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Wednesday, January 21, 2015

Of Sinking Funds and the so-called Regrets

Happy New Year, everyone!

I can’t believe it’s more than a month since the last time I’ve updated this blog (not that I have a handful of readers. Haha). Seriously, I have got so much to share with you such as these topics for tonight:
  • Sinking Funds (Other Savings)
  • “Money Regrets” Budget


I think I've mentioned this in one of my previous entries as one of our financial goals. I just had to quote Dave Ramsey on this that I got from his free eBook that you can download here:

A sinking fund happens when you systematically save for an expense that doesn’t occur every month. For example, let’s say you plan to spend $1,000 on Christmas and it’s the beginning of March. You have 10 months to save, so if you put aside $100 a month to be able to pay for Christmas with cash, then that is your Christmas sinking fund. If you save $90 monthly for the car insurance bill that is due in six months, then that’s your car insurance sinking fund.
It’s your choice where you put the actual money as you build a sinking fund. It can be a simple savings account at your bank or cash in a cookie jar. The important thing is to make sure that you separate it from your other money so that it doesn’t get spent on something else.
As you make your budget, look a few months out and see what expenses are coming that need a sinking fund, then build those into your monthly budget so they don’t sneak up on you.

In short, you are anticipating expenses that are bound to happen and you do something with it by having sinking funds. So for our household, we have sinking funds for the following categories: Car, Clothing, Health, Appliances, Recreation, and so forth.  Each payday we put a certain amount of savings to each category depending on what we plan to spend on it.


You know, just this weekend, I bought a book about personal finance for P399.00 ($9). Then just today, I found out there is actually an eBook version (duh) of it and guess what, it’s for FREE. Well, if you know me, you can imagine my heartbreak! :P Then coincidentally, I found out there are a couple of more people who get these kinds of heartbreaks that they actually have a term for it such as for example “Money Regrets”. I just love this article from one of my favorite writers in Get Rich Slowly, Kristin Wong that you shouldn't miss reading.

Anyhow, thanks to that book I regretted buying, I now have P399 added to my list of so-called “Money Regrets”. And because I can’t simply regret things I did without being responsible or without doing anything about it, I just have to have a budget to sort of correct these regrets! With this, I’ll try to probably cut back on something or earn extra or do something to get the Money Regrets budget back to zero. Thanks to Kristin who brought up this whole idea/feeling of “money regrets” with such clarity. :)

Well, I hope you learned a little bit of something from this entry. I’ll try to share more insights/thoughts as it is one of my goals for 2015 (targeting to post at least 2 new entries a month). There, I’m declaring it! :O

So how ya doing with personal finance? ;)

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