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Sinking Funds, Not Being Right, and Saving Buckets
Let’s talk sinking funds and savings buckets.
Grace Lemire
October 06, 2023
Hey,
We’re back with another issue of FOMO Friday.
P.s. We got some questions last week about what FOMO stands for. It stands for Fear of Missing Out — a feeling of anxiety people get when they know they’re missing out on something exciting or interesting.
The Friday issue of Sidepiece is called FOMO Friday because it’s packed with resources we won’t let you miss out on or have FOMO about.
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*Disclosure: Past performance is not indicative of future returns, Investing involves risk. See disclosures here
Action Step: Sinking Funds
This week’s 15-minute-or-less task is setting up a sinking fund. People tend to spend a ton of cash in Q4 between Black Friday and the winter holidays. Sinking funds can help make this spending more manageable.
A sinking fund is a savings fund you contribute a bit to each month for a future expense. The idea is that by contributing small bits over time, it makes the expense far more manageable. Instead of paying for the expense out of your budget, you’ll have a stash of cash ready to cover it.
I’ve used sinking funds to pay for:
Accountant: $3,000 per year, so I save $250 per month
Healthcare: I visit a specialist that isn’t covered by insurance, so I put around $100 per month aside to pay for that.
Self Care: Sometimes I like to splurge, so I set aside $50 per month so I can splurge on self care once or twice per year.
Moving: I’m planning a cross country move, so I contribute each month toward that until I hit my savings goal.
Sinking funds are also used for things like:
Holiday Gifts: Set aside a certain amount each month so you can purchase holiday gifts without feeling the hit so much.
Travel: Have cash ready to go for when the trip finally makes it out of the groupchat.
Insurance: Do you pay your car insurance upfront to save money? Put aside a bit of cash each month so you have the full amount saved when the payment date rolls around each year.
TLDR: What’s one sinking fund you could contribute to that would make your life easier? How much do you need to contribute each month to save up for that expense?
Quote
Last weekend, I was listening to a podcast episode of On Purpose by Jay Shetty featuring the famous American rapper and singer Russ. The podcast wasn’t money-related, but they dove into a conversation about making money with integrity and Jay asked Russ about a limiting belief he changed his mind on.
When it comes to both work and money, it’s easy to get trapped in what you know. You save a certain percentage because your dad always did. You do something at work a certain way because the employee who trained you did it that way.
But are these the most efficient ways? What if there’s a better option? Are you stuck in your own ways, or are you open to learning more and changing your mind?
Tool: Ally Bank’s Buckets
I love using Ally Bank’s high-yield savings account buckets to organize my sinking funds. It makes it SO easy to see how much is in each fund (numbers removed for privacy, but they’re usually there!)
Links of the Week
Make Money
🏦 Open a high-yield savings account to earn extra interest on your savings.
💼 October cal is already filling up. Snag one of our resume/portfolio teardowns ASAP.
📈 Patience wins when it comes to investing. Read this post to see why.
Save Money
🤑 800k+ borrowers on income-driven plans got their student loan debt forgiven.
🎓 If you’re in school, apply to scholarships on Bold.org to save money on tuition costs.
🗓️ Finish off the year strong. Join this creator’s Q4 Finish Line financial challenge.
➗ Use a debt calculator to find the best debt payoff method and save on interest.
Featured Opportunities
6 new opportunities this week! For more jobs like these, check out a full list here.
Leaves are starting to fall, which means people need help raking and cleaning up their lawn. If you’ve got a rake, list a service on Task Rabbit. Average pay for this type of work is $77 to $160 on TR. 🤯
Bookkeeping is the process of keeping track of a business’s financial transactions. You can take a free course on Coursera to become certified, then start offering your services for up to $100 per hour.
Get paid to review products like clothing, household products, and games. The average payout per review is $25.
Mini Pops Kids, Canada’s #1 music brand for kids, is looking for a content creator to create 22-24 videos per month for social media. Budget is $25 to $50 per hour (we recommend negotiating a flat rate per video, not hourly!)
A financial tech startup in stealth mode is looking for a product manager for 20 hours per week. Budget is $100 to $150 per hour 👀
Growth Marketing Pro is looking for freelance writers. They didn’t specify their rates, but you can DM the poster directly to inquire.
Want to see a specific type of work? Just let us know.
Ask the Sidepiece Team
A: It isn’t too late. Technically, the best time to negotiate your salary is after you’ve received the offer but before you accept the job. That said, it’s never too late to ask for a raise.
First, make sure you’ve been at the company for at least six months. Asking before that is premature and may not go over well.
For a full walkthrough on how to ask for a raise, check out Ramit Sethi’s guide.
See ya on Tuesday,
Grace
