Last Updated on July 7, 2023 by Rebecca Lake
Setting up sinking funds can help you to plan for specific savings goals. A printable sinking funds tracker makes it easy to see how much progress you’re making toward your savings goals each month.
Sinking funds are separate from an emergency fund, or money you put away for long-term goals like retirement. For example, you might use sinking funds to save money for:
- Summer camp expenses
- Car insurance renewals
- Home improvements
- Annual checkups for your pets
Using a printable a sinking funds worksheet is a simple way to keep track of your different savings goals.
Related post: 20+ FREE Printable Savings Trackers to Download Now
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Table of Contents
What Are Sinking Funds?
If you need an introduction to sinking funds for beginners, here’s a simple definition. Sinking funds allow you to save money for planned expenses and purchases.
In investing, sinking funds hold money that will later be used to offset bonds or debt. The accounting definition of sinking funds is money saved to repay a debt or replace a wasting asset at some future date.
In personal finance, a sinking fund is an amount of money you set aside regularly for an upcoming expense or savings goal.
Rather than having to dip into your emergency fund or risk overdrawing your checking account, you can pull the money you need from one or more sinking funds.
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Sinking Funds Examples
There are number of sinking funds categories you might include in your budget, depending on your savings goals.
Some of the most common sinking funds categories include:
- Home maintenance and home repairs
- Car repairs
- New tires
- Vacation fund and travel expenses
- Kids’ activities, including summer camp and extracurricular activities
- Medical expenses
- Pet care and pet expenses
Here’s an example of a sinking fund and how it works.
Say your daughter goes to summer camp for a month every July. The total cost comes to $1,200.
You could set up a sinking fund in January and deposit $200 per month until you reach your $1,200 goal. Once July rolls around, you’ll have the money you need to cover summer camp costs.
Sinking funds are easy to implement; they just require some basic math.
Here’s another sinking funds example. Say you need to save $893 for your car insurance, which you pay annually.
If you divide $893 by 12, you’ll get $74.41. This is the amount you need to save each month to reach your goal.
You could a bit further and calculate what you need to save based on the number of weeks you have until your goal deadline. That might be preferable if you get paid weekly or biweekly.
In short, there are lots of different things you can set up sinking funds for. And having a printable sinking funds tracker lets you see how much you’ve saved in each one at a glance.
Sinking Funds vs. Emergency Fund
You might be wondering what the difference is between a sinking fund vs. emergency fund. The answer lies in what they’re meant to be used for.
A sinking fund is designed to hold the money you’re planning to spend in the near term. An emergency fund is where you keep the money you set aside for unplanned and unexpected expenses.
Here are some emergency fund examples of when you might need to tap into your rainy day savings:
- Your car breaks down and the mechanic tells you it’ll take $1,500 to repair it.
- Your cat swallows a piece of string, prompting a visit to the emergency vet which costs you $250.
- One of your kids throws a ball, shattering your glass storm door and it costs $300 to replace it.
- The HVAC conks out the day before Thanksgiving and you have to pay $6,000 to replace it on the fly
I know all of these things count as emergency fund examples because every one of them has happened to me. And every time they did, I was able to tap into my emergency savings account to pay for them.
Nearly one in four Americans say they have no emergency savings, according to Bankrate. So if you haven’t started building an emergency fund yet, now is a great time to consider making that one of your financial goals.
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Where to Keep Sinking Funds
There are different options for where to keep sinking funds as you work toward different savings goals. You could save money at a traditional bank, credit union, or an online bank.
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High yield savings accounts offer competitive rates on balances and if you open them at online banks, they usually charge fewer fees as well. Compared to brick-and-mortar financial institutions, you might be able to get an APY that’s anywhere from 10 to 20 times higher.
Saving at an online bank means you don’t get branch banking access. But that might not matter much if you’re mostly concerned with getting the best interest rates while paying the fewest fees.
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Money market account
Money market accounts work like savings accounts since you can earn interest on balances. But they can also have features of a checking account, like a debit card or paper checks.
A money market account could be a good choice for where to keep sinking fund money if you value convenience. If you’re saving toward a bigger goal like a new car down payment, for example, it’s super easy to just write a check to the dealership once you’re ready to buy.
Free checking account
Free checking accounts may or may not earn interest or cashback rewards; it usually depends on the bank. But they’re a convenient way to save and spend sinking funds, without a monthly maintenance fee.
You can check with your current bank to see if any free checking accounts are available. If not, you can compare checking accounts at online banks to see which ones offer the best features and benefits.
Who Should Use a Printable Sinking Funds Tracker?
A sinking funds tracker is designed for people who use sinking funds to save for planned expenses.
If you don’t use sinking funds, then you don’t need one. But there are some benefits to using sinking funds that might convince you to give them a try.
When you set up sinking funds, you:
- Can break down individual savings goals
- Build saving toward those goals into your monthly budget
- Easily track your progress toward each goal
Some sinking fund expenses you might only save for once. But others you might save for over and over, like car insurance premiums or taxes if you run a business.
Again, things you could use a sinking fund to save for include:
- Wedding expenses
- Pet expenses
- Vacations or travel
- Business expenses
- Home improvements or repairs
- School-related expenses for younger kids
- College expenses for older kids
- Car repairs and maintenance
- New furniture
- Car insurance
- Homeowners’ insurance
- Property taxes
A printable sinking funds tracker can help you keep tabs on all of those goals.
Free Sinking Funds Tracker Printable
Need a simple printable for writing down sinking funds goals? I’ve got a free one you can grab now!
To get the tracker, you just need to click the image below. You’ll be taken to the signup page for my free Resource Library. Plug in your email and the tracker will be on its way to you, along with lots of other free money printables!
You can print out and use the tracker as many times as you need. I just ask that you don’t share it or reproduce it for commercial use.
FREE SINKING FUNDS TRACKER PRINTABLE PDF (CLICK TO DOWNLOAD!)
How to Use a Printable Sinking Funds Tracker
Once you’ve downloaded the sinking funds worksheet, it’s ready to use!
Here’s how to put it to work:
- Write the name of your sinking fund in the first box marked “Sinking Fund Name”
- Write your starting balance in the first box of the first column marked “Starting” (it’s okay if this is a “0”)
- Add the amount you saved for the month in the next column under “Monthly Savings”
- Subtract any amounts you spent from the fund in the next column under “Spent”
- List your updated balance in the “Remaining” column
- Record this amount in the “Starting” column on the next line
- Rinse and repeat
It might sound complicated to use a sinking funds tracker this way but it’s really not once you get the hang of it. In fact, it’s similar to using any other type of printable worksheet to track your expenses or monthly budget.
Related post: How to Save $10,000 a Year
Final Thoughts on Tracking Sinking Funds
Sinking funds can help you to be more efficient with budgeting and saving money. When you’re saving consistently for planned expenses each month, they’re less likely to take you by surprise. And a printable sinking funds tracker can make it easier to stay on top of all of your goals.
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