• Tim Ryan

Get that Sinking Feeling

Updated: Jun 23, 2019

We have all had that sinking feeling in the pit of our stomachs. It is that feeling of dread that something has gone wrong, or will go wrong soon. It might be a business proposal that you completed and then realized something additional that should have been added. Or maybe, you heard that a relative has taken ill and you are worried that it might be serious.


That is not the "sinking" I am talking about. What I am speaking of is a "sinking fund." This is a financial term that describes a savings set aside for a specific purpose. Emergency funds and regular saving are set up without a specific purpose defined.

I have two sinking funds, one big and one small.


My large sinking fund is set up for the purchase of a new car. My goal is to have $10,000.00 as my down payment. That and my trade in allows me a monthly payment I feel comfortable with. I tend to keep cars after they are paid off. So, when the final payment is made for the car, I start a sinking fund. I put $500.00 a month into an account for this. After 20 months, I have saved $10.000.00 and I can start car shopping, if I wish.


My small sinking fund is set up for a new grill. I purchase inexpensive grills and they last two or three years. A grill doesn't cost a lot of money, but it is a bit of a shock when my grill dies and I need $400.00 immediately to replace it. I know I will get two plus years out of a new grill, so every time I grill out, I put $2.00 in a cookie jar savings. I grill out over 100 times per year, so I easily save the $400.00 I need to replace the grill when it needs to be discarded. So, these are two examples of savings that will give you better type of "sinking feeling."

Tim Ryan Money Matters of Houson | 2020