The Sinking Fund

A lot of people feel like sinking when something tragic happens to a home, car, or other pieces of property.  As Dave Ramsey would say, "Who knew the car would need repair one day?  Who knew the the water heater would stop working?  How could anyone ever imagine that their Heating and Air would one day need repair?"

We act shocked when these things happen as if we did not expect them.  Kind of like finding out that Christmas happens on the same date every year.  Some one should have told us these things happen, right?

There is one thing we all fail to do when we buy a house, a car, a television that is too big.  We fail to set up a replacement fund or, as some call it, a sinking fund.  We take time to figure how much to set aside to buy a car.  We figure how much we need to insure it.  We figure the gas and the taxes.  We just seem to forget that one day repairs will be needed, and we do not save for that event.

Imagine how you would feel if you had the money to fix your car, your roof, and get that new television all with cash!  Everyone needs a sinking fund.  You need a way to save money for items you know will need an overhaul eventually.  You will have to determine the figure you will need.

I could suggest setting aside a tenth of your monthly income into a savings account just for that very need.  You may build it up to equal a tenth of the value of your home, automobiles, and other fixable property.  This way you have a target for which to aim.

 As a minister I suggest every church and business should have a sinking fund.  Air conditioners break down.  Roofs eventually need repair.  Water facets will leak.  Water fountains will stop working.  Toilets will stop working.  Start a sinking fund as soon as you can and don't get caught wondering how in the world can you afford it.

That's my advice for you.  To find out more about setting up your budgets:  DaveRamsey.com or Crown.org