It may be a little early to talk about Christmas but this tip will show you how a sinking fund can help you pay for gifts without panicking in December and without going into debt.
Like what you heard? Go ahead and share on your social media! Visit trianglecu.org to learn more about how we can serve you and don't forget to follow us on Facebook and Twitter!
Transcript:
Welcome to Money Tip Tuesday from the Making Money Personal Podcast.
It is mid-March as I record this for you. We’ve had a couple of days of warm weather here in New Hampshire but we are all still recovering from Winter and everything that came with it. Christmas is likely the very LAST thing on our minds.. it was just about three months ago after all. If you are like many Americans, it is likely that you scrambled at the very last minute to get gifts for those special people in your lives.. The average person waits till about November to begin shopping and many of us wait until December 15th. Waiting until the last minute to shop is hard enough but it is even harder if you also didn’t have any separate funds saved to pay for it. This is where a sinking fund comes in!
A sinking fund is a separate account containing money to pay for something in the future. This fund or these funds can be used for whatever you want.
Lets say you plan to spend $500 on gifts at Christmas and you start a sinking fund in January. Simply take 500 and divide by 12 months. Just like a bill, every month you would pay (or transfer) $42 to a separate savings or checking account that is specifically for Christmas. You can even label it “Christmas Fund” so you know what you are saving for.
I love sinking funds. It is a stress free way of paying those items that don’t occur each month. I use them for insurance premiums, activities for my daughters like ballet and gymnastics, and Christmas! I know many people who also use them for other items like a new phone every couple of years, or a new car they know they will need to get in the future. You can do this for anything and it can even be for items you pay monthly. I love to do this for my rent every month! I take my rent payment and divide it by the number of times we are getting paid in the month and I transfer that to my rent savings account. On the first of the month, that money is there!
Do you have any additional tips or advice that will help our listeners with this topic or other financial matters? Send us an email! That email address again is TCUPodcast@trianglecu.org or look for our Facebook page and get connected!
Thanks for listening to today’s Money Tip Tuesday and be sure to listen to our other tips and episodes on the making money personal podcast.
Episode 43: Tech Defense Against Financial Crime with Jaime Ramirez CEO of Preventor
Are NFTs a Fad or the Future? - Money Tip Tuesday
Cyber Safety During Global Conflicts - Money Tip Tuesday
March: The Mad Money Month - Money Tip Tuesday
Reasons to Use Your Identity Protection Services - Money Tip Tuesday
Episode 42: Money Matters for Couples
Fraud Prevention: Protect Your Accounts with Multi Factor Authentication - Money Tip Tuesday
Top Scholarship Apps to Try Out - Money Tip Tuesday
Top Money Management Challenges to Overcome - Money Tip Tuesday
The Pros and Cons of Working a Side Gig - Money Tip Tuesday
E41: Maintaining a Positive Mindset to Bring Success with Barbara Hatfield
Practice Stock Trades with Paper Trading - Money Tip Tuesday
Debt Consolidation Loan for Your Debt Payoff Strategy - Money Tip Tuesday
Tips to Manage Money During Inflation - Money Tip Tuesday
Top Money Tips for 2022 - Money Tip Tuesday
Reasons to Use Your Mobile Wallet This Season - Money Tip Tuesday
Episode 40: Building a Career You Can be Proud of - with Becky MacLennan
What in the World is a Checking Account? - Money Tip Tuesday
Tips to Minimize Holiday Financial Fallout - Money Tip Tuesday
Create your
podcast in
minutes
It is Free
Navigating Life After 40
Teaching Learning Leading K-12
Regenerative Skills
The Jordan B. Peterson Podcast
The Mel Robbins Podcast