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Finance

Sinking Fund

Money you save over time for a big future expense so you don't have to borrow or use a credit card.

Companies also use sinking funds to pay off bonds or replace equipment. It's a disciplined way to plan for known future costs.

It's like putting aside $20 every week so you can pay cash for Christmas presents instead of stressing in December.

Real world: A family saves $300 a month in a sinking fund for their next car or a big vacation instead of financing it.

💡 Sinking funds turn big scary expenses into small, easy monthly savings — way smarter than debt.