A sinking fund is money you set aside a little at a time for a known future expense — car registration, holidays, insurance — so it never blindsides your budget.
How it works
Divide the yearly cost by 12 and save that amount monthly. When the bill arrives, the cash is ready.
What to fund
Gifts, car maintenance, annual subscriptions, and travel are perfect candidates.
Start today
See the complete budgeting guide to add sinking funds to your plan.