Pocket Money For Adults

Sinking Funds

Mar 16, 2025

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pocketmoneyforadults

We all have those things we know are coming up, don’t we?

Like Christmas, birthdays, or getting the car through its MOT.

It’s easy to get caught out, isn’t it?

Suddenly, you’re faced with a big bill and you’re scrambling to find the money.

That’s where sinking funds come in.

They’re like little pots of gold you build up slowly, so you’re ready when those things happen.

Imagine it like planting seeds in the spring, knowing you’ll have a harvest in the autumn.

Sinking funds are just ways of saving for things you know you’ll need to pay for, bit by bit.

Things You Know You’ll Need: Think of things like Christmas presents, holidays, birthdays, or car maintenance.
Saving a Little at a Time: Instead of a big bill all at once, you put a bit of money aside regularly.
Little Pots of Money: You can have different pots for different things, like little treasure chests.

Sinking funds help you plan for those upcoming costs, so you don’t get a nasty surprise.

Sinking funds aren’t just about the money. They’re about feeling more relaxed and in control of your life.

Less Worry When the Time Comes: Knowing you’ve got the money saved takes away that nagging worry.
Making Big Things Feel Smaller: Spreading the cost makes big expenses feel much more manageable, like breaking a big job into smaller tasks.
Feeling Like You’ve Got a Plan: Having a plan for these things makes you feel more organised and in control of your money.
Getting to Enjoy Things More: Sinking funds help you save for the things you really want, without having to borrow money and feel guilty.

It’s about making saving work for you. Making life a bit smoother and a bit less stressful.

Make a List of What’s Coming: Write down all the things you know you’ll need to spend money on throughout the year.
Have a Guess at the Cost: Try to work out roughly how much you’ll need for each thing.
Give Each Thing Its Own Place: You could use different savings accounts or even just jars to keep your sinking funds separate.
Work Out How Much to Save Each Month: Divide the total cost by how many months you have until you need the money.
Put Money In Regularly: Even a small amount each week or month adds up.
Keep an Eye on How It’s Going: Check how much you’ve saved in each fund regularly.
Only Use It For What It’s For: Don’t dip into the money for anything else.

Sinking funds are a really good way to make those planned expenses feel less daunting.