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What sinking funds do you have?


Halcyon
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I like this. We were aiming for an Emergency Fund and a Car Maintenance Fund. We also wanted to start one of those "6 Months in Savings" funds, separate from the Emergency Fund.

Know what can be fun to watch your savings grow? SmartyPig.

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As we are first time home owners, how do i determine how much certain things will cost? We just got a price estimate for tree pruning, maintenance and tree removal for our property of $2200; it will be less in future years as the prior owners hadn't done proper maintenance, and we wont have 4 trees to remove. But for things like appliances? I have no idea.

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I am a total money nerd (see Dave Ramsey) so I set up sinking funds for tons of things we need to do or are saving to pay.

 

My sinking funds are:

 

heating oil : ( I put 200 a month in every month so that we can cover our cold winters without worry)

 

car/home/farm insurance : ( I put in 150 a month every month and pay it twice a year)

 

Christmas fund : ( so I know the money is always there to have a cash Christmas for the kids)

 

property/school taxes : ( I put money away monthly so we can pay it in full when the bill comes in June/July)

 

large appliance fund : ( I keep 500 dollars in a fund for any re-placement of major appliances ( but we repair instead if cheaper and possible)

 

car maintence fund : ( I keep 1,000 in here to do repairs on our vehicles and tractor ) My husband does almost all his own repair work so it saves us money.

 

medical fund: I keep 300 dollars in a fund to pay any co-pays or prescription plan ( our insurance pays half of prescriptions) costs for doctors/dentist

 

new to us car replacement fund ( I keep 2500 in here to replace any not worth fixing car with a cheap beater car so my husband always is assured of transportation for work) We always buy used and we run a car until it is dead, so this fund is usually only needed once every 5 or so years.

 

home/farm maintence fund : I keep 2000 in here for any problems or upkeep that might incur on our farm or home

 

farm fund ( I put 50 dollars per month in here so my husband can have money available for farm things he needs ( new baby chicks, seeds, tiller rental, wood to build more pens or fencing, ectera)

 

homeschooling fund ( I put 1000 per year in here to buy homeschoolng supplies for my 4 children)

 

pool pass fund ( I put money away monthly for our yearly summer pool pass)

 

vacation fund ( I put money away monthly towards a low cost camping vacation)

 

home improvement fund ( I put money in monthly so that we can save towards one improvement that is needed at a time ( currently just finished filing our re-doing kitchen fund 2,500 dollars for this year. Next year it will be saving towards a new pavillion with removable sides to sell our organic vegetables and fruits under. My husband does all the work himself so it saves us lots of money.

 

When we use one sinking fund I immediatley get to work on re-filling it so that the money is always available for when we need it. We also keep a 6 month emergency fund on hand for large catastrophic emergencies or when the "murphys" hit.

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I love my 'sinking' funds.

 

I have, among others:

 

House Downpayment

Car Replacement

Subscriptions

Emergency Fund

Insurance

Car Repairs/Maint.

Household

Health

Gifts

Bank Withdrawals

Trips

Kids' college/savings

Investments

 

Every category has a 'cap' and I'll throw money at it till the cap is reached, then leave it alone. For example, Gifts is currently set at $500. Once I reach that, any extra money goes to one of the other categories until I use some of the money in the Gifts category. A lot of these sections are for yearly payments or payments once I reach a certain amount ($500 for Investments, for example.).

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As we are first time home owners, how do i determine how much certain things will cost? We just got a price estimate for tree pruning, maintenance and tree removal for our property of $2200; it will be less in future years as the prior owners hadn't done proper maintenance, and we wont have 4 trees to remove. But for things like appliances? I have no idea.

 

 

 

I think I read somewhere that 10% of your mortgage would be a ball park figure for home maintenance. Of course, this is an arbitrary amount and once you've live there longer you will probably have a better idea of what your real costs are. In our current home, we have lived here 3.5 years, we have replaced our sump pump twice. Who knew? But, now we know that is a recurring expense for us.

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Same here... We have to have a plumber snake our basement drain about every 8 months or so. If we don't, the washing machine makes the drain start to back up.

 

I don't have any funds that's aren't listed, except for car license renewal. It's almost $100/car for us and our birthdays are a month apart, so it's nice to be prepared for that.

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I feel compelled to admit that I have never heard the term "sinking fund" before?

Me either. Maybe it's from a money management program about which we are unaware.

 

ETA: Googled it. This link contains a fairly basic description: http://simplemom.net/sinking-funds/

 

It looks like ING is great at allowing multiple accounts. I checked my bank and it does not. :(

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So what do you all do? Set up lots of separate accounts at your bank? At another bank? Do they let you do this? My bank has never suggested this and I don't even know if I could do this.

 

 

wondering the same thing. is this one big account that you've got "divided up" on paper or multiple accounts? i like the idea but not sure how to approach the management of it.

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My credit union allows you to have one account which you can divide up into as many sub-accounts as you want - each paycheck I have to go online and move money from the main account into whichever sub-acct I want. I can only write checks or have access to the money in my main acct......so when I am ready to use funds from my sub-accts I have to move them back to the main acct. I can go online and add/subract/change/whatever to my own sub-accts moving money bwt them and my main account. I hope that makes sense - it's sort of the online version of having many envelopes to save money in. I use the sub-accts to save up for things I have to pay cash for ......like wood for heating, sports, ...and for things that helfty payments....like car payments, insurance, taxes

Myra

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All of our fund are sinking. Going right down the drain. But that's probably not helpful to your initial OP. :tongue_smilie:

 

That's exactly what I thought when I read the title. Why would anyone want a sinking fund. I would much prefer a rising fund.

 

We always have an emergency fund but not separated out. Except for a car fund which right now has sank to the bottom.

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I think I read somewhere that 10% of your mortgage would be a ball park figure for home maintenance. Of course, this is an arbitrary amount and once you've live there longer you will probably have a better idea of what your real costs are. In our current home, we have lived here 3.5 years, we have replaced our sump pump twice. Who knew? But, now we know that is a recurring expense for us.

 

So, 10% of our annual payments? Or 10% of whatever it is we have out as a loan from the bank? I do know we will need to replace our air conditioners within the next 2 years, and that it will be pricey.

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So what do you all do? Set up lots of separate accounts at your bank? At another bank? Do they let you do this? My bank has never suggested this and I don't even know if I could do this.

 

 

Many people use ING Direct (I think it's now called Capital 360). It lets you set up unlimited "accounts" online, so right now I have Emergency Fund, Living Expenses (DH "paid" me in advance for the year) and I will set up Home Repair, Christmas and Vacation Funds today. You can transfer from any account to any other, and it links to your bank account. That way, you can really "see" what you have for each thing you're saving for, as opposed to just having a lump sum in savings.

 

That's how I understand it, anyway.

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Me either. Maybe it's from a money management program about which we are unaware.

 

ETA: Googled it. This link contains a fairly basic description: http://simplemom.net/sinking-funds/

 

It looks like ING is great at allowing multiple accounts. I checked my bank and it does not. :(

 

TD Bank is my "normal" bank, but I use ING for my savings and transfer money into the various accounts that I have set up there weekly. It takes about 2 days for the transfer to go through. So if you need to money be aware you need 2-3 days to see it appear in your regular bank's checking account.

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Sounds like a great idea, but a lot to keep track of.

 

How much does the ING account cost?

 

My ING account has no fees. In fact, they will pay you if you are referred by a friend. (Friend gets $ too.) At least that's how it was when I signed up. It is also free to create new accounts for different buckets of cash. I opened one for each of my girls, and have an automatic monthly transfer to them in order to start a little savings for them. I also have one for my niece's college fund and will open one for my nephew soon. Just makes things easier to keep track of. You can name the account whatever you want. ... I love ING but I wish interest rates didn't always go in one direction (down) when it comes to savings. :/

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I didn't know they had a name. Sinking funds? Yeah, that fits.

 

I have:

 

Savings account

Emergency account

Investment account - I transfer money to this account to cover the auto draws for the investments

Auto loan account - another auto draw account

Auto insurance account - another auto draw account

 

Yesterday I was thinking I need to start a heating oil account.

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Ah. We (dh) do this in Excel with the actual money all lumped in investments or money market accounts.

 

In addition to some of the important ones already mentioned, we have a separate category for landscaping because we often will add trees or shrubs in the growing season. We also have a generic furniture category since those items tend to be expensive and we have trouble finding things we both like, so when it happens I want to be prepared to purchase.

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wondering the same thing. is this one big account that you've got "divided up" on paper or multiple accounts? i like the idea but not sure how to approach the management of it.

 

 

I just have them divided up in my budget. The balance is carried over to the next month. Everything but our monthly bills/investments/long term savings goes into the savings account, the rest is in our checking or broker accounts.

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1) curriculum

2) emergency (which would include emergency travel)

3) car maintenance/repair

4) dental

5) vacation

6) moving expenses

 

So what do you all do? Set up lots of separate accounts at your bank? At another bank? Do they let you do this? My bank has never suggested this and I don't even know if I could do this.

 

Our curriculum fund is a separate money market account. The rest is in one savings account, but we have a list of earmarked funds and the amount that is in each. In a big, big emergency we could drain it all at once, if we had to.

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My ING account has no fees. In fact, they will pay you if you are referred by a friend. (Friend gets $ too.) At least that's how it was when I signed up. It is also free to create new accounts for different buckets of cash. I opened one for each of my girls, and have an automatic monthly transfer to them in order to start a little savings for them. I also have one for my niece's college fund and will open one for my nephew soon. Just makes things easier to keep track of. You can name the account whatever you want. ... I love ING but I wish interest rates didn't always go in one direction (down) when it comes to savings. :/

 

Woohoo! This might be the solution I was looking for. Thanks!

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