My Sinking Fund Accounts

A Sinking Fund account is one where you put money into a savings account to pay for future expenses. I did not know that was what they were called, even though I have been using sinking fund accounts for a long time now.

I still question the use of the word ‘sinking’ because the money is actually growing until you decide to use it but there must be some explanation that I am too lazy to look for right now.

Here are the various sinking fund accounts that I use:

Splurge Fund

I use my splurge fund to pay for my splurges so that I do not have to fret over the cost of an item. I put $15 a month into my splurge fund in ING via automatic transfer every month and that money is calculated as part of my zero based budget. I also put in any little snowflake income that I get like when I get those little checks from Pinecone. The $3 check is not a big amount to do anything meaningful with on a regular basis but each time I make a deposit I transfer that amount into the splurge fund. When I see something that I want that is not part of the regular monthly budget then I can use the splurge fund to pay for it as long as there are enough funds in the account.

For example I budget $30 a month for clothes but if I wanted something that cost $45 then I could take the $15 out of the splurge fund. I have not actually done it that way as I prefer to take the entire $45 out of the splurge fund but that is how it would work in theory.

Clothing Fund

Since I just spoke about clothing I do need to mention that I have a clothing fund as well. I put $30 a month into the clothing fund because I do not actually buy clothes every month. Every couple of months I will look at what is in the clothing fund and I if I see an item that I really like then I will purchase it. I do look for sales and discounts when shopping but I am just a little more willing to pay for items because I know that I do have the money to pay for it.

Car Fund

I paid of my car in full last year (yaaaay me!!!) but I am still ‘paying a car note’. I am putting the money that I used to pay to the bank into a sub account in ING and that fund is slowly building up so that I can buy my Lexus RX 350. Actually I do not know what vehicle I will really buy but that has been my dream for a long time and if the times comes that I can afford it I will go ahead and buy it.

Car Maintenance Fund

This fund is a part of the above mentioned car fund but I make a separate deposit into it according to the monthly budget and the current amount that goes into this fund is $20. I know this does not seem like a big amount but since it rolls over every month and is part of the larger car budget then I have enough to cover repairs as they come up. I recently used money from that account to pay for my windshield repairs when my glass cracked after days of snow.

So there you have it. Those are the main sinking fund accounts that I keep in ING. Do you have any sinking funds even if you call them by another name? How do you manage your accounts?

Author: Lulu

Share This Post On


  1. I really like your use of fund accounts. Especially the “Splurge Fund”. Many people would make deposits in funds like car, clothes etc but forget about a Splurge Fund, myself included.

    Post a Reply
  2. Sinking funds are always very handy and they actually come to your rescue at very important time.

    Post a Reply
  3. My only sinking fund right now is my vacation fund. However, since I only put $25 per month in the account, I won’t be going very far for a long while.

    Post a Reply
    • Well at least that is a start and it is better than nothing. At the very least with $25 per month you might be able to cover the cost of a rental car or the hotel fees!!!!

      Post a Reply
  4. You are so well organized with your budgeting. I don’t know if I could ever be that strict. I’m careful with my money, but I never separate expenses or do any official budgeting. I’m sure I’m not getting the most from my money.

    Post a Reply
    • Well you have to make the decision for yourself. Some people work fine without a defined budget, some have detailed budgets and some have very loose spending plans. That is what makes finances so personal. You decide what works for you and then try something new if that does not go so well.

      Post a Reply

Submit a Comment

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