goals

What’s A Sinking Fund? Why Do I Need One?

Are you new to the term “sinking fund”? If you are, you are not the only one because whenever I mention it, I am usually met with a blank stare. Followed by… “What is that?”

Simply put, a sinking fund is a savings that is for a specific purpose. It is NOT your emergency fund. It is a separate fund that you are using to set money aside that will be used for a specific bill or event.

What Is The Difference Between A Sinking Fund And An Emergency Fund?

There is a difference between a sinking fund and an Emergency Fund.