[songbird45]

do you have separate sink funds for all the various things that could go wrong? Or do you have one sink fund, and if something goes wrong you pay out of it and then build it up again? I guess the question is, do you plan for all your disasters happening at once, or do you bet that they'll happen one at a time with time to build up funds in between? I ask because my sink fund is about $10k, and I figure if there's a major home repair (furnace or roof or whatever) or if I need a new car or something it will come out of that. But if they happen at the same time, I will be dipping into my 6 month emergency fund instead.

what do you all do?

 

[Pernillep]

I think we do a hybrid version.

I have sinking funds especially for things I know will happen. One line on the budget for each with the total going into a savings account monthly. Like DS needs a bed upgrade. We need to replace the dishwasher at some point and if we stay in this house we will need to fix the basement. All things we know will happen and that we can budget for along the way. Once we have enough to cover the cost we can either do the upgrade/repair or sit on the money until it become a absolute need to do.

For those we don't have a clue like true accidents or emergencies we would dip into the emergency funds. Like if our fairly new and in great condition car broke down or needed repair that would come out of emergency. It is not something we expect but it could happen.

I think that if there was a reason to think we would need a new car in the forseeable future I would save separately for that.

 

[CameronsMama]

We only have one account but we do plan for the possibility that several things could go wrong at once, so we keep enough in there to handle a few things at a time without draining it.

 

[annethcz]

We only have one account, it kind of covers everything. We RARELY have any sort of event that requires us to dip into the fund. We have wiggle room in the budget, and if something comes up we cashflow the expenses and send less to savings that month.

I do keep mental tabs on likely expenses and attempt to budget for them. In your example, you mentioned a major home repair (roof or furnace) and a needing a new car. I don't think any of these things is likely to be a true emergency, with the possible exception of the furnace. If you do regular maintanance on your car, you should know if it is in good running condition or if it's likely that it will need to be replaced soon. A new roof shouldn't be an emergency either- if you keep an eye on it, you'll see when it is starting to degrade and you should be able to plan accordingly. If a storm comes through and rips off the roof (a true emergency), that should be covered by homeowner's insurance. As for the furnace, a major malfunction in the middle of the winter can be problematic- it happened to us last winter. While needing to buy an entirely new furnace could be several thousand dollars, the most we've ever paid to have a furnace repaired is a couple hundred dollars.

I guess what I'm trying to say is that with most major expenses, you CAN plan ahead and budget accordingly. A $10K sink fund would be more than sufficient for US, but if you don't think it's enough for you, then add to it