11 Sinking Fund Categories Your Budget Needs

Sinking Fund Categories

Use these Sinking Fund Categories to get your finances in Order

Sinking funds are an amazing tool to use in your financial journey. They will help you to plan ahead for expenses and stay on track with your budget.

But what are sinking funds and what categories of sinking funds should you use in your budget?

Well, you have come to the right place!

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What is a Sinking Fund

A sinking fund is essentially a specific, short term savings account. You set money aside each month for a planned, expected expense.

That way, when that expected expense comes up, you have the money set aside and ready to pay for that expense.

Basically, they are a BIG budget saver.

Think about it this way. You are budgeting every month, telling every dollar where to go. But, suddenly, it is Christmas again.

Even though you knew it was coming, some how it snuck up on you financially. And, instead of having money saved to spend on Christmas, you end up relying on your credit card and paying Christmas off some time later.

Yes, you were able to have a nice Christmas, but your budget just got blasted.

Has that ever happened to you? I know it has to us!

In fact, during recent holiday seasons, Americans racked up over $1000 (each!) in holiday debt. 

But having a sinking fund can let you be prepared for the holidays, and other upcoming expenses, without increasing your debt load. 

When starting with sinking funds, it is definitely possible to feel overwhelmed or want to save for every possible expense at once. But, don’t do that!

Pick some sinking funds from the list that are most important to your personal situation and start building those. You can always add more later on. 

Here are some good sinking fund ideas and examples to help you get started.

RELATED ARTICLE: Save $1000 Fast

Sinking Fund Categories


As I mentioned before, Christmas is an important sinking fund to have/ start (If you celebrate it).

Rather than trying to figure out how to pay an extra several hundred dollars for the holiday, all in one month, the better option is to save a little bit each month.

This way, when the holiday season comes around again, as it does every year, you will be ready for it and won’t need to rely on debt to pay for it.

Car Maintenance

Having a sinking fund for car maintenance is so helpful for those routine maintenance expenses (oil changes, tune ups) as well as for larger repairs, if needed.

We have paid for, older cars. As such, we know that we will have some larger repair bills coming our way eventually.

In fact we recently had a $2000 repair bill for my van. We were able to manage, but it was stressful. If we had been more intentional about building up a sinking fund for car maintenance, it would not have been an issue.

So you can bet we have added a car maintenance sinking fund category to our budget.


Similar to Christmas, birthdays come around once a year, on the same day.

Buying birthday gifts, paying for party supplies, going out to dinner or doing a fun activity are all awesome! But, they can seriously wreak havoc on your monthly budget if you haven’t prepared in advance.

Other gifts you might consider are anniversaries, mother’s day, father’s day, weddings, baby showers, etc.

It can be hard to know if a friend or family member will have a big life event (wedding, baby, etc.) but having a small budget via a sinking fund for such an occasion will allow you to be prepared if/when that happens.


It is still important to have fun! And planning in advance for how you will pay for your vacation will make the experience much more fun.

Whether is it a big vacation or a small one, having the money in advance will take the financial stress out of the equation.

If you are in debt, I do not recommend going on a big vacation. That will only set you back in your financial journey.

We recently took our children to Disneyland for three days. It was a wonderful experience, and what made it even better was that we had the money for all of it in advance. We were not worried about scrimping on food or not getting souvenirs because we had enough saved up.

We ended up coming in under budget for the trip. But if we were relying on debt to pay for it, the money stress would have taken away from the joy of the whole experience.

Large Purchase

This sinking fund category is kind of broad, because the individual item you will be saving for will change.

But this category is to save for bigger items you plan to buy. Whether that be a new car, a down payment on a house, new furniture, a house remodel–whatever you have your heart set on buying. This is the fund for those bigger ticket items.

House Maintenance

If you own a house, this is definitely one that you need.

HVAC systems have to be replaced, pest control has to be called, the roof leaks, the basement floods… you get the idea.

Houses are a wonderful investment but they come with maintenance costs. And those costs can seriously cause money problems if you don’t have a set plan for how to pay for it. 


Pets come with their own set of expenses–grooming, trips to the vet, insurance (if you pay for it), general supplies for taking care of them.

If you have, or are planning to get, a pet, knowing how you will pay for their expenses should be part of your planning, and part of your monthly budget. 


It seems the need for clothing never goes away. Whether it is my kids growing like weeds and needing the next size up, or we need an outfit for an event, or clothes get worn out, we always need some money set aside for clothing.

Some months go by and we don’t spend any of this sinking fund. Other months (back to school shopping, for example) and not having it would destroy our budget.

So having some money set aside for when the need arises (holes in kids socks, anyone?) makes these expenses so much easier to deal with.


We have three kids, and since before they were born we have been paying for things for them. And we will continue to do so for many years to come.

This is the perfect sinking fund to save in advance for expenses associated with the kids. Whether that be back to school (which could be its own sinking fund), sports fees, school pictures, or any of the myriad of other items.

Having a sinking fund category for kids expenses is a big budget help.


This sinking fund is a general medical fund in our budget. It encompasses doctor visit fees, eye doctor visits and glasses, dental appointments, prescription costs,etc. Pretty much anything to do with caring for your body.

We recently had to take one of our kids to his first eye doctor appointment. The fee ended up being $80.

While we could have paid for that out of our regular “Miscellaneous” budget category, having the medical sinking fund allowed us to save the “miscellaneous” money for other unexpected items later in the month.


There are lots of holidays throughout the year that beg for us to spend money. Having some money set aside for these special days keeps the stress away.

You might use this fund for celebrating Valentines Day, Easter festivities, fireworks on the July 4th, Halloween costumes and candy supply. The options are almost endless.

And having a fund set aside for those fun days will allow you to stress less and enjoy the days more.

Final Thoughts on Sinking Fund Categories

Once you have your sinking funds in place, the stress and panic for how to pay for things will decrease significantly.

Instead of feeling like a deer in the headlights, looking at a bill for something you know you should have/could have anticipated, you will have peace knowing you already have the money to pay for it.

Trust me. Sinking Funds are one of the biggest budget savers, and one of the easiest way to stay on budget every month.

So take a look at your personal needs and decide on some sinking funds categories to start working on. Take it slow if you need to–pick one or two to get started. And then slowly build up from there.

You got this. Leave me a comment with the sinking funds you use, or plan to start, and let me know if I can help. 

Sinking Fund Categories Your Budget Needs

6 printables for free budget template

FREE Budget Planner

Stop stressing about money and start making your finances behave! This free budget planner will help you get started!

Completing the field will add you to my email list (and I would love to have you as part of my community). But you are also able to unsubscribe at any time)

11 Sinking Fund Categories for your budget

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