How to Track Sinking Funds
Whether you are going through your own debt free journey, or are already debt-free, sinking funds are a great way to save your budget. Sinking funds really save you the stress of wondering how to pay for something, especially a known, upcoming expense.
Having sinking funds will save you from feeling like you have to use your credit card to cover these expenses, or that you have to dip into your emergency fund for a non-emergency.
But it can be hard to keep track of what you are saving for and how much you have saved, especially if you have lots of savings goals. This is where having sinking Fund trackers comes into play.
What is a sinking fund?
Before we dive into the trackers, let’s start with the basics of what sinking funds are. A sinking fund is simply a small savings account, that you add to every month, for a designated purpose. You can have sinking funds for a variety of reasons and a variety of savings goals. What you save for with a sinking fund is really up to you.
When you know you have expenses coming up, and you know you won’t be able to pay for them with your regular paychecks when they are due, using sinking funds in your budget to prepare for that expense is the way to go.
When used properly, sinking funds become part of your personal, working budget. But in order to make sinking funds work for you, you need to have your budget set first.
In this blog post I share a lot of good ideas for sinking fund categories to help get you started with your own sinking fund goal.
How to manage sinking funds
Managing your sinking funds is going to be very similar to managing other parts of your finances.
In order to do this effectively, you will need to know what your sinking funds are, how much you want, or need, to save for each one, and how much time you have until the expense needs to be paid.
When you have this information, you can then look at your budget to figure out how much you can put towards each sinking fund, each month. This will then allow you to know if you will reach your goal on time.
You will also need to decide where you want to save this money. You can either take out cash each paycheck or month, and save for the sinking fund in specified cash envelopes. Or you can set up separate savings accounts at a bank for each fund.
All of this is infinitely easier when you make use of a planner like a sinking fund tracker.
What is a sinking fund tracker
A sinking fund tracker is an easy way to help you keep track of your sinking funds and how much you have saved it for each one.
Using sinking fund trackers will allow you to plan out your sinking fund goals so you know, step by step how much you need to save.
Sinking fund trackers will also let you see, visually, how you are progressing towards your overall savings goals.
I have definitely learned that having a visual representation of my goals keeps me motivated to keep working at it, when my motivation is slacking. The same is true with using sinking fund trackers when saving towards smaller goals.
If you aren’t sure where to find a good sinking fund tracker, you are in luck! Check out this Printable Sinking Fund Tracker designed with you in mind!
Get your own Sinking Fund Tracker Here.
Printable Sinking Fund Tracker
Sinking Fund Details
The first page of this printable sinking fund tracker is your overall plan for your sinking funds. On this page you write down the name, or goal, for your sinking fund. A great sinking fund to start with is Christmas (it comes around on the SAME DAY every year, so you might as well be prepared for it).
Then you figure out, and write down, the date you need to have money saved by. If we keep with the Christmas example, you might want to have all the money saved by Black Friday. Or perhaps no later than the first week of December. Whatever date you choose, put that down for the due date.
Next you get to decide how much you want to save. This is totally up to you. In our home, we like to have nice Christmases, but not super expensive. We usually try to save $800 for everything. So that is what I would put in the Yearly amount box. Whatever your goal is, write that in.
Up next you need to know how many months you have to save for that goal. If you are starting to save for Christmas, and it is currently May, then you will have roughly six or seven months, depending on when your due date is.
Lastly, you need to take the total amount you want to save, and divide it by the number of months you have to save it. This will give you the monthly amount you need to save for that sinking fund each month. In this example we have $800/6 months = $133 per month.
Sinking Fund Tracking
The next two pages in the printable sinking fund tracker is the actual tracking of your sinking funds
On these pages, you write your fund names at the top, and how much (if any) money you already have saved for that item.
Down the side you will see the months of the year. This allows you to track your progress, and expenses, for each month of the year.
For each sinking fund, you will want to track, each month, how much you start with, how much you add to, or spend from, each account, and then how much you have at the end of the month.
This page allows you to account for both adding to sinking funds, and using the money from the sinking funds. This way you always know how much you have to spend.
Visual Sinking Fund Tracker
The last page of the printable sinking fund tracker is a visual coloring chart. This is my favorite one because, as you fill in each square, you get to visualize how close you are to your goal.
For this sheet, write your goals along the top. You will need to take your total saving goal and divide it by 10, since there are 10 squares. In our Christmas example we would do $800/10=$80. So each square is “worth” $80.
Every time I save a total of $80 towards my Christmas sinking fund, I get to color in a square. The more I save, the more squares I color in. This allows you to really SEE how you are progressing on your goals, and helps to keep you motivated to keep saving and working towards your goal.
Final Thoughts on Sinking Fund Trackers
Using sinking funds is SO much easier when you can plan them out step by step, and keep track of your progress as you save.
This is why I love using sinking fund trackers, like the one found here. It helps me know how much I need to save each month, and keeps me motivated to keep going.
Since using sinking funds, our budgeting has gotten so much easier. And knowing that we have the money to pay for an expense, without relying on debt, is such a stress reliever!
Do you use sinking funds? How do you keep track of them? Let me know in the comments!