How a Sinking Fund can help you to avoid financial disasters | Beginners Guide
Creating a sinking fund is a smart and effective way to prepare for the unexpected. It’s an essential tool to make sure you are financially prepared when life throws unexpected expenses at you, such as car maintenance, an unexpected birthday or even a house disaster. With a sinking fund in place, you can rest assured that you have enough money saved up to cover any unanticipated costs. By setting aside money regularly, it allows you to deal with these situations without going into debt and keep your budget in check.
Building a sinking fund doesn’t have to be difficult or expensive. There are several simple and cost-effective ways to get started with saving money for your sinking fund. One way is to put aside a big chunk of money when you first set up the fund, but this isn't always the case especially if you are tackling down your debt or have limited funds available.
However, there are other effective methods such as setting aside smaller amounts of money over time and automating payments from your bank account into the fund whenever possible.
- Trash for Cash
Do you have unwanted or unused items lying around your house that you never get around to using? Do cupboards and garages seem to be filled with stuff that you don't need? Trash for Cash is here to save the day!
Trash for Cash is a great way to get rid of all the clutter and make some money in the process. All you have to do is check out all the unwanted or unused items in your home, cupboards and garage, decide what can be sold and then list them on an online marketplace. Once the item is sold, you will receive cash for your trash! This is an easy way to make some extra money while decluttering your home while you are building your sinking fund.
- Build your sinking fund using a non-spending challenge month
The Non-Spending Challenge month is a great way for people to keep their extra cash and put it towards their sinking fund.
During this challenge, you make a commitment not to spend money on anything that isn’t necessary. This could mean no shopping, eating out, or any kind of entertainment. By not spending money on things you don’t need, you can save more and put the extra cash into your sinking fund. This will allow you to build up an emergency fund that can be used in times of need. The Non Spending Challenge month also helps individuals gain better control over their finances by teaching them to think twice before spending and become more mindful about how they manage their money.
- Cancel Subscriptions
Subscription services such as streaming platforms and online shopping have made consumer lifestyle much more convenient. Yes, you got it right, I am talking also about this Amazon Prime 😉
However, we should be aware of our monthly spending on these services, as it is easy to get overwhelmed by the sheer number of subscriptions we have.
It’s time to take a good hard look at our subscription list and make sure that we are only paying for essential services. We should also check for any hidden costs in our subscription services, as this can add up over time and take a toll on our budget. Therefore, it is important to cancel unnecessary subscriptions in order to save money and put them towards our sinking fund.
- Chip in money as a family from your allowances
As a family you can come together and decide that your peace of mind is more valuable than temporary pleasure. This is a wise decision that maybe feel hard to take, but it will save you from big troubles in the future.
Discuss with your family all the benefits included and create a monthly plan for everyone to chip in money towards the sinking fund.
- Get a Jar
Our minds are wired to get motivated when there is a visual aid that enforces the message we want to give to ourselves. Getting a Jar with the Label Sinking fund and drop in cash, like changes, or some extra money on a weekly basis will add up before you know it. A dollar to five dollars a week can make a big difference when something unexpected happens. Probably you can’t cover the entire cost but even the smallest amount counts.
It takes discipline and commitment to build a sinking fund, but it can be done. Setting up an automatic transfer from your checking account to your savings account is an easy way to start building up a sinking fund for future expenses or unexpected emergencies.
Making small sacrifices in your day-to-day budget and being mindful of your spending habits can help you save money for your sinking fund over time. Don’t get discouraged if you don’t have enough saved in the beginning, as the key is to start small and make steady progress toward meeting your long-term financial goals.
Emergencies can always arise, leaving you financially and emotionally strained and unable to handle the situation. Whether it's a medical emergency or an unexpected expense, having access to cash can help you get out of a sticky situation.
Fortunately, there are dozens of ways to get money for emergencies. From taking advantage of discounted prices to creating a road map for financial freedom, this E-Book will explore 101 different methods on how you can find cash when you need it the most. The best part it's on Sale for Limited Time!