My Sinking Fund Method – My Secret to Saving for Everything
Have you heard of sinking funds? Sinking funds could be the number one game-changer to your personal finances. This little money hack will provide you with a clear way to save money and actually trick yourself into saving more. Learn how to use my sinking fund method to change your finances today.
Sinking funds help you set savings goals for specific purchases and can be turned into automatic savings so you don’t have to think about it.
Are you in debt? Around 80% of Americans are currently in debt according to a 2018 study by Comet. It is no wonder saving money is difficult and most shy away from it.
However, you can use my sinking fund method to start saving for just about anything including debt repayment.
The sooner you are debt-free the sooner you can start living and forget money stress. So why not start with a plan and make your plan automatic.
In this post, you will learn the who, what, when, where, and why of sinking funds.
Have you ever considered using a spending journal? You may be thinking, “Why would I want to add one more thing to my “To Do” list?” Yet, tracking your spending could be the one aspect of your budget you are missing to put the “debt free” back into your life. Nonetheless, journals come to mind when writing about feelings and yes, they are more commonly used for this type of writing, yet isn’t your money journey just as important as your emotional journey? These two aspects of life are intertwined immensely.
Writing down what you spend will give you a clear picture of where your money is going and help you solve your debt puzzle. I suggest making this the first step to beginning your budget and obtaining financial freedom.
Spending Journal: A written journal of all the money you have spent that week or month. I recommend tracking your spending for at least a week, but a month would be better and will give you a clear picture of how you spend. Moreover, once you have this in place you can begin to trim the fat off of your budget and use the extra money to pay down debt or save for an emergency fund or retirement.
Sure it would be fun to spend like a millionaire! We could buy a new Birkin bag (or for guys the latest Rolex), however, the truth is many millionaires are very frugal. This is how they became millionaires in the first place. They know the value of a dollar.
Nonetheless, it is easy to become obsessed with the latest and greatest style, toy, gadget, etc. (insert whatever you love to buy here…) Yet, if you are trying to save and contribute to retirement and emergency fund, this is counterproductive.
In today’s post, I’m going to give you a list of ten ways to learn how to curb spending. Even if you aren’t buying big-ticket items like an Ipad, all the small ticket purchases add up. Try writing your spending down for one week and see how much that morning coffee, a tube of lipstick and two dresses from the mall costs you. You will be surprised at the total.
Saving money isn’t always easy. In fact, many of us scrimp and save, just to get by. Nonetheless, there are many easy money tips and tricks to help keep your budget on track. So saving more money means keeping more in your pocket. Learning how to save money every day will help you save money every month and little by little you will build up your savings account. The best part is it doesn’t have to be hard and there are ways to save money on a tight budget.
Unfortunately, over half of Americans do not have enough money saved to cover one month of expenses. According to a recent study by Bankrates.com, 20% of Americans don’t save anything and 47% only save 1-10% of their earnings. Yes, most people are one emergency away from going over the top into debt.
Saving money is important and some of the best ways to get on top of your money problems are as follows:
use a spending journal
create a budget
find ways to save more money
find a side hustle
create sinking funds or separate accounts
plan for retirement
By starting a budget, you will learn how to save money on a daily basis. If you are stuck on starting your budget, get your free budget template here:
No matter what you are saving for, it is best to have a goal in mind. Learning money tips and tricks will help you keep money in your pocket and you will reach your money goals.
The list below features many ways I use to save money. With a family of four, it is easy to go over budget, especially on groceries for kids. However, I have found that if I continue to practice the tips below, I have a few extra bucks in my pocket at the end of the month and I hope you will too.