Sinking more into the sinking funds

We’ve set aside money for our twice-a-year real estate tax bills for some time now. We categorize this money as a “sinking fund” in the budget. Each year, those real estate bills total about $2,400.

However, after a closer examination of our year-around finances, it was apparent that we needed to factor in more sinking funds. So, one night, we went sinking fund crazy, and started making them for everything.

Five minutes into a serious debate about the exact dollar amount to set aside for propane, we bust up laughing, realizing that setting aside anything at all would be better than our usual budget of zero for propane.

We’ll finish out March on our old budget, and start our new plan, complete with all sinking funds, in April.

Here’s what our monthly sinking funds will look like going forth:

Real estate taxes (a.k.a. property taxes) and auto insurance: $320 total (Our real estate taxes arrive twice a year. We also pay our auto insurance in two installments to receive a discount.)

Propane: $35 (We use propane for our kitchen stove and as a backup heat source. We don’t use much in a year.)

Christmas money/car repair money/home repair money: $50 each, for a total of $150 a month

Miscellaneous gifts: $40 (We have a birthday or anniversary on the calendar for a close family member or friend just about every month. Some of that money may go toward a gift, or to host a birthday meal at home or at a restaurant.)

Fun money: $50 (April will be the first time we’ve had a fun money category in five months. In the interest of full transparency, much of this money will probably be spent on ice cream.)

So, the grand total for sinking funds cash is: $595

While it would feel amazing to slam that money at a credit card (on top of what we’re already funneling toward debt, of course), it just doesn’t make sense for us to work so hard only to get tripped up over these expenses. We’d previously hoped to build up to about $1,000 to put toward credit card debt each month, but with the addition of the sinking funds, that number is now projected to drop to around $800.