Every single year, like clockwork, certain months roll around and suddenly our wallets feel… skinny.
December shows up with Christmas and holiday shopping.
April greets us with taxes.
Your HOA dues sneak into summer.
Birthdays never stop popping up.
And let’s not forget the fun little surprises like car insurance renewals, new tires, or school supply season.
When those moments hit, your heart beats a little faster, your palms sweat, and—like many of us—you grab your trusty credit card and say:
“YOLO—You Only Live Once!”
But then, a few weeks later, that credit card statement comes back with a 20%+ interest rate, and suddenly YOLO feels more like “Why-Oh-Why-Oh” did I do that? Your stomach hurts, food doesn’t sit the same way, and you feel like you’re hustling backwards.
Guess what? You’re not alone. This is real life for so many of us.
But here’s the good news: it doesn’t have to stay that way.
What if I told you that you can plan for those “skinny wallet” months and actually thrive instead of drown? There’s a simple, powerful tool that can change your financial stress into financial confidence.
It’s called a sinking fund.
What’s a Sinking Fund?
Think of a sinking fund as your financial bestie—the one who always has your back, even when life throws expensive surprises your way.
A sinking fund is a savings account (or category in your budget) where you put aside small amounts of money every month for those known-but-irregular expenses.
It’s not your emergency fund. Emergencies are for the unexpected. A sinking fund is for the expected—the things you know will happen but often pretend to forget until they smack you in the face.
Christmas, HOA fees, birthdays, car insurance, new tires, property taxes—you name it.
Instead of being shocked by these bills, you already have the money waiting.
Why It Works (and Why You’ll Love It)
Imagine this:
- Instead of slapping your HOA fee on your credit card, you simply transfer the money you’ve been saving all year. Paid. Done. No stress.
- Instead of dreading Christmas because you know it’ll max out your card, you actually enjoy it—because the money is already waiting for you to buy gifts and celebrate.
- Instead of scrambling when your car tires give out, you just dip into your sinking fund and handle it like a boss.
Sound like a dream? It’s not. It’s math + a little bit of discipline.
Step 1: Make a List
Every year, certain expenses will come around. They’re not emergencies, but they sure feel like it when you don’t plan for them.
So, the first step is to grab a notebook (or my [free sinking fund worksheet here →]) and make a list of all your irregular yearly expenses.
Here’s an example list:
- HOA Fees – $500
- Car Insurance – $1,200 (bonus: if you pay yearly instead of monthly, you usually save money!)
- Home Insurance – Even though mine is wrapped into my mortgage, some people save extra here to pay it in full if discounts apply.
- Christmas – $300
- Birthdays – $300
- Car Tires – $800 (not every year, but when you need them, you’ll be glad you have it saved!)
- Car Sticker/Registration – $75
Now let’s total it up:
$500 + $1,200 + $300 + $300 + $800 + $75 = $3,175.
That’s your yearly sinking fund goal for these categories.
Step 2: Divide It
Instead of waiting until the bill hits, you take that yearly amount and divide it by 12.
$3,175 ÷ 12 = $264.58 per month.
That means if you set aside about $265 every month, by the end of the year you’ll have enough to cover ALL those expenses—without touching your credit card.
Step 3: Adjust and Tweak
Now, here’s the part people get scared of—“But what if the amounts change?”
That’s okay! You can adjust them once a year. I personally sit down every January, look at my upcoming bills, and adjust the amounts.
Some years your HOA might go up. Some years you might spend less on Christmas or more on birthdays. That’s life. The point is—you have a system that catches you every time.
A Real-Life Example
Let me get real with you.
I have to pay car insurance during Christmas season. My son’s birthday is in January. HOA fees? Yup, those are due right at the beginning of the year too.
For years, that combo used to knock me out financially. It was like a triple punch—Christmas, birthday, HOA—all within weeks of each other.
But once I started using a sinking fund? Game changer.
Now, instead of crying over my credit card bill in January, I smile knowing I already prepared months ago.
Why This Will Be a Life Saver for You
When you live paycheck-to-paycheck, even small irregular expenses can feel like emergencies. But when you build sinking funds, you’re taking control.
Think about it: $265/month might feel like a lot, but compare it to the feeling of paying $1,200 all at once, plus interest if it’s on a credit card. It’s not even close.
Sinking funds save you money, reduce stress, and give you the freedom to say “yes” to life without drowning in debt.
How to Supercharge Your Sinking Fund
- Automate It. Set up an automatic transfer into a separate savings account each month. Out of sight, out of mind.
- Use High-Yield Savings. Put your sinking fund in a [high-yield savings account →] so your money earns interest while it sits.
- Track with Apps. Budgeting apps like YNAB, EveryDollar, or Mint make it easy to create categories for each sinking fund.
- Side Hustle Power. Need an extra $50-$100/month? That’s where a side hustle (blogging, freelancing, selling printables, etc.) can come in handy. I’ll be sharing my favorite money-making tips soon!
Where You Can Start Today
If you’re ready to take control, here’s your simple 3-step action plan:
- List your irregular yearly expenses.
- Total them up.
- Divide by 12 and start setting that amount aside monthly.
That’s it. That’s the magic.
Let’s Talk Money-Making
Since we’re here, let me sprinkle in some ideas for how this blog can also work for you financially:
- Affiliate links → Recommend high-yield savings accounts, budget planners, or financial apps and earn commission when people sign up.
- Digital products → Create a printable “Sinking Fund Planner” with worksheets, trackers, and goal sheets. Sell it on Etsy or your site.
- Coaching → Offer a “Budget Reset Session” for busy moms who want one-on-one help setting up their sinking funds.
Your story + your strategy = someone else’s transformation.
Final Thoughts
Money doesn’t have to control you. You can take small, simple steps to build a system that supports you year after year.
A sinking fund is more than just a financial trick—it’s a mindset shift. It’s about choosing preparation over panic. It’s about saying goodbye to stress and hello to peace of mind.
And most importantly, it’s about reminding yourself that you are capable of creating stability, even in the middle of chaos.
So, grab your notebook, make your list, and start your sinking fund today. Future you will thank you.
✨ Pro Tip: Don’t just read this—take action. Start your first sinking fund this week, even if it’s just $20. Small steps create big change.
Con Amor
Dharma
Simple & Candor 