Sinking Funds: Preparing for Life's "Expected" Costs
A sinking fund is money you set aside regularly for specific things that only happen occasionally, like car insurance or Christmas.
Long-Term vs. Short-Term
- Long-Term: Covers big annual bills like HOA dues or insurance deductibles.
- Short-Term: Monthly revolving categories like "Happy Hour" or "Beauty."
By saving even $5 a week for these items, you turn a scary bill into a manageable line item.