I knew I wanted to increase my emergency fund account (lovingly nicknamed Insurance), but I also decided to add additional accounts to the mix to use as sinking funds/emergency funds. And yes, I’ve already had to use them.
A good chunk of the money went into the Insurance account and sat there.
Another chunk of money went into a sinking fund called home improvement - which was used for the new HVAC system (the existing system was rusting out) and a new hot water heater (the current one at the time was rusted on the bottom, which meant it could spring a major leak at any moment).
I also have sinking funds for the pets, auto, medical (which I use as a place to hold money before transferring it to my HSA account), I have a “personal” account that is for books, movies, travel, visiting local museums, etc. I have a few others, but you get my drift. These are actual separate accounts under the umbrella of my membership account at the credit union I bank at. I also have the control to move the money around accordingly and have had measured success in making sure everything gets handled as I want it to.
That said, it has helped me with handling the medical stuff I’ve been hit with the last few months. It turns what could be financial disasters into simply procedures to get through and re-build the money.
Would you like to know more? Here is the link to Money Smart Family’s web site covering emergency funds and how much everyone should actually have in theirs. It’s been very insightful as it gave a new perspective that will assist me with my financial goals.
More information about sinking funds:
No comments:
Post a Comment