Financial wellness can negatively or positively affect your mental health.
A Bankrate 2024 Money and Mental Health Survey found that 56% of people surveyed stated that not having enough saved in their emergency fund negatively impacted their mental health.
If an unexpected expense comes up and you do not have the funds to cover it, it’s understandable to be stressed out and worried.
Not being prepared for unexpected expenses with an emergency fund is one thing, but what about not being prepared for expenses you know of?
That’s where sinking funds come in.
What are sinking funds?
Sinking funds are separate savings funds allocated for specific events or goals in the near or far future. The purpose of a sinking fund is to save money over time in smaller manageable amounts so that you do not need to take a large sum of money from your pay at one time.
Sinking funds can work in two ways:
- A specific amount needs to be saved up by a designated date
- No specific amount or designated end date to use the funds
You can start a sinking fund for any future goal, event, or expense you have on your radar. Some common sinking funds are:
- Christmas
- Birthday gifts
- Car Maintenance
- Vacation
- Concert Tickets
- Home Projects
- Wedding
How to Build Your Sinking Funds
After deciding what sinking funds to start, you need to figure out the best way to save these funds. Check with your financial institution to see if they have tools to help you on this journey.
With your Triangle Credit Union checking or savings account, you can access Goal Builder within Online and Mobile Banking.
TCU Goal Builder
Goal Builder is a tool that helps you save towards your goals, automatically. With Goal Builder, you can choose from 10 premade goals or create your own to best fit your financial goal.
Once you choose your category, you can set the total amount for your goal, the desired start and end date, and the frequency of when you want to contribute towards this goal.
Based on all the information you provided in the above steps, Goal Builder determines how much you will need to contribute each time to achieve your goals by the desired end date.
If budgeting and improving your financial future is part of your plan this year, sinking funds may be right for you. With tools and resources like Goal Builder, all the work is done for you after the initial set up.
