Articles

Everyone who has read anything about money management has probably heard that you need to have an “emergency fund” to cover unexpected expenses. But we rarely hear about the need to plan for “expected expenses”. Everyone knows that things eventually wear out and will have to be replaced but often we fail to consider how we will pay for them when that happens. Well run businesses call this type of planning a “sinking-fund”. So if they know some piece of machinery has a 20 year life expectancy they they will set aside 1/20th of the cost every year so in year 20 they can buy a new one. You should do the same thing for certain items around your home. Here are a few things you need to create your own “sinking fund” for.