20 sinking fund categories to better control your money

20 sinking fund categories to better control your money


You set up a budget, you think you have the perfect plan, but by the end of the month, you still can’t quite make your money work for you.

If it feels like you’re constantly surprised by unexpected expenses, sinking fund categories may be helpful.

What is a sinking fund?

A sinking fund is money you set aside on a regular basis for specific things that only happen occasionally. Too often, people add to their savings without realizing what it’s for or how much is needed. As a result, it’s possible to be caught off-guard by expenses and find your budget falling short.

For instance, drivers all know that we will eventually need some kind of car repair. Yet, these expenses can sneak up on us because they don’t show up as a monthly expense in our budget. But when you set aside a regular amount – say $50 each month – you can be prepared when that repair bill does show up.

20 sinking fund categories you might consider

The trick to making sinking funds work for you is to get clear on the categories you need. Depending on your lifestyle, family size, and other factors, you want to customize your sinking funds to suit you.

For anyone who is just getting started with sinking funds or wants to make sure they aren’t missing anything, here are our top 20 sinking fund categories. 

Emergency fund

This category, more a cousin to the sinking fund, is likely the most common – and for good reason! When life throws a curveball, your emergency fund can cover that situation.

Short-term savings

Maintaining a fund for short-term savings can be helpful for future wants and needs that you haven’t specifically identified yet.


Remember those car repairs we mentioned? This sinking fund can save a lot of frustration down the road – literally. You’re likely already budgeting for monthly expenses like gas and parking passes. But if semi-annual oil changes or unexpected repairs throw a wrench into your finances, set up a sinking fund. Then, the cash is there when you need it.

Medical care

Everyone’s medical needs are different. But there’s a good chance your trips to the doctor and the drug store ebb and flow. As a result, a sinking fund to cover copays, prescriptions, and even over-the-counter medicines can be helpful.


Giving can feel difficult when you don’t set aside money for it. If you consistently save a small sum of money each month, you can suddenly become a lot more generous. This type of giving can come in the form of charitable donations, tithing to houses of worship, random acts of kindness or simply helping a friend in need.


A birthday sinking fund can catch everything from cake and confetti to gifts and games. How much money you set aside is entirely up to you. Maybe you are saving for a surprise 40th party for your spouse. Perhaps you have young children who are just entering the stage where it seems you’re attending a birthday party every weekend. No matter who you are celebrating, set something aside for it.


The cost of the holiday season can truly add up. But if you put $150 in a sinking fund each month, you can have $1,500 or more when you start your shopping for gifts.

The overall cost of celebrating during the November-December holiday season1 continues to rise so plan accordingly.

Other celebrations

Life is full of love, marriage, and baby carriages. Often, there is some sort of celebration on the horizon. Creating a general celebration sinking fund can help you juggle these costs after you RSVP.


If you have furry friends in your life, you know that the most unexpected things can and do happen. Creating a sinking funds category for your pets ensures that there’s room in your budget for everything from emergency vet visits to extra special pup-day treats.

Read more: The pros and cons of pet insurance


Yes, scoring once-in-a-lifetime concert tickets is a big deal. No, it’s not an emergency. Creating an entertainment sinking fund category will let you say yes to concerts, movies, and other forms of fun without draining your emergency fund.


If you have a smartphone, create a sinking fund for its eventual upgrade. This is true for most forms of technology. These important parts of our day-to-day lives can also be quite costly if you don’t start saving for their replacements right away.

Home repairs

Whether it’s a leaky faucet or a leaky roof or something else entirely, there’s never a dull moment as a homeowner. Set aside regular amounts of money to make these repairs something you can afford to tackle right away.

Home decor

This category catches everything from seasonal decor to bedroom updates. Whether you want to do Christmas like the Griswolds or need to buy bunk beds for your growing family, you can use this fund to cover those costs.

Home renovations

Do you have plans to add a back patio or finish your basement? Then you might consider adding a home renovations sinking fund. This category allows you to save for home projects down the road.


If you don’t have a monthly line item in your budget for clothing, consider a sinking fund. This can be helpful to save for seasonal closet changes and also cover costs of formalwear or other once-in-a-blue-moon purchases.

Beauty & grooming

Many people likely already have some kind of personal care factoring into their budget. Still, you might consider a sinking fund for occasional splurges like pedicures or massages.


Have you ever been caught off guard by a yearly subscription? Cancel the ones you don’t need and then set up a sinking fund for the rest!


There’s a good chance you’re daydreaming of packing your suitcase for a trip. Ballpark the cost, divide it by the number of months until you’re ready to hit the road, and then set aside that amount each month. Before you know it, you’ll be on vacation with all your expenses already paid!

Spending your money on experiences (like vacations) instead of material things may be a smarter financial move when it comes to your long term happiness.


If you have kids, you likely already know what it’s like to factor a monthly childcare cost into your budget. What you might forget, though, are those irregular expenses. Maybe it’s a quarterly cost of park district swim lessons or new equipment and uniforms for Little League.

And if you don’t have kids, this could easily be adopted to cover the cost of your own hobbies!

College tuition

Are you helping with tuition once a year or maybe every semester? Setting aside a small amount each month can make writing these bigger checks feel less daunting.

Last word

Sinking funds play an essential part of every budget. Think about your wants and needs, and then set up sinking fund categories to support them.


1 National Retail Federation, “NRF Says 2022 Holiday Sales Grew 5.3% to $936.3 Billion,” January 2023.


Andy Hill, AFC®


Andy Hill, AFC®, is the award-winning family finance coach behind Marriage, Kids, and Money, a platform dedicated to helping young families build wealth and happiness.

Author is not a client of Empower Advisory Group, LLC, and is compensated as a freelance writer.

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