How to use Sinking Funds to Save Money – I explain one of the best tools for frugal budgets.
For more great Instant Pot recipes, please visit InstantPotEasy.com
This week I explain Sinking Funds and how they are an excellent tool for budgeting. Frugal Queen in France Like the menu board …
I have lots of sinking funds. Started last year and it has been a game changer. I have opened a Starling Account which allows me to set up multiple pots. Some things I have a specific savings goal for (such as passports renewals due this year) and other things I just gradually build up month by month as I know I will have to spend money eventually, but I don’t know how much (such as car maintenance and repairs). I have 17 pots. Some are short term savings and others are long term (such as an electric car! That’s going to take a long time, but at least we have made a start and the money set aside for that won’t be spent on other stuff we don’t need). Love your videos Jane and Mike. Merçi beaucoup et bonne année. X
A couple of months ago I saw a video of yours about saving. That inspired me to start using sinking funds. This month I had almost 700 euro’s extra cost; car needed a new accu, my electric bike needed repair, needed passports for the whole family. Luckily I had a saving fund for the car. Next I did grocery shopping with saved cash money for two weeks and I sold lego’s that my kids no longer played with. I did groceries for less money and I will make it to the end of the month without extracting money from savings. The first of august I will pay off my mortgage entirely. Then I start a sinking fund for house repairs and house isolation to get that bill down. Thanks for your video’s. I like it.
I was surprised by the monthly amount for bank fees. Does France not have free/ almost free accounts like many other countries?
Ps hop the question is not too intrusive
I love my minibuffers.. I have plenty, for those yearly or twice a year bills, like garbage collecting, vet, deductables etc. Almost all of my furniture are bought used, but I did splurge on a new good chair last year, and I paid for it through my savings. This year my garden is the biggest sinking fund too.. gravel, dirt, and someone to spread it all out. 😂
I first learned about sinking funds about a year ago – totally changed my financial life. I no longer worry about where $$ will come from to pay for things – as I have sinking funds now and I plan ahead what I will need or want $$ for. It also helps me budget in that when the money from a sinking fund is spent – it’s time to stop spending until the sinking fund is full again. For example I wait to buy clothes until I have enough $$ saved in my clothing sinking fund.
I really wish this concept was taught to me as a teen – totally would have saved me from many $$ blunders.
Hi Jane. thank you for your tips on budgeting. I am doing a similar budget system to yours as well as the saving accounts. Here in South Africa, the bank that I bank with offers free banking at no charge when we have at least a R10 000 saved or invested with them, for senior citizens.
I have been very frugal and don't have an extra TV subscription channels. I am debt free and our house has been paid off long ago, it makes life more easier also to save more. I also buy my cars for cash and have a special account for it. I am in my early sixties and work mornings only. I cannot retire fully as I am looking after my terminally ill husband and an aging mom, so that morning job helps with the extra income.
Jane, many thanks for this video on sinking funds and how you track them. I am totally debt free, retired and living on a very small pension. I have always budgeted and tracked every expense to the last dollar but there was always a gap in my mind that I wasn't covering something. Now I understand it was input and output. The way you have set up the categories is very easy to follow and understand (after viewing it for the third time). So I will now be organising mine in a similar manner. You also mentioned something in the comments that made me pause and think. If the other person's income is no longer available, how am I going to manage. That needs a lot of thought and planning. So thank you for that as well. Best wishes and happy weekend!
Enjoyed your explanation..I use 2 sinking funds & list what is in the account & what amounts go to different bills
I like the way you do the sinking funds in the bank accounts and have a record of what each fund total is.
I like that better than envelopes for myself.
Great info today. Also, sinking funds for me provide two very important intangible comforts: CONVIENCE & SAVES STRESS OF WORRY. Like agonizing day & night of how to come up with the money and what will happen if I don't. 😲😧😬 Loved flowers and pup ending. 💗🤗💗
👍🌹
Thank you for this very clear explanation. I am curious – typically, we are told to 'save for retirement' and then we draw on our savings. Now that you are retired and drawing pensions, i'm curious why so much of your income is put to further savings. For example, if you don't have a salary to replace, but you have 12 months of income saved up. I'm not saying you are wrong, I'm just wondering what the major savings might be for? you are debt and mortgage free. typically people use their pensions to live!!
I had a sinking fund for my daughter. I used it for her wedding, now it’s going to be used fir my first Grandbaby arriving in June.
The food has gone up to €368 a month on your budget.. what was it before ?
Prices are also rising here in Australia.
And there’s shortages of meat, bread, milk, fresh vegetables, toilet paper, paper kitchen towels and tissues, cat food cans in the supermarkets.
Some supermarkets are limiting meat purchases to 2 items.
Thank you. I’m 56 (1965 vintage) and I’m now living way more frugally and using what I have. No longer go to the shops to look, I’m no longer interested. I have enough stuff.
I do admire your cooking and how you make it look so easy.
When I first started I went through the bank statements and wrote down all the SO and DD then what yearly payments we made, added them all together. If bills could be paid monthly then they got changed to that if no extra cost was involved. Like you everything was added together and divided by 12 and this amount is our into the bills account at the start of the month, we have 3 accounts, I leave the monthly DD money in there and transfer the yearly bill money into another account. Long term savings go into the slightly higher interest account. Very very similar to you and Mike …….. Thanks for the very in detail video……… Love Wendy ♥️💋
Thanks so much for this, it was so helpful.
I've moved from an envelope system to a separate bank account for my sinking funds but was struggling to see how to track the individual ones so seeing your columns suddenly clicked with me. I've done my columns this morning and being able to have a view in my head of where everything is feels great 😊
Also wanted to say thanks for the daily updates on facebook/insta as it's comforting to know that someone who has been doing this for a long time is still tempted and has days when it's harder 👍
With my bank I have got 20 different bank accounts and it doesn't cost extra. Its super handy because I can allocate to different purposes. If it wasn't for that my budgeting would not be so good. Anyway. I got myself a dishwasher but I got it 2nd hand super cheap. Some folks where replacing their kitchen and replaced it with a full size dishwasher and since I particularly needed a slimline dishwasher I thought I'd take a chance on it. So far I've run it off the garden tap on the 30 minute cycle and the 30 minute cycle seems not really good enough so I'm going to trial it on the longer cycle. it doesn't seem to have a pause button where you can stop it and get the cheese grater out but I can live with that. It's a very simple machine. Anyway to make it fit I have now just got to detach the cabinet from the wall fill in the space at the back of the old cabinet, do some modifications to the old cabinet and then it will fit. I'm just trying to find a sink insert at the moment. I know I'm going to have to buy a new countertop but the sink insert I'm hoping to pick up 2nd hand somewhere. I might even be able to get away with hooking it up with no plumber having to get involved at all because the plumbing side of it was mainly done when I had the kitchen tap replaced. I got it super cheap about a tenth of the price of a very good new one and less than one fifth the price of a new one that is some unknown brand and very hit and miss. Since its a bit of a gamble, and I would usually never by an appliance like this second hand I'm making provisions in my budget for it turning out to be a dud. Unfortunately the cost of the new countertop has gone up. I've also reassessed things and I'll be replacing the whole kitchen in 2016 and the plan is to of course replace it with a standard sized brand new one then. Anyway this dishwasher is a non digital model so I think they are more reliable. To be honest I keep my sinking funds to a bare minimum. I only have sinking funds for the really big expensive things like insurance and rates. All the little things that prop up along the way I work into my month to month budgets which is why January and February are pretty close to being no spend months and in March I'm doing this whole dishwasher thing and I'm not bringing it forward because I need to make provisions for having to call the plumber (which I think I need to do anyway to sort something else)
Thanks for that detailed vlog Jane. It answered all the questions l had about sinking funds:)
Loved this video Jane. I started sinking funds last Oct. I have a tin with sections in it which are dedicated to car, house ins, hair, glasses, clothes, and Christmas/birthdays. Along side this I have a book that I use to track the cash. I have also set up a long term sinking fund for unexpected costs. I have another book which tracks the DDebits etc. It really does open your eyes to where your money goes and I found it stopped my “trickle” spending lol. I had the idea from a previous video you posted and I’m so grateful to you as it’s helped me enormously. Keep up the great work guys, your fab!!
Your sinking fund video was extremely helpful. We have a sinking fund but you “manage” yours much better and much clearer! You have given us some good advice so thank you!
QUESTION ??? What do you do if you have money left over in your sinking funds at the end of the year? Do you just keep rolling it over and over? Or, can you move it into long term savings? Can you if an emergency happens where you need a newer car right away pull that money out. Do you start a new sinking fund and begin at zero every January? I need a new subfloor for my kitchen, if I set aside a certain amount each month toward that and the floor last long enough it may take me all year to come up with the right amount. however, it may not last can I then take the money from my emergency fund to pay for it? Thanks for the video.
You are the woman after my own heart, Jane. I live in France too. I have the same financial system as yours. I manange my personal finance with 3 savings accounts ( sinking fund in one account, EF in 2 savings in different banks), 2 checking accounts ( thus one without debit card, only with cheque book and I use it very rarely, old fashion one still works for me). My living cost is around 600 Eur, the rest goes to mortgage, insurances, bills (natural gaz, power, water) , internet, savings, sinking fund, investment. With low income, I need to be very strict with money.
Thanks Jane for a great video. I had my first proper budget book for Christmas. Tracking every penny is a real eye opener! I have a mixture of sinking funds plus individual savings accounts. I am currently working on saving 12 months living expenses. A long way to go but everything we save is a small step closer . I love the music you use to go with the beautiful scenes around your home.
I remember when I started sinking funds. I had no idea that was what it was called. There was an expensive watch I wanted so I decided to buy it for myself as a birthday present. I calculated how much I needed to put away every month and automated this amount into a saving account until I had enough to buy the watch. Then it evolved and I opened more saving accounts and my payments are automated when I get paid. I have sinking funds that are short term and long term like a 12 months emergency fund that I am saving towards, travel fund, car repair fund which is for everything from oil changes to emergency repairs, beauty for buying makeup or doing my hair or getting my nails done, Christmas presents fund, next cellphone fund, my last three phones I paid cash for, cash from my sinking fund, this sinking fund goes on for 3 to 4 years typically how long the phone last me till it’s time to buy the next one, next car fund, this is my newest sinking fund, school fees fund. My sinking fund for school enabled me take evening classes debt free and earn my diploma.
Great video.
To be honest I'd never heard of the term sinking fund before, though general I know about emergency fund, but I'm going to try to get started.
Wow! 100 for health insurance!! That's amazing! I''m looking at $700-800 a month (for both of us) after I retire and it's not even good coverage. I don't know what it will be when Medicare kicks in at age 65, but hopefully less.
Thank you Jane for the content you share! I started doing sinking funds for the 1st time in my life (56) a few months ago. I feel more financially prepared for things that will be coming up thanks to you!!
This was really amazing. Very informative. Thanks for your transparency. I think I will refer back to it often as I set up my budget for the year. It is a struggle, but yes, I do have sinking funds for savings goals (home care, monthly bills, family fund, emergencies). It is really quite helpful. I find that I always have what I need for the expenses I have sinking funds for. 🙂
great detail, thanks
Thank you for making this video and clarifying how the process works. I should have been doing this years ago never have but I'm going to definitely use thinking funds going forward and now I feel confident that I can manage it! Thank you so much for showing how you manage them!