Sinking funds: budgeting's best-kept secret
Stop being ambushed by predictable expenses. The simplest fix in all of personal finance.
By Ren Okafor · 2026-02-03
Most "emergencies" aren't emergencies. They're predictable costs we refuse to predict.
Car insurance, the holidays, an annual subscription — none of these are surprises, yet they hit the budget like one. A sinking fund fixes this by saving a little each month toward a known future expense.
How to set one up
- List the predictable hits — anything that arrives yearly or seasonally.
- Divide by twelve — that's the monthly set-aside.
- Keep them separate — out of the main account, out of temptation.
Do this once and the year stops ambushing you. The expense still comes — it just stops being a crisis.