Definition
A savings strategy where you set aside money regularly for a specific future expense, like replacing a major appliance or funding a vacation.
What to consider
- Explore the various programs available to support small businesses.
- Review the eligibility criteria and application process carefully.
- Use SBA resources to help grow and stabilize your business.
Real world scenarios
- Adam creates a sinking fund for his annual car insurance premium, depositing a small amount monthly to avoid a large lump-sum payment.
- Trisha plans a milestone birthday trip next year, funneling a set portion of each paycheck into a sinking fund just for travel.
- By labeling her sinking funds—“Car Repairs,” “Holiday Gifts,” “Pet Emergencies”—Ari ensures every expense category is prepared for in advance.
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