What You Need To Include In Your Sinking Funds List

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Sinking Funds List

The idea of saving money is somewhat paradoxical in both thought and practice. Like many things, making an effort to save money is easier said than done. However, there are a ton of guides available that will tell you it really IS that easy to set money aside, especially by using a sinking funds list.

Open a savings account, create a budget for yourself/family, and put X dollars into it per month.  You’ve now saved money. If it’s that simple, why does it always feel as though saving were an impossible task?

I put money away each paycheck. I try to be frugal without skimping on holidays/birthdays for others, and I make some worthwhile investments. Yet my savings account looks exactly like it did in January by the end of the year.

The answer to this predicament can be boiled down to saving smarter. Not just saving more, but by creating one or several sinking funds categories to help spread out your savings.

Not only can these help you feel like you’re bolstering your savings account but using sinking funds will help you deal with regular expenses and the wildest life occurrences imaginable with financial ease.

What are Sinking Funds?

Sinking funds, initially a phrase created by Dave Ramsey, are essentially an extension of your savings accounts.

There are several ways to approach this. For simplicity’s sake, sinking funds can be categorized by needs within your life. They can also be built into your budget instead of being filed under the umbrella term of savings.

Instead of simply setting aside money from each paycheck to put away for the future, that value can be broken down by creating a sinking funds list.

The importance of these will vary depending on your current priorities. Generally, it is helpful to strategically save in this manner for an emergency fund, credit card payments (or debt), car repairs, car insurance, medical expenses, or even home repairs.

The one thing you may notice about most of these categories is that aside from insurance, none of these have an exact or set rate from month to month. They are mostly instances that may often catch you off guard during your normal life.

Managing your sinking fund’s list is not a sure-fire money-saving tactic (in terms of INCREASING savings). But it can be a literal life-saver if you begin allocating additional income towards these funds instead of treating them as disposable income.

Where Should I Store Sinking Funds? (And How Can I Calculate Monthly Payments?)

For storing a fund like this, a simple savings account will suffice. For larger funds, it wouldn’t be a bad idea to open a separate account to transfer funds to. If you prefer to manage one account, that’s fine too!

Additionally, the bulk of your sinking funds can be calculated using some mental math. Estimating your electricity usage throughout 6 months is relatively simple.

There are occasions where it can become complex when interest rates are introduced. If that’s the case, you can head here to learn how to calculate it yourself. You’ll find a well-rounded explanation as well as the sinking fund formula.

Creating Your Sinking Funds List

Sinking Funds List Pinterest

Earlier, I mentioned a sinking funds list that could be followed by the majority of people. I want to quickly go over why each of those is important. Also, a few other situations it would be wise to save for.

It’s essential to note that this list will not be wholly comprehensive. Everyone has their own issues to deal with and will assign varying degrees of importance to each item.

Take the time to think about which of these are at the top of your list and work form there. Ideally, you’ll be able to develop your own pattern of how to organize sinking funds to fit your lifestyle while also improving your saving habits.

So what sinking funds should you have? 

Medical/Emergency Sinking Funds List

I wanted to address these two categories first because they are one of the tougher expenses to plan for. It’s not necessarily difficult to put aside the money, but there is no right or wrong amount to save for.

On one hand, you may be young, healthy, and generally cautious. This might mean you would consider allocating a far lower percentage towards essential sinking funds like these.

On the other, you may be somewhat older, had previous health issues, and lie a bit on the reckless side. This might mean you should at least consider putting more towards medical/emergency sinking funds than average.

In EITHER case, you never know what lies around the corner in terms of your health or your family’s. No one may encounter something as severe as a car accident, fortunately, but it is equally unlikely your household WON’T experience a round of sickness during flu season.

As long as you are conscientious of your household’s health trends, saving a little bit here and there will help you prepare for the unexpected to a certain degree.

Automotive/Transportation Sinking Fund

Planning out this fund involves a bit less broad thinking than emergencies, but still encompasses quite a few areas. Most readers will likely want to utilize this fund to manage their payments towards car payments, insurance, gas, licenses, and repairs/maintenance for their personal vehicles.

For the rest that use public transportation, it’s helpful to calculate your yearly expenses for commuting with buses/trains/airplanes.

Additionally, there are often discounts for buying an annual pass to use instead of weekly/monthly passes. This is not universal, so do your best to examine which plan provides the best deal for your traveling habits and is reasonable to save up to.

Home Sinking Funds List

Creating a sinking fund around your home/apartment is a bit of a mixed bag, just like the transportation fund. Setting money aside to pay for rent, mortgage payments, water, gas, and electricity lies on the easier side of developing your home sinking funds list.

Rent and house payments are relatively stable, and you can easily calculate the amount that you will need to allocate each pay period to meet the demands of the year.

Water, gas, electricity, and other utilities are slightly more variable, but it is still simple enough to estimate usage of these quarterly and plan accordingly. It gets a bit more complicated when home repairs and your interior decorative preferences are brought into the mix.

Furniture is fortunately easier to approach. Only purchase what you can afford on your budget. Setting a goal for yourself to buy a new piece for your room is much wiser than trying to compensate for such an expenditure later on. Shopping thriftily is always something to keep in mind if you’re in dire straits. 

Repairs and maintenance for your home should be the primary focus of these funds right behind your necessary living payments (rent) since, again, you never know what could happen. This will directly depend on both your income and living situation.

Kids Sinking Fund

This category is almost self-explanatory, especially if you already have children. There are a few things worth mentioning when designating your income to this sinking fund.

It’s generally a good idea to focus on the academic and extracurricular aspects of saving in this area, simply because it’s not optional to save up for the care/wellbeing of your child, that will come inherently.

Tuition, sports/activity expenses, clothes, and possibly allowances are all facets to consider when determining this fund’s worth.

Miscellaneous Sinking Fund

Having gone through the rest of these in detail, the last major category to explore when considering your sinking funds are a bit more up to your lifestyle rather than a guide.


The first subsection of this miscellaneous category is travel/vacations. Again, this will largely be determined by your age and where you are in life, but it’s always a good idea to save up for your (and/or your family’s) vacations.

If you’re young and single, this probably won’t be a significant goal to save for just yet, but your future self will thank you for anything you set aside.


Next up is the Birthday/Gift/Christmas section. As I mentioned at the beginning, I try to come across as simply a bit frugal and not exactly stingy or miserly.

Putting a bit of your income aside for a gift fund throughout the year will help to take the stress off of heavy spending periods like those found around Thanksgiving to Christmas.

Committing just a bit more per pay period to consider gifts for your closer family/friends is also an effective way to alleviate this stress while avoiding the consequences of every cheesy Hallmark movie.


Finally, and I only put this section under misc. because I personally don’t own one at the moment, is for pets.

Pets, much like children, can be expensive/difficult to care for (and I say that with an extreme looseness in comparing the two, but they do adhere to similar themes when examining expenses).

If you have a faithful, furry companion that you want to ensure lives a happy & healthy life, you will need to dedicate some serious funds towards this sinking fund.

Out of the miscellaneous section, this may be the most important because this is based on responsibility rather than optionality. If you are still on the fence about getting a pet for yourself/family, it is advisable to analyze your financial situation closely before deciding rather than going with a gut feeling. 

I myself am a dog lover, but I’ve heard my fair share of stories where someone went out to buy groceries but ended up bringing home a dog to the dismay of their spouse (though I’m not sure I could say I wouldn’t do the exact same one day, in all honesty). Regardless, try to be as mindful of what your pet’s wellbeing would be as much as how yours would be affected.

24 Ideas For Your Sinking Funds List

  • Home Repairs
  • Appliances
  • Furniture
  • Insurance
  • Utilities
  • Christmas
  • Car Repairs
  • New Car
  • Car Insurance
  • Taxes
  • Dues/Subscriptions
  • Holidays
  • Tuition/Education
  • School Supplies
  • Kids Sports
  • Pets
  • Gifts
  • Clothing
  • Vacation
  • Travel
  • Emergency Fund
  • Medical
  • Dental
  • Life Insurance 

Becoming a Better Saver

So, you’ve read all this and thought to yourself, “Well great, I have an idea of what sinking funds are now. But how exactly am I supposed to keep track of all this crap at the same time?”

“How can I keep my savings on track throughout the year easily?”

I only really have one response, but you can choose your preferred method to keep yourself steady. Monitoring this will take dedication over everything else. If you aren’t a particularly tech-savvy person, you could opt to track this all by hand.

If you do plan to stash cash away instead of using a savings account, try adding an all cash diet to help save even more. 

Simply examine your income, determine your highest priorities using the lists above as a guideline, and designate money to each fund in a manner you deem effective and affordable.

This would ideally incorporate up to 30% of your paycheck, depending on how serious you are about saving. You can always go above/below this amount. Again, this is heavily based on your current financial outlook. The 30% value is not set-in-stone, but it’s in your best interest to save as much as possible.

An alternative to tracking by hand, you can use budgeting apps to help. Sites like Intuit Mint, Personal Capital, or other affiliate links can be very beneficial. Some sites are even able to automatically allocate your income to your savings accounts!

Attempting to save more without setting goals for yourself will result in an odd sense of false security. Despite the extra time and effort required to make sinking funds truly work for you, they can eliminate this feeling of insecurity because you will know that you are safe with your other expenses.

You may find yourself saving more per paycheck, leading to less disposable income. But the ability to take control of your budget will ease stresses you never realized stemmed from financial uncertainty. 

One of the hardest parts about managing sinking funds is initially sorting all of your finances out appropriately.

You may also feel that it is stressful to begin diverting your income to sinking funds. That’s not uncommon.

The best piece of advice I can give is to take your time saving for these sinking fund categories. Focus on your essential sinking funds, namely rent, utilities, and living expenses. Also, put increasingly larger amounts into the other sections listed to the best of your ability.

A great way to build better savings habits and put more towards your sinking fund’s list is by using money savings challenges.

Taking your sinking funds one step at a time, and with a great deal of thought will yield the greatest results. Never forget to save aggressively should you have the means to do so.

Paul W

Hello! I'm Paul, finance expert and founder of The Income Finder. With over 15 years experience in the finance industry, a bachelors from Benedictine University and MBA from DePaul, I'm well qualified and ready to share great insight and tips on money management. Read More