You may be wondering, “What is a sinking fund”? A sinking fund is a particular savings account within your high-yield savings account (HYSA) to which you contribute regularly for a predefined purpose. This is a reminder that your high-yield savings account will earn more interest than having your money sit in a standard savings account at your bank or under your mattress. I love having money make money! You can set up different accounts or “buckets” for various savings goals here. The intention is to replace the debt burden or plan to replace an asset. Your sinking fund serves a different purpose than your emergency fund.
In addition to planning for significant purchases and having the cash on hand to pay for it, the other bonus is that you get into the habit of saving. Once you hit your pre-determined goal amount, you can redirect that money to another savings goal or your investing account. Your sinking fund goals are enjoyable and exciting, so have fun! Here are some tips to increase your savings fast!
- Get your side hustle going! From consulting to free lancing, there are lots of ways to make money on the side.
- Sign up for local pet or house sitting gigs at Trusted House Sitters.
- Call your insurance company to bundle your car, auto and house for savings.
- Pause your gym membership and take advantage of being outside during warm months.
- Get paid for sharing your opinion on Survey Junkie.
- Earn up to $50 per month by answering survey questions about the news.
- Have a garage sale.
- Sell clothing to a local consignment store.
- Sell products on Etsy.
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