Accomplishing anything is easier with specific goals. Whether you’re training to run a marathon, learning a new programming language or trying to advance in your career, you’ll make faster progress if you have a clear vision of where all that hard work is taking you.
The same is true for saving. While you certainly could stash all your money in one big pot and distribute it as you see fit, that’s an easy way to leave certain goals unfulfilled. This approach also makes it easier to spend your savings on discretionary purchases, because you don’t have a clear picture of what you’re sacrificing.
Enter the sinking fund, the best way to organize your savings into specific and discernible groups, allowing you to focus on each goal individually. Here’s why you need one – and how to start it.
What is a Sinking Fund?
A sinking fund is a special savings fund for a long or…