How to Fund Your Best Life 💃
When you’re trying to whip up a plan for your epic Karol G dream-like vacay, a sinking fund is a top-notch choice to kickstart your vacation game. While it may have not been the hottest topic in your Latino household, it’s actually the MVP of money moves.
A sinking fund is like the superhero of finance.
It’s all about stashing cash, not under the mattress but rather in an account where over time you’ll have the funds for your next big thing, like a trip to Paris! Now, here’s the lowdown on why you should totally hop on this money train. 💸💥
1. To avoid debt: Not sure about you, but DEBT is exhausting! Fortunately, the purpose of a sinking fund is to avoid going into debt. By setting money aside in advance, you can reduce the need to borrow money or, worse, rely on credit cards to get by.
2. Discipline: It’s probably easier for your little cousin to continue biting his nails than to start saving. However, with a sinking fund, you can create good discipline. Building a sinking fund requires making regular contributions or deposits into a dedicated savings account or investment account. These contributions are made on a consistent basis, such as monthly or annually, depending on the timeline and the amount needed for future expenses.
3. To become intentional about saving: Don’t get it twisted. This isn’t one of those moments where you’re trying to translate your parent’s medical bill. Sinking funds are distinct from emergency funds. An emergency fund is designed to cover unexpected and unplanned expenses, such as medical emergencies or unexpected job loss while sinking funds are for expected future expenses that you can plan and budget for.
You bet you can stop relying on the circles you made around the block with ‘la maleta‘, the suitcase, in January because now you have a better solution to afford a dreamy vacation!
Don’t know where to start? Check out SUMAversity.
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