Working My Way Towards Being a Wealthy Millennial Woman…
I’ve never spoken about this on the blog, but over two years ago, I got myself out of debt for the first time in my adult life. That moment will always stand out to me, because that day brought me freedom. Freedom from a huge weight that I had for over a decade. Freedom of choices now that I had more to pay my future self. Choices in general. There is a reason why they say money is power. Because it gives you power to be unchained.
Whilst I’ve been on a personal finance journey for a while (it was educating myself in the world of money that got me out of my debt), I would say that it has ramped up in the past few years. I’ve doved into podcasts, articles, the news. Anything and everything I can get my hands on. I love that mine and the younger generation as so much more comfortable talking about money. I love watching women talk about finances on TikTok, we’re so honest and raw about it which makes it so relatable.
All this has given me a wealth of knowledge to pull on. You cannot get me to shut up about personal finances. And whilst I can go into absolutely all areas of personal finance, today I wanna talk about sinking funds and why I feel they have been crucial to my financial success.
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What are Sinking Funds?
In the world of personal finance, sinking funds is a pool of money that is there for known emergencies. These can be any categories, but not everyone’s sinking funds will be the same as everyone else. These funds won’t hold a huge amount of money. The key is enough for anything that might come up and you have quick and easy access to.
You can put all this money together in one post if you wanted to, or you can do like me and have them in separate pots. These accounts aren’t going to have the biggest interest rates, but as I mentioned the key is that you have easy access to that money when you need it the most.
When it comes to my sinking funds, I have six accounts in total. If you follow me on TikTok, you’ll know these categories and might be following up on my monthly net worth videos. I split my accounts into two. The first is the ‘household’, which includes Dash (vet bills, etc), Car (MOT, service, insurance and any maintenance needed) and Household (broken window, washing machine, etc). The second is more light, these accounts cover holidays, celebrations and general savings. As of right now, all my household accounts are full to the brim, and we’re going to work on the other areas once we’ve gotten into the home renovations.
Financial Anxiety.
Whilst it’s nice to have funds that I can grab as and when, the one thing that I’ll always be grateful for is the security that these sinking funds have given me. It’s not full cured my financial anxiety, but it’s certainly help take the edge off. Before I have a healthy fund I would be panicking when it came to large spends, particularly with my car. My MOT, service and insurance are due within three weeks of each other. Now, it’s no problem because I have the money already saved and ready to go for 2027.
There is still a long way for me to go when it comes to my personal financial anxiety, something I might have to write about one day. But with baby steps I’m getting there, and sinking funds are certainly helping with this.
