A Better Way to Manage Your Everyday Money - Book - Page 104
Sinking funds expense
A sinking fund is used to accumulate a goal amount of money over a specified period of time to
purchase something in the future. Sinking funds can be short- or long-term. Sinking funds are an
expense because you are setting current income aside for use in the future thus making the
money unavailable to use today.
Sinking funds can be used to purchase anything. Examples could include:
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New tires
Christmas gifts
Wedding expenses
Dishwasher
Plane tickets
Electric bicycle
Clothes for a special occasion
Vacation
Home remodel
Down payment on a car or house
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