answered every question I hae about sinking funds and explained it wonderfully
Thank you so much 😊
Thank you so much for this video. I've watched about 8 people on CZcams stuff envelopes and nobody really paused to explain what a sinking fund is and how it's different from the other envelopes I'm stuffing.
You’re welcome ☺️
you are right! smh
Same here!! I started getting frustrated So glad I found this video! Just subbed
So well explained and really helpful to me. Thank you!
You're welcome. I'm glad it was helpful.
New subscriber!!
Thank you!
You're welcome!
So glad I found your channel
Hey! I'm so glad you found me too! Welcome to the family!
Thank you so much for this video. I will start a sinking fund.
Hey! You will love them. ♥️
Thank you for the breakdown 🙌👍👏
My pleasure!
This was so helpful! I was struggling until I saw this video! Thank you
So happy I could help!
This video was exactly what I needed! Thank you for such an informative video.
You’re welcome 😊
Our goal is to save up for a new kitchen ❤️ I love the sinking fund idea 😍
You can do it!
Oh wow thank you !
You’re welcome 😊
This helped me in so many ways I've watched so many videos and never understood what was going on I'm trying to move into my own place in January and this is what I need thank you for this video
I'm so happy it was helpful. :-)
Great video and I LOVE the name of your channel!!!👏🏿👏🏿👏🏿
Thank you so much!!
This is timely informative I need this thanks
Glad it was helpful!
Super helpful, thank you! Just subscribed
You’re welcome 😊 Thanks for subscribing!
So how many binders do I need? I’m noticing a lot of people have like three different cash binders. And thanks for the information
I knew this thanks for reminding me am working on it.
You’re welcome and thanks for watching 😊
I have Ally savings accounts as well. But, I had no idea about the sub accounts! I just logged in and found the option for sub accounts! Thank you!!
It’s a pretty cool new feature. Give it a try and let me know how you like it.
Healthy Wealthy Skinny So far, I love it. I actually had 17 different Ally bank savings accounts. I was able to get it down to only 6 savings accounts with sub accounts. Thanks so much!
You broke this down so well!! I kept hearing the term sinking funds but no one was explaining it well 😩 thanks for this breakdown!!
Thanks
You're welcome!
Dang I’ve already been using the sinking fund method of a couple of years and didn’t even know it had a name
You were ahead of the game...lol. Thanks for watching.
Hi
What is the difference between miscellaneous and sinking funds?
Such great advice
Thanks!
Thank you for making it so simple for me - more so for a non-financial person. Is a sinking fund an expense or asset(cash/ savings)?
After listening to your thorough explanation, I felt educated on the topic, finally. I also subscribed tonight, November 3, 2021. Thank you so much, great channel.
Thank you so much and welcome to the family!
November 3, 2021 will forever be a very special day. Maybe someday it will become a federal holiday. 🙄
Thanks for the video
You're welcome!
👍🏻😍📍 Got it, ty beautiful
Very informative. You covered everything about sinking funds.
Thank you so much!
Xmas always comes look it’s April already LOL 2023!
Great.
Thanks Kevin!
Where did you get the envelopes and labels from ? Where did you get the binder?
Hi, I make the envelopes and the labels. I have a video that shows you how to make your own. I also sell the labels in my shop.
@@shawnshalest_hws can you share the link ?
Wait so the math work the same for bills/utilities?
Will that work if we have to put 5 (weekly) instead of 12 (monthly). My husband gets paid weekly but we can't budget for either weekly/biweekly.
If I understand your question correctly then yes, it should work the same. Shoot me an email if you want to explain in more detail. shawn@healthywealthyskinny.com
This was a good video
Thank you 🙏🏾
Yep my roof 10k cash for one side of a 3100 sq foot home
This was such a great video! I’m still new to sinking funds and budgeting and you have been so helpful. I wanted to do it the cashless route, just using my bank accounts and using app to track it. I opened up a second savings account for my sinking funds. Because it doesn’t have buckets like Ally does, would I just track it still on how much each category gets? Also, if I’m getting paid weekly how would I go about determining the sinking funds? Thank you so much :)
If you savings account doesn't have buckets two options immediately come to mind. One option is manually keep track of what is in each bucket. You can do this in a notes app. The next option is multiple savings accounts. But I would only do this if you got an account with no fees. When determining how much to put into your sinking funds each week you can either look at the amount that you have available to save and break that amount up or you can look at your goal amount and the number of weeks you have until the date for the goal and then calculate how much you need to save each week. I hope this helps. :-)
should you have a separate savings and separate sinking fund account?
Some savings accounts have a feature that will let you separate your money for different savings goals. With these accounts you don’t need separate accounts. If you have a regular savings then separate accounts would be helpful.
Is a checking account necessary when budgeting? Do I need it to pay bills or can I pay all of that in cash? Is it better to just get a credit card and then pay the credit card off when used?
You can definitely pay your bills in cash. Using a credit card is also a way to go. It’s all about personal preference.
the month you forget to pay that credit card you will pay interest in addition. I think a credit card you pay off before it accrues interest is great for gas or groceries, but it's a dangerous step for major bill like electricity, sewage, cable, etc. It can lure you back into debt fairly quickly.
I feel like too much of my money would go towards my sinking fund and not enough towards my emergency savings. How do I balance all of it? What comes first? Thank you!
There isn't a hard and fast rule. Me personally I built up my emergency fund to the 3 month of expenses point. Then I started contributing to my sinking funds and my emergency fund.
Ask yourself "Do I need an emergency fund?" You have a “vehicle maintenance” envelope for repair emergencies. You also have a “medical” envelope for medical emergencies. What emergency do you NOT have covered?
how do I budget and using the sinking fund method for saving if I don't get paid bi-weekly or weekly and have a staggered paycheck?
have a staggered paycheck?
That makes it difficult. What you could do is use percentages from each paycheck. Rent for example. 30% of each paycheck goes to rent.
I agree with David... having a staggered paycheck does make things more complicated. I also like David's percentage based option.
If you've had staggered paychecks for at least 6 months you can try using past paychecks to estimate for the month. You won't be spot on but you might be able to get in the ball park.
You could use my Zero Based Budget spreadsheet which gives you a place for Planned and Actual.
Great advice!
I have a Sinking fund for each and every category you mentioned. This was a great amazing video. Thanks so much for sharing with us. I have joined your family, I hope you join mine. Can't wait to watch more ❤
You are so welcome! Welcome to the family! Can't wait to check out yours!
Great explanation
Thank you! Do you plan on using them? I’d love to hear how they work for you.
Healthy Wealthy Skinny yeah I’ve been thinking about percentage approach and opening a savings account with Ally/Capital One
I'm pregnant and trying to save for the baby. I want to make sure I can get ready for her when she's here. I'd like to save a set amount up until I give birth.
I wonder if 50/50 is ok. Like 50% invest and other 50% enjoy. The pinch causes depression.
Tfs
You're Welcome!
I’m confused. Is this for people who have a problem with spending reasonably? Bc what difference does it make if the money is in a little envelope are in your account. Just when it comes time to pay for let’s say christmas gifts. Spend within the amount you know is good for your budget. Or when it comes to things like rebuying toilettes, it’s not like it’s a choice on how much you spend on these bc you need things like tampons and toothpaste. Thank!
Sinking funds can be in cash form or in your account. It really doesn't matter. They help when you add them to your budget. Especially if you have a zero based budget where you allocate all of your money.
For example, let's take car insurance. If you pay it every six months instead of monthly you save money. So you would create a sinking fund category for your car insurance and figure out how much you need to save monthly to have the total amount due for the 2 payments you would have each year. The money that you save monthly for this car insurance sinking fund can be kept in your bank account, savings account, or a cash envelope. Whatever works for you. My personal favorite is using a savings account like Ally which allows you to create categories so you can see exactly what you have allocated to each category. I think other banks offer this feature as well.
If we take your Christmas Gifts example, you could pick an amount that you want to spend on gifts. Let's say $200. At the beginning of the year you could create a Christmas gift sinking fund and put $19 dollars in it every month. Then by November you'll have $209 to use for gifts without tapping into the money you have coming in for November.
I put things like toiletries in a household budget category. I looked back at my spending in this area and came up with an amount that covers what I normally would spend. Because you're right, you have to buy these things.
Healthy Wealthy Skinny Thank you! I think I understand it a bit better. I think people putting it into cash instead of just setting a limit on what they spend on a card confused me.
Sinking funds ain’t got nothing to do with loans?
They can... one definition of a sinking fund is a fund containing money set aside or saved to pay off a debt or bond.