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Sinking or Slush Funds

August 22nd, 2017 at 07:16 pm

In our budget discussions this weekend, I explained to my husband that I get overwhelmed with the sinking funds. The fewer I have the better, but lately we seem to have many more that I'm trying to juggle. And my post here, is just to talk about where we are now, not necessarily to fix it, as that is still part of the process we are working on.

The sinking funds that work really well that we have had for quite a long time are for auto insurance, registration, renter's insurance, and Christmas. I recently added birthday's and that one works really well, also.

Some of the one's that aren't as easy for me are: car maintenance and repairs, eye glasses, phones, and college expenses. Now to be fair these are newer categories I have set up in YNAB as a place to hold funds for the above listed expenses.

In the past, before YNAB, we had sinking funds for the auto registration, insurance, and Christmas. The other short term saving money was put into what I called a slush fund. That money was put into a separate savings account. When a bigger expense like eye glasses came up we would dip into it. And this way worked for many, many years.

I know I could still go back and even set this up in YNAB. I just want to be realistic in the knowing how much to put into the slush fund or these newer sinking funds. Because anything above what we need to save for those expenses, I'd really like to go to our Big Goal.

The nice thing about YNAB is that I can look at each category and see what we spent in the last year or year to date. For example last year, we spent $1,900 in car maintenance and repairs. That is an average of $165 a month. So far this year, we are on track to spend more. We have spent so far $1,537 in eight months, which is an average of $192. I think I want to use an average of the two years and start saving that when we get to January. Our vehicles are ten years old, repairs and maintenance are a given in the coming years.

We don't buy cell phones or eye glasses every year (usually) so that one is different. Much harder to figure out a monthly savings. Although again, looking at past expenses, I could probably come up some average over the last two years and save that amount monthly.

And then there is travel expenses and vacation. This includes flying our daughter here to visit and us visiting here. Last year, our Vacation spending was $9,270. More than half of that was for my daughter's trip to Europe. We had a small vacation to Nashville, and a trip back to our home state. This year our spending for travel is already at $2,526, an average of $315 a month.

Again, not really looking for advice, just explaining some of the things we are looking at for cutting, saving and managing better. These are line items in the budget we need to look at closely, if we are going to make progress on our Big Goal.

Tell me a bit about what you do for managing short term expenses such as the ones I described.

7 Responses to “Sinking or Slush Funds”

  1. crazyliblady Says:

    I have 8 sinking funds, a slush fund, and an emergency savings. What I save in a sinking fund each month is what I expect the average expense for the year divided by 26 (I have 26 paydays per year). I do have a property tax/AAA sinking fund which I save approximately $190.00 per year in. I do have a car fund, but it is primarily a car replacement fund, not car repairs. I also have an escrow fund, because sometimes the escrow account for the mortgage needs more money. Therefore, I find the sinking funds to be life and budget savers rather than hindering me. If the ones you have don't work for you, change it to something that does work for you.

  2. ceejay74 Says:

    I do an annual budget broken out by month. Once our budget had enough room for it, I stopped doing as many sinking funds and put the full amount of annual expenses into the month they're due (CSA in October, Xmas in December, bdays in March) rather than saving a bit every month. Sometimes it's a bit much so I break it into two months (e.g., some years half the Xmas money comes out of the November budget and half from the December budget).

    We do have one sinking fund for tech repairs/upgrades; NT gets $50 per month from his work and I keep that in checking until we need it for phone or computer stuff.

    For other things that are less regular but tend to much bigger amounts, such as vacations and renovations, I identify the amount and when we need it by and then start putting extra money toward it until we get there. Right now we're saving hard for a kitchen, so I put 1/3 of any extra money we get into savings for that. The rest goes to paying back our personal spending deficit, which happened because of bigger than expected medical and travel costs.

    I have a system of spreadsheets for tracking that works for me but would be a bit complicated to explain! We have a checking account and savings account, and some saving up happens in savings while in other cases I keep the money in checking and just note it on my budget spreadsheet.

  3. laura Says:


    Well, I don't actually have a plan in place, and I do think that compounds our problems. So I can't contribute much to the conversation.

    But I've got my listening ears on and I am following!

  4. Livingalmostlarge Says:

    I'm not a budgeter but what we've always done is see what we need to save for annually total it all out and save it monthly. So we do I think I've said this annual budget and break it down monthly. Like car insurance is $2500, then home repair is $6000, car repair $1200, traveling $5000 or some arbitrary numbers. And then trial it up and then decide it by 12 and pull from there.

  5. creditcardfree Says:

    Thanks everyone. I appreciate hearing what you are all doing.

    LAL, I think this is really what I will end up doing. Figuring out an annual amount for the categories which are most important and divide by 12 and save that amount each month. Hopefully, there will be cash leftover for a small slush amount and more importantly cash towards the Big Goal.

  6. FrugalTexan75 Says:

    I have a lot of sinking funds. I like having things separated out in small detail ... although when I did a fresh start a few months ago, I did decide to combine some categories to make things a bit simpler.

  7. LivingAlmostLarge Says:

    You should have a general idea of spending like car repairs. But others are firm like car, home, life, insurance, etc. So you know you have to set aside $x amount annually.

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