Sinking Funds logistics

KatieCutie05 · August 2014

What do you all have sinking funds for, -how do you pick an amount to put in there for something thats not set for you like car repairs or home repairs,
and how do you keep track of all that money, wheres it go?

We only do it right now for our propane bill which is about 600 a year so we have 50 dollars a month on automatic transfer to our only savings account (which makes it free) and only use our savings account for that - everything else is in checking - including our babyfund. But now that i'm thinking about it we have a few things that would help to have an ongoing separate "fund" of so large expenses arent ruining the months progress... Vet bills because we're cancelling banfield plan, life insurance, quarterly garbage bills, home repairs, car repairs, etc. But I feel like i'd never remember to go to the bank to get the cash out to put in envelopes and then we'd use debit to pay for it anyway or it would just be one giant savings account and i wouldn't know how much i have of each "category". Maybe some kind of system? Thoughts

uncreatedsnow · August 2014

I do envelopes. I have a set amount I get out every pay, split it up on payday and forget about it. I only carry "daily needs" around with me, food, gas, blow money. Everything else, hobby, car, personal care, etc. stays in a coupon clutch thing at home in my safe.

I'd like to keep it in the bank, but I'm not good at being able to SEE how much I have without wanting to spend it. I'm getting there though.

formerlyGDaisy09 · August 2014

We do the same thing, but we set $150 a month aside for propane...usually we go through about 800 gallons a year to heat the house through the winter.

I put $75 a month into a car-slush fund...this is for either repairs on our cars or a down payment when we need to buy.

We use care credit to off-set pricy vet bills (0% interest for 6 months on any charges over $200) if a vet bill is under $200 we cash-flow to make it work in our budget, if it's over $200 it goes on the card. $150 a month goes to the card or to savings to anticipate vet expenses.

On top of those things that are set amounts each month, we have savings for: general savings, home improvement, vacation, and electronics/appliances...I take the money left after our budgeted expenses and divy it up amongst those accounts...right now we're focused on a home improvement project so 60% goes there, 15% to savings, 15% to vacation, and 10% to electronics/appliances. our retirement is taken out by our employers pre-tax.

Xstatic3333 · August 2014

We have one big savings account that we use for car repairs, dental, vacation, homeowners', quarterly taxes, and car taxes. It started from scratch recently, and it's on my weekend to do list to make a spreadsheet breaking down how much is for which purpose. If I kept it all in our checking account we would epically fail.

smbenevides1989 · August 2014

I use an excel spreadsheet where I have different tabs for things. I have a monthly tab for the 12 months, a savings tab that is separated by topic (i will explain more), and a weekly budget tab to make sure I don't overspend that week.

Our savings tab has a few categories in it, and each week/month, we allocate the funds into the one savings account we do have. In the excel, I divvy up the money into its specific category, then have the total amount of each of the "category" be added up to see if I match my actual account balance.

We keep all the daily stuff in our checking, but any overtime gets automatically placed in the savings account each week.

hoffse · August 2014

All of my recurring but infrequent expenses go to one place. One day I sat down with our credit card statements and bank statements and tried to go through them to find annual charges: Costco membership, amazon prime, AAA, life insurance, etc. I basically figured out how much I needed for all of them, divided by 12, and that's what I send to one savings account. That way my budget doesn't get blown when Amazon charges me $99 for prime during a month I'm not expecting it.

For us, it's about $55/month. Our taxes and insurance are paid monthly, so we don't have to put that into savings.

For other savings accounts, I finally broke it down into slush, emergency (do not touch), and house projects. I also have an account labelled "baby" but the only thing that goes into it are credit card rewards. I'm curious to see how much we earn before we're ready to TTC. But yeah, the only active savings account we have other than our $55/month one is slush and house. I pull our Roth contributions, vacations, etc. all from slush.

brij2006 · August 2014

We do envelopes now. When we first started out we would just carry it over in the budget, but the money seemed to not be earmarked very well in our checking for those purposes and it got hard to keep track of how much was spent and how much wasn't..

So now we pull the cash out (difference that we didn't use that month) at the end of the month and put it into an envelope. That's mostly with car and house repairs. Last month we budgeted $150 for car repairs and only spent $30 on an oil change. So I pulled out $120 and put it into an envelope marked "car repairs." We budgeted $150 this month for repairs and H's starter went out on his car, plus a few other things needed done to it. So we used the $150 that was budgeted, then have pulled $50 so far from the leftover envelope from last month.

The other things we do sinking funds for are things like my car tires (since they will cost $1,000) and our annual life insurance. I split these out among how many months we have left to save up for them, then pull that amount of cash out of checking at the end of the month, and stuff it into the appropriate envelopes. The month we need to pay for these items, I deposit it into checking at the end of the prior month so it's sitting in there ready to be paid for with a check or our debit cards.

It gets a bit tricky when going to the bank at the end of the month and knowing exactly how much cash you need for each of your multiple envelopes, but it's the only way that keeps us on track with knowing exactly to the penny how much we have put aside for each of these expenses.

KatieCutie05 · August 2014

Thanks, yea i like the idea of digital. Cash has proven to be more of a pain then a help. Something always gets charged to debit and then trying to break the bill and deposit that exact amount is just not working. Some kind of digital envelope system that automatically add that preset amount each month is what i need. Excel would work too if i could figure out how to get the formulas to work.

Sinking Funds logistics

Re: Sinking Funds logistics

Choose Another Board

Search Boards