Due to the COVID-19 pandemic, more and more parents transitioned to homeschooling their children compared to previous years. Though homeschooling seems easy to an outsider, there may be legal requirements, hidden costs, and other unknown factors. Therefore, conducting outside research or getting information and helpful tips from other homeschooling families in your community is best.

Homeschooling Expenses: What to Expect

The decision to remove your children from a public school setting can be difficult for many parents. Most private schools require costly tuition fees, making homeschooling more enticing to families. However, you might not be aware of all the expenses and costs of homeschooling. Homeschooling expenses consist of:

Curriculum

There are some free options for homeschooling; however, most options are not free. You might also need to purchase student workbooks, teaching materials, and other learning materials required to complete the classwork. Typically, curriculum requirements vary state by state, so it’s essential to research your state’s requirements before committing to one source.

School Supplies

Homeschooling requires school supplies, like pens, pencils, notebooks, and other supplies pertinent to learning, reading, writing, and more.

Extracurricular Activities

Homeschooling necessarily does not mean you’re learning from home at all times. For example, you might need to plan for field trip expenses, sports, arts and crafts, and other activities outside the house.

Additional Fees

In addition, you might face other fees throughout the school year, such as state-mandated testing fees or tutoring, for example.

Homeschool Planning and Budgeting

You might notice how quickly homeschooling expenses and fees add up, especially with multiple children at home. Before you remove your children from school, ensure that you’re well-researched regarding the options and curriculums available. Then, once you’ve estimated the price range of your expenses, make sure to read through your state’s rules and regulations so you’ll find a curriculum that fits your child’s needs.

Homeschool Budgeting Tips

Hidden Costs for Homeschooling

Most fees associated with homeschooling are upfront and easy to decipher. However, hidden fees still exist. These fees can include anything from supplies for the classroom to an increase in your grocery bill. While you might expect to purchase items like pencils, markers, binders, and notebooks, you’ll also need items for other activities. Examples include science lab experiments, art class, or physical education to maintain a healthy homeschooling lifestyle. In addition, you can expect an increase in your grocery bill since your child will consume more snacks and meals at home. Even though there are plenty of free homeschooling curriculums, people tend not to discuss that other options can cost families over $1,000 or more per school year. However, if you are a family with multiple school-aged children, consider reusing curriculums as your children grow.

Takeaway

According to Investopedia, the average price per year for homeschooling one child can be upwards of $1,800. If you decide on homeschooling your children, ensure you spend an ample amount of time researching and understanding the laws of your state. Also, keep in mind the average of a curriculum and ensure you’re budgeting for any unexpected expenses for the school year.

The Cost of Homeschooling

View Resource The Cost of Homeschooling
Skimming is a form of identity theft that extracts credit card information when you use the card in a modified public card reader. Skimmers are typically installed on ATMs or any point-of-sale technology and then read your credit card data to defraud you.

How Skimming Works

Skimming can happen when a fraudster modifies a device on an ATM, gas pump, or point of sale terminal to read your card data when you swipe your credit card. Fraudsters then use the data to create fake credit cards to steal from the victim’s accounts. With the advent of more sophisticated technology, skimmers can be as thin as a credit card, making it impossible for authorities to identify them. Criminals will typically install skimming devices on ATMs with cameras. The skimming device can also be in the form of keypad overlays, which can go on top of the factory-installed keypad. The keypad overlay is capable of capturing your PIN. Gas stations usually have their card readers outside near the gas pumps away from the checkout counters, making them an easy target to install skimmers.

Types of Skimming

Skimming has become more sophisticated and can happen in the following ways:

ATMs and Point-of-Sale (POS) Terminals

ATMs are the prime location that fraudsters use for skimming devices because the devices are easy to hide so victims won’t notice. Some scammers place hidden pinhole cameras to record the person’s keystrokes as they put in their PIN. Others use keypad overlays attached to the original keypads to record the keystrokes when users enter their PIN. Skimming devices will store the data and transfer it wirelessly for later use.

Gas Stations Terminals

In gas stations, scammers install skimmers in the internal wiring of the POS machines, making them invisible to card users. The skimmers then record the card details and transmit them electronically to be used to defraud the victims.

Avoid Getting Skimmed

Skimmers can be attached to any ATM and POS terminals to read and later misuse your card details to defraud you. Taking certain precautions when using your credit cards in public places can be the only way you can prevent such crimes.

Tips for ATM and POS Use

Tips for Gas Station Use

Some other precautions you can take to protect your card information from skimmers are:

Takeaway

To protect yourself from skimmers, be alert and observant when using a card reader in public areas and report anything suspicious to the authorities.

What Is Skimming?

View Resource What Is Skimming?
Credit cards are everywhere; not only do most people have one, but many have several. Unfortunately, some individuals are looking to steal your credit card information and use it for their benefit.

What Is a Credit Card Dump?

A credit card dump is when someone makes an illegal and unauthorized digital copy of a credit card. Credit card dumps have existed for many years. However, they’re becoming increasingly popular and more widely used due to the increase in identity theft, credit card theft, credit card forgeries, and other cybercrimes. Credit card dumps happen when thieves physically copy your credit card information or hack into company payment databases that contain that information. Skimming is the most common method used to accomplish this. Skimming uses an illegal card reader to save a customer’s credit card information. Someone could place it on a real ATM or a card reader, like the ones you see at a gas station. Credit card dump attacks have been happening on a larger scale, sometimes affecting millions. Criminals will target a company’s computer database containing credit card data and copy all the information. Once they finish the process, the thieves will often sell that information to buyers on the black market or use it for personal gain.

Protecting Yourself From Credit Card Dumps

Nobody wants to be a victim of a credit card dump, but how can you protect yourself? Credit cards typically offer security features like a PIN or security chips to make theft more difficult. Here are some more easy ways to lower your risk of getting targeted for a credit card dump:

What If I’m Compromised?

If you believe someone has stolen your credit card information, immediately contact your credit card company. You’ll be able to cancel your card and review any unauthorized charges. Most credit card companies will not charge you for unauthorized purchases as they have a “zero liability” policy. Once your card is canceled and the statement reviewed, the next step is to go to IdentityTheft.gov. This website, run by the Federal Trade Commission (FTC), will help you report and recover from your credit card fraud.

Takeaway

Unfortunately, credit card dumps are becoming a common occurrence. However, with knowledge tucked into your back pocket, there are ways to help secure your purchases so you won’t become a victim.

How Credit Card Dumps Work

View Resource How Credit Card Dumps Work
Receiving matching contributions to your retirement plan from an employer is one of an employee’s best benefits for making the most out of their 401(k) plan. In addition, maximizing matched contributions will help grow your retirement plan faster.

What is a Matching Contribution?

Essentially, a matching contribution is the amount given by an employer whenever you contribute to your retirement plan. For example, suppose you use a 401(k) plan as a retirement savings vehicle. Your employer would make a matching contribution for every contribution you make to the plan in such a case. Every employee contributing a specific percentage of their income to their chosen retirement plan will receive a match from the employer for the same amount. An employer’s matching contribution is essentially free money for the employee since they do not earn it themselves.

How Matching Contributions Work

A typical example of a matching contribution occurs through a 401(k) retirement plan. Under this plan, an employee contributes a certain percentage of their income to a designated fund to get future retirement benefits and tax advantages on the contributed amount. For example, an employer’s matching contribution can be 50% of an employee’s contribution, limiting to 6% of their salary. Suppose your annual salary is $40,000, and you contribute $2,000 towards your 401(k) plan every year. Then, your employer’s matching contribution would be 50% of your contribution, i.e., $1,000 (50% of $2,000), subject to a cap of 6% of your annual pay, i.e., $2,400 (6% of $40,000). Matching contributions are not legally required, and not all employers provide this benefit. Still, it is usually the norm for employers to provide some matching contribution to boost an employee’s retirement benefits.

What Plans Are Available?

You can find matching contributions usually in 401(k) plans, although other retirement benefit programs, like simple IRAs, make use of them. 401(k) plans are primarily two types:
  1. Traditional 401(k) Plan. Traditional 401(k) plans require contributing a certain percentage of your income to a designated fund. Your employer then makes a matching contribution towards the account to fulfill the plan’s purpose. Matching contributions can be:
    • A partial match. The maximum contribution by employers caps at a specified percentage of an employee’s annual income. Often, a matching contribution made is 50% of employees’ contribution, subject to a limit of 6% of their yearly pay. However, the exact employee matching terms can vary by plan.
    • A dollar-for-dollar match. In this case, employers’ contribution is 100% of an employee’s contribution, limited to a percentage of their annual pay. For example, your employer can contribute 100% of your contribution with a cap of 4% of your yearly pay.
    • A non-match. These contributions, though rare, are made by employers on a profit-sharing basis, based on achieving particular business objectives. They are also limited to a specified percentage of an employee’s annual pay.
  2. Roth 401(k) Plan. In a Roth 401(k) plan, you contribute a specific percentage of your income after deducting taxes.
    In this plan, tax deductions occur before contributing to the fund. To provide matching contributions for a Roth 401(k) plan, employers need to create a separate traditional 401(k) account.
    According to this plan, employees make contributions post taxes, while employer contributions are charged taxes at the time of withdrawal.

Maximizing Your Matches

When you choose to contribute to a 401(k) plan, a matching contribution by your employer can allow you to multiply your savings to meet your retirement goals. You can take the following steps to make the most of the contributing matches:
  1. Start contributing early. Most companies will give you the full benefit of the plan when you start contributing early. However, some companies allow matching contributions by employers after a specific tenure of service.
  2. Get the full match from your employer’s contribution. Matching contributions from employers are primarily extra money for contributing to a 401(k) plan. Make contributions to ensure that you get the full match from your employer’s contribution.
  3. Set your contribution on automatic mode. Set your contribution on automatic mode to pay yourself first before incurring other expenses. This simple step will allow you to save consistently for your retirement in the future.
  4. Avoid dipping into your retirement savings. Saving for retirement is a long-term habit. You might dip into your fund to spend on some other immediate expenses, but that can eat away your future security in the long run.

Takeaway

Your employer’s matching contribution to your 401(k) plan provides you with free money that can help secure your retirement in the long run. So make sure to contribute to get the maximum advantage out of it.

Understanding Matching Contributions

View Resource Understanding Matching Contributions
Pension plans can be a significant source of retirement income for many retirees. Employers often use pension plan benefits to attract and retain employees. Typically, they set aside money for each employee in a fund, which the money grows over the tenure of the employee’s time there. When employees reach retirement age or retire, they’ll receive their pension.

What Is a Pension Plan?

A pension plan is a retirement benefit plan where an employer pays their employee a set amount once they retire or after the termination of their service. The amount will also vary depending on the length of their service. At retirement, the employee can choose to receive a lump sum or get regular payments for life in the form of an annuity. To get a pension, an employee needs to put in the minimum time of service, which depends on each employer. They’ll forfeit their right to the pension fund if you leave before that. Vesting of pension money can be in two forms:

Public vs. Private Pensions

Although employers can offer a pension, it is typically more common in the public sector. The public sector is usually from government bodies, whether state, local, or federal. Private companies that offer pensions are less common. However, when provided by a private employer, the pension does have legal protections. Private companies are legally required to ensure that they fund their pensions adequately. In addition, the Pension Benefit Guarantee Corporation will insure those pension funds. Public pension funds are not subject to such legal requirements, which can lead to severe underfunding, drastically reducing such benefits.

Calculating a Pension Fund

A pension can be calculated by:

Pension Plan vs. 401(k)

Nowadays, a 401(k) plan has largely replaced the traditional pension plan, especially in the private sector. A 401(k) is a defined contribution retirement plan where the employee contributes a certain percentage of their salary to the fund that the employer creates. Typically, the employer can either match their contributions partially or fully. Employees can choose the type of investment plan that they want to fund. Then, they’ll be able to make withdrawals once they hit retirement. In contrast, a traditional pension fund will have funds set aside by the employer once the employee hits retirement. In addition, employees have the option to not contribute to the fund and will receive funds based on the number of years of service. Although the employer creates the pension fund for the benefit of the employees, the amount is vested in the employees after fulfilling certain conditions. The main differences between 401(k) and pension funds are:

Pension Funds

401(k) Plan

Risks of a Pension Plan

A pension plan, being a retirement benefit, can have the following risks:

Takeaway

A pension fund can be a great retirement benefit if employees plan to stay with their company for the long haul. If they’re looking for a fixed income after retirement, a well-invested pension plan from their employer will help ensure a stable financial future.

Understanding Pension Plans

View Resource Understanding Pension Plans
If you’ve been on social media and scrolled through your various feeds, you have most likely seen social commerce at work. Social commerce is when brands advertise and promote their products through social media platforms. For example, if you follow any celebrities or influencers, you’ve probably seen them promote a brand’s product, typically one they use. Social commerce is the newest branch of traditional eCommerce. Rather than relying exclusively on advertising, search engines, or their website, social commerce brings the brand’s product directly to the social media user’s feed. Below, we’ll dive more into social commerce and what you need to know about it.

Understanding Social Commerce

Social commerce is buying and selling products or services on social media or networking platforms. Typically, it’s common on platforms like Facebook, TikTok, Instagram, LinkedIn, and Twitter. Here are some statistics provided by the consulting firm Accenture to help you understand just how quickly social commerce is growing:

Social Commerce vs. eCommerce

It’s easy to mix up social commerce and eCommerce; however, social commerce is simply a part of eCommerce. eCommerce encompasses all online shopping. Before social commerce, companies would promote and sell their products online. Now, companies are bringing their products to social media spaces, often encouraging customers to interact with their platforms. In addition, companies can hire influencers and celebrities to help promote their product to that person’s audience. As consumers shift their shopping habits from online to social media, we’ll eventually see a more significant portion of eCommerce sales being social commerce. There are multiple reasons to help explain this rise:

Audience and Reach

Social commerce allows companies to cater to specific audiences and expand their reach. Traditionally, online advertising utilizes the user’s data to show products you might have seen on your phone or on different websites. Likewise, television ads typically cater to the shows or channels’ demographics. However, with social commerce, companies can target specific audiences. For example, suppose a user follows a beauty influencer. In that case, beauty companies can pay influencers to promote their product on their platform and companies often allow influencers to have a promo code to generate sales further.

Genuine Promotion

Social commerce blurs the line between buyers and sellers. It has enabled companies to connect with their customer directly, while traditional advertising lacks this connection. For example, brands can easily hire influencers, celebrities, or anyone with a large following to promote their product. Typically, this results in posts or videos that seem genuine.

Change in Ad Space

Social commerce has changed the game for ad space. Usually, a user will hit a wall of ads on YouTube or any streaming platform that they’ll try to skip or ignore as they look at their phone. Essentially, people don’t enjoy watching ads. Social commerce has made it so that ads aren’t as intrusive because they’re something the user doesn’t mind seeing. For example, on TikTok, you can find comedy accounts that act out funny skits. Many of these accounts partner with brands and incorporate branded products into their funny videos. So, instead of scrolling past the video, a user might watch it and possibly get a laugh or two out of it.

Ads Are Everywhere

With the rise of social commerce, ads are inescapable while browsing any social media platform. Users can scroll for a few moments and be hit by an ad or two and users may not even be aware that what they saw was an ad. Typically, this increases exposure while changing and commodifying the social media space.

Where to Shop

You can find a place to shop on a few social media platforms, like Facebook and Instagram. You’ll most likely find links and promotions on your favorite’s social media feed that make shopping easy.

Takeaway

Social media has changed our lives in countless ways. As companies note the limitless benefits of promoting and selling on social media platforms, the rise in social commerce will come as no surprise.

What Is Social Commerce?

View Resource What Is Social Commerce?
Having roadside assistance insurance can give you peace of mind if you worry about how a flat tire or a dead battery can leave you stranded on the road. Roadside assistance coverage can help you resolve any breakdown issues in no time while reimbursing you some of the costs.

What Is Roadside Assistance Insurance?

Roadside assistance insurance can help you get assistance and payment when your vehicle breaks down or becomes disabled. Typically, you’ll pay an annual fee for this service. The primary benefits of getting roadside assistance coverage are: A roadside assistance policy, like auto insurance, requires the policyholder to pay a premium for their desired coverage. However, if your car breaks down, the policy will pay for the emergency services up to the coverage limit.

Roadside Assistance Coverage

Your roadside assistance policy will typically cover: In addition to the regular services, the roadside assistance policy can also cover additional services depending on the terms of your policy.

Benefits of Roadside Assistance Insurance

A roadside assistance policy can help you safely get back home if your car breaks down on the road. It can also cover the payment of emergency services for towing and repairing stranded vehicles. While everyone can benefit from having roadside insurance coverage, it is most advantageous to have the policy in the following situations:

Obtaining Roadside Assistance Insurance

You can get roadside assistance insurance from several places like:
  • Auto insurance companies. The best way to get roadside assistance coverage is through your auto insurance company. Typically, you can add it to your auto insurance premium. Some auto insurance policies also have roadside assistance as a part of their package.
  • Auto clubs. Auto membership organizations like AAA and Good Sam specialize in roadside assistance. They have many members and often provide DMV and travel-related services.
  • Credit card companies. Premium credit card companies like Visa provide roadside assistance services to their members subject to a pre-negotiated fee.
  • Car manufacturers. If you buy a new car or a certified pre-owned vehicle, it may come with complimentary roadside assistance service during the warranty period.

    • Rules and Exclusions:

    Although getting roadside assistance coverage may benefit you greatly, there are specific rules and exclusions you should consider:

    Takeaway

    Driving your car on the road can lead to minor hazards that can leave you stranded. Having roadside assistance insurance can help you get assistance to get back on the road again.

    Understanding Roadside Assistance Insurance

    View Resource Understanding Roadside Assistance Insurance
    If you plan on selling your car, there are various ways you should consider so that you can get the best price for your vehicle. The main methods focus on trading in your car, selling it yourself, or getting an instant cash offer. Here, we’ll go over essential details about selling your vehicle, including where to start, prepare, and close the sale.

    Different Ways to Sell Your Car

    When you’re looking to sell your car, there are three main ways to go about it. You can trade the vehicle at a dealership, sell it yourself, or get an instant cash offer from companies like Kelley Blue Book.

    Trading In Your Car

    The first method you can consider is trading in your car. You can sell your used vehicle to a dealership to get a lower price on a new car. Essentially, the dealership will subtract the assigned value from the cost of your new vehicle. The best part about trading in your car is not having to worry about selling it. Trading in your vehicle can be a more convenient process with no additional costs. It can also potentially reduce the sales tax on your new vehicle. But, ultimately, you might not get the best price for your car.

    Sell It Yourself

    The best part of selling your vehicle is the possibility of getting the best price possible and saving money since you won’t suffer from a dealer’s overhead costs. However, selling the vehicle yourself does require more work on your part. You’ll be responsible for advertising, negotiating prices, and meeting with potential buyers. So, while it is usually more profitable, it does require more work.

    Instant Cash Offers

    Companies like Kelley Blue Book or CarMax can grant car sellers instant cash offers. So, rather than trading your car to a dealership, you’ll sell it to the company and immediately receive cash. However, like a dealership, you won’t receive the best price, especially since it’s a cash offer. But, again, you won’t have to go through the hassle of selling the car yourself.

    Preparing to Sell

    1. Organizing documents. The first step when selling your vehicle is gathering all the essential documents. Typically, this includes your car title, service records, original sales paperwork, and a vehicle history report in case your car was in any accidents.
    2. Make necessary repairs. If you want the best price on your car, make sure you complete any necessary repairs, like new brakes or changing out worn tires. Even the most minor things, like a cracked windshield, can reduce your sales price. So, ensure you’re maintaining and repairing your car when needed.
    3. Cleaning your vehicle. No one wants to purchase a dirty car. It’s best to either thoroughly clean your car yourself or take it in for a detail and wash.

    4. Pricing your vehicle. Before you put your car on the market, you’ll need to determine its value. Unfortunately, people tend to overestimate the worth of their vehicle, so it’s best to try the following ways to determine the price:

      • Hire a mechanic to assess the value of your vehicle. They’ll evaluate all features, which includes anything from the engine to the tail lights.
      • Check out online valuation tools, like Kelley Blue Book, that will provide you with ways to receive an estimate on your vehicle.
      • Check out the local listings. You might already have similar vehicles on the market, so this method will help determine your listing price.

    Closing the Sale

    You should take several steps to ensure a safe and legitimate transaction. Try meeting the individual in a public place while using legitimate forms of payment. Many police departments have safe, designated spots where sellers can meet their buyers. Typically, you’ll need to provide documentation that shows your sale to the buyer. The documentation will usually involve a title transfer, bill of sale, and release of liability, along with removing and turning your plates in.

    Takeaway

    If you’re trying to sell your car, look at your situation and assess every option. For example, if you’re moving to a city that doesn’t require a vehicle, an instant cash offer or selling it yourself might be best for you. On the other hand, if you’re looking to upgrade your car to a newer model, then trading it in might be best. However, whichever way you go, ensure you’re diligent and that the option works for you. Remember not to be too disappointed if you can’t reach your best sales price.

    Selling Your Car

    View Resource Selling Your Car
    Inflation has made its impact in the past couple of months. If you’ve noticed an increased cost of goods and services, that’s due to inflation. While inflation is natural and normal, it has increased drastically in the past months. Inflation increases the cost of goods and services within a given period. For example, between 1922 and 2020, the U.S. dollar had an average inflation rate of 2.83% per year. While that doesn’t seem like much, it has created a cumulative price increase of roughly 1,440%. That means the dollar is now worth 15 times less than in 1922. It’s best to remember that inflation is natural despite the staggering statistics. Despite the decrease in the power of the dollar, there has been an increase in wages. Americans are currently dealing with much higher inflation rates. The main issue is that while the price of goods and services has increased, there has not been an equal wage increase to counter it.

    Understanding Inflation

    The Bureau of Labor Statistics (BLS) is a government agency that collects data to create the Consumer Price Index (CPI). CPI follows the prices of consumer goods and services, like gas, transportation, food and beverages, apparel, and more. Tracking pricing allows the CPI to show any increases in prices over time. For example, according to BLS, from January 2021 to January 2022, the Consumer Price Index rose 7.5 percent. Food prices rose by 7 percent, while energy prices rose by 27 percent. Therefore, a gallon of milk or a car in 2021 would be 7% more expensive than the previous year. Many factors contribute to inflation— one being supply and demand. When the supply for goods and services is low, or demand for them is high, prices for those items are likely to rise. The U.S. has been dealing with supply chain issues throughout the pandemic, which has put a crimp on available supply, increasing prices for related goods and services. In addition to the supply chain, energy prices (especially oil), regionalization, and the Federal Reserve interest rates affect inflation.

    What Does Inflation Impact?

    Inflation impacts almost everything. No goods or services are left untouched from increasing prices when the dollar inflates. Inflation affects the following costs:

    Dealing With Inflation

    Inflation will undoubtedly strain your finances— your budget will likely increase while your income remains stagnant. Here are some steps you can take to fight inflation:

    Takeaway

    Inflation has affected many Americans who haven’t seen an increase in their income. So now, Americans struggle to save money, pay off debts, get loans, save for retirement, or meet their financial goals. Thankfully, high inflation does not last forever. There are some simple steps that anyone can do to save extra money during this time.

    How Inflation Impacts Your Finances

    View Resource How Inflation Impacts Your Finances
    Hearing the name “sinking fund” may give you the wrong idea, mainly if you’ve never heard of one before. A sinking fund differs from a savings account because money is typically for a specific purchase, usually big-ticket items like a car or downpayment on a home. Increasing your savings account or an emergency fund is always essential, but these typically have a general-purpose. Instead, it may be best to create a sinking fund if you want to save for a specific expense. This article will discuss sinking funds and how to start one.

    What’s a Sinking Fund?

    A sinking fund is a savings account designed to pay for a specific, upcoming expense. They are secure, safe, and liquid, so you can save and access your money effortlessly and risk-free. You can use a sinking fund for almost anything, but you must plan a budget to reach your goal. Knowing the dollars and timeline for saving is best. Since you can use a sinking fund for just about anything, here are some typical expenses people choose:

    How Does a Sinking Fund Work?

    We all wish we could write a check when a considerable expense arrives and not overthink its impact on our finances. But unfortunately, most of us have to be strategic with our money, especially regarding items with higher price tags. Try using a sinking fund if you want to designate money for an upcoming expense. Each month you can save a portion of your income for the account. Then, if you plan accordingly, you’ll have the funds you need when the expense arrives. Example: You are looking to go on vacation next summer and determined your total cost will amount to $6,000. The expenses include flights, hotel, dining, traveling, and activities; the target date is ten months away. You’ll need to save $600 monthly for ten months to hit your goal.

    Sinking Fund Benefits

    Sinking funds offer a multitude of benefits, including:

    Starting a Sinking Fund

    When starting a sinking fund, reviewing your finances and past purchases is best. Check for any significant expenses and determine any large expenditures for the future. Then, list your savings goals while prioritizing your most important expenses first. Next, make a timeline. List out the due dates for each expense and determine how much you need to save every month to cover each one. For example, if you want to save $2,000 for a vacation in five months, you’ll need to save $400 per month to reach your goal. Once you’ve hit your goal, use the money to cover the expense. Then, if you think you’ve managed your finances better, try using a sinking fund again for any other upcoming payment.

    Takeaway

    A sinking fund is a great way to manage your money for upcoming expenditures. They allow you to identify an expense, budget your money, and save to reach your goal. Ultimately, a sinking fund will keep your finances organized while leaving your other savings and investment accounts untouched. Consider using a sinking fund for your next expense to ease the overall process and make it more intentional.

    Using a Sinking Fund to Save

    View Resource Using a Sinking Fund to Save