You know that sinking feeling you get when something unexpected happens, and it’s going to cost a lot of money? That’s what sinking funds are for, to help you cover those expenses, whether it’s to replace a broken washing machine, take a family vacation, or pay for a planned large expenses like college.
A sinking funds tracker can keep things in perspective and stress-free to keep yourself on track with your savings goals. How does it get any better than that?
What Are Sinking Funds?
If you’re looking for a sinking funds tracker, you likely know about sinking funds or have an account or two set up already, but just in case, it’s a fancy term for savings account.
But, this particular savings account has a specific purpose, such as planned expenses as well as unplanned expenses. Planned expenses might be your upcoming semi-annual car insurance payment or your property taxes – any significant expenses you have that don’t fit in your monthly budget. Sinking fund examples for unplanned expenses could be your car suddenly breaking down and needing repairs or an unexpected medical bill.
Any expenses above what you have budgeted fall into the sinking funds category. It’s basically a savings account you contribute to regularly so your savings add up, and you don’t have to go into debt to take care of irregular or unexpected expenses.
Examples of Sinking Funds
There’s no right or wrong way to have sinking funds. Whether you need an emergency savings account, money for school-related expenses, vacation funds, gift funds, or funds to cover the unexpected, the choice is yours. Just make it specific.
Some of the most common sinking funds examples include – home downpayment, vacation, emergency fund, Christmas sinking fund, and college savings funds. If you aren’t sure how much to save, consider using a sinking funds calculator to see how much you should save monthly to reach your goals.
How Do Sinking Funds Work?
The good news is there aren’t any secrets or magical calculations you must know to have sinking funds.
It’s a savings account with savings goals. That’s it.
We recommend that you set up a separate savings account, one that you can’t access easily. Online high-yield savings accounts are great for this. They aren’t tied to your regular checking account (spend account), so it’s easier to ignore that the money is there and avoid spending it.
You create a budget that allows you to save money each month, putting it toward your sinking funds. It should be a regular line item in your budget, just like your mortgage and utility bills. If you don’t have room to save money in your budget, consider revamping your budget and cutting back in other areas to save money.
If (and when) something happens and you have an unexpected bill, you dig into your sinking fund versus racking up credit card debt or taking out a loan.
Why a Sinking Funds Tracker Is Important
Sinking fund trackers keeps you on track for your savings goals. Whether you’re saving for a specific goal, such as a vacation sinking fund or car sinking fund, or you just want money set aside to cover unplanned expenses, a printable savings tracker will help you see where you are in reference to your goals.
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5 Sinking Fund Trackers
Whether you’re saving money monthly to have money set aside or you have a specific goal, there are sinking funds trackers to meet your specific needs. Here are some sinking funds examples with a savings tracker printable to keep you on track and motivated.
1. Vacation Sinking Funds Tracker
If you have a specific vacation in mind or just want an account earmarked for when you want to take a vacation, a vacation sinking funds tracker is a great way to reach your goals. You set the total amount you want to save and then break down your savings amounts by month, tracking your progress along the way.
2. Emergency Fund Sinking Funds Tracker
Saving up an emergency fund doesn’t happen overnight. You should have 3 to 6 months (or more) of expenses saved for times when life throws you a curveball, you can’t work, or a major disaster strikes your family. The emergency fund sinking funds tracker can track your balance so you know when you’ve hit your desired threshold and can have peace of mind knowing you can handle whatever life throws your way.
Remember to include all your monthly expenses, including the mortgage, car payments, all insurance payments, funds for medical bills or needs, food, utilities, and any other necessities your family cannot be without to cover yourself in times of unemployment or other major disasters.
3. College Savings Sinking Funds Tracker
College expenses increase yearly, so the earlier you save, the easier it will be to afford to send your child to college. Whether you plan to pay their entire way through college or just supplement what they don’t get from federal grants, scholarships, or even student loans, a college savings sinking funds tracker can help you see where you stand.
4. Home Downpayment Sinking Funds Tracker
The more money you put down on a home, the easier it is to qualify for a mortgage. Ideally, you should put 20% down or $20,000 for every $100,000 you borrow. Unfortunately, you can’t save that kind of money overnight, so a home downpayment sinking funds tracker can help you track your progress and see how close you are to your dreams of homeownership.
5. Monthly Savings Sinking Funds Tracker
Saving monthly is important for everyone, even if you don’t have a specific savings goal to tie to it. Having money set aside can help during those unexpected times or even allow you to treat yourself to an unexpected vacation or a fun splurge for the house. In addition, a monthly savings funds tracker can keep you motivated to keep saving as you see your balance increase.
Sinking Fund vs Savings Account vs Emergency Savings
Sinking funds are money set aside for a specific purpose. That’s why a printable savings tracker is a great tool to have. You have a tracker to monitor your progress for an intended goal, such as a downpayment on a house.
An emergency fund is for completely unexpected occurrences such as a tornado ripping through your town and destroying your home, you total your car in an accident, or you unexpectedly lose your job.
A savings account is just where you keep your money. You might keep your sinking fund or emergency fund in a savings account. The label you give it, though, is what the funds are intended for, which is why setting a savings goal and using a savings tracker is so important.
Sinking Funds Tracker FAQ
How Many Sinking Funds Should I Have?
You can have as many sinking funds as you have goals. For example, if you’re actively saving for college, a house, and a vacation, you could have all three sinking fund categories. Keep in mind, though, that you likely have limited funds. You still have to pay your bills and have a life, so keep it realistic to meet your savings goals rather than disappoint yourself.
Where Should I Put My Sinking Fund Savings?
Try putting your sinking funds savings in a high-yield savings account or money market account. Pay attention to the minimum balance required and make sure you can meet it so you get the highest interest rates offered on the account and/or can avoid monthly maintenance fees.
Your sinking fund savings account should be separate from any other accounts, so you don’t have easy access to it and won’t spend it on impulse purchases or without realizing it.
How Much Money Should I Put Into a Sinking Fund?
Everyone will have different amounts they should put into their sinking fund. It depends on your goal and your budget. Don’t set goals you can’t meet because you don’t have enough room in your budget to save that amount. Be realistic but consistent with your sinking fund savings.
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What’s the Best Way to Track Sinking Funds?
Sinking funds savings trackers are the best way to track sinking funds. They are easy to use and take only a few seconds to complete when you save money, but they give you peace of mind knowing where you stand with your financial goal.
Can You Have Too Many Sinking Funds?
You can definitely overwhelm yourself with too many sinking funds. Not only does it get confusing, but you might not have enough money to save in each ‘bucket.’ Even if you do, you’ll minimize how much you save at one time, making it harder to meet the timeline of your goals.
What If There Is No Sinking Fund?
Everyone should have at least a sinking fund for unexpected expenses. Car repairs happen at what feels like the worst time, as do medical emergencies. You want at least one account ready to help you in a time of need so you can focus on the issue and not stress about finances.
The Bottom Line
If you have sinking funds set up, you’ve got a head start. Next, you need a sinking funds tracker to keep yourself on track. Life can happen so quickly, knocking us off track. Before you know it, you’re distracted and forget all about saving money for your savings goal. Use a sinking fund tracker to track your progress, stay on track, and reach your savings goal.
Samantha Hawrylack is a personal finance expert and full-time entrepreneur with a passion for writing and SEO. She holds a Bachelor’s in Finance and Master’s in Business Administration and previously worked for Vanguard, where she held Series 7 and 63 licenses. Her work has been featured in publications like Grow, MSN, CNBC, Ladders, Rocket Mortgage, Quicken Loans, Clever Girl Finance, Credit Donkey, Crediful, Investing Answers, Well Kept Wallet, AllCards, Mama and Money, and Concreit, among others. She writes in personal finance, real estate, credit, entrepreneurship, credit card, student loan, mortgage, personal loan, insurance, debt management, business, productivity, and career niches.