HUNTSVILLE, Ala. (TENNESSEE VALLEY LIVING) - Summer is the season when the fear of missing out sets in. People are going on vacations, to concerts, to baseball games, and dining out more. It can be a fun-filled, but expensive time of year.
You might be finding yourself in a situation where suddenly you’re spiraling and wondering how to afford the life you want to be living. The answer? A sinking fund.
“A sinking fund is a way of describing short-term savings for specific things. Every week, month, and pay period, you sink a little bit of funds into it so that when the big event you’re saving for rolls around, you’re ready,” said Lauren Hooper.
Lauren says all you need to do is decide what you are saving for, prorate it out for the number of months until you need it, and start putting that money away. So when next summer rolls around, you will be financially prepared to enjoy the warm weather fun without stress.
“I recommend keeping your sinking fund in a separate account. You want it to stay liquid so not in a CD or investment account, but a High Yield Savings Account (HYSA) is a great place,” said Lauren.
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A favorite of Lauren’s is Wealthfront which currently has 5.0% APY and the ability to track different amounts of money all within one account.
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